Blockchain is a buzzword, everybody is talking about it and the numbers that were raised by ICOs are impressive. But what is actually behind all the hype? Looking at the decentralized Applications (dApps) that run on the Ethereum blockchain, the most used platform that is hosting smart contracts and dApps, we see a not so gloomy world.
Studying the usage of dApps
The first decentralized applications that were used by a broader audience are mostly games like CryptoKitties. CryptoKitties is a game on the Ethereum blockchain focussed on collecting, breeding and selling virtual cats. It was released in late 2017 and peaked during November and December 2017. Shortly thereafter the interest in the platform and the user numbers declined sharply. However, the popularity of the game was enough to cause congestions on the Ethereum platform.
The fact that games are dominating the adoption of a new technology can be considered as normal. Industries like gaming, pornography and gambling are in general among the first adopters of new technologies. Despite generating significant revenues these kind of industries provide only few value added to the economy.
Looking at the unique opportunity that Augur represents
Now the case of Augur could be a different one, since the platform serves a market need and a real world use case. Augur is a decentralized prediction market platform. It went live on July 10 2018 and despite minor bugs in the user interface everything worked out as planned. Besides offering betting functionality Augur serves a broader need. It allows companies and individuals to hedge against risks and for them adverse outcomes. Assume a bar in Liverpool that will lose out on a lot of revenue in the case that the local soccer team would not reach the group phase of the Champions League. The bar owner now has the possibility to secure this risk by betting against it on Augur.
A cryptocurrency trader on the other hand that depends on a BTC value of at least 50,000 USD by the end of 2020 can now bet against this and secure himself against a lower BTC price. Studying the possibilities that users have with Augur it becomes clear that this platform serves a much broader range of needs than just betting. It allows individuals and companies to hedge against risks.
Let’s take a closer look at Augur. Since Augur launched its service, payments worth 20,000 USD have already been paid out to users of the platform. The platform currently counts with pending contracts worth almost 1 million USD. According to DappRadar, a platform that measures activity on the Ethereum blockchain, Augur has currently more than 100 daily active users and accounts for more than 300 daily transactions on the Ethereum blockchain.
All this numbers seem incredibly small when we compare them with apps that run on Apple’s app store. But as more users get familiar and gain trust with the technology and the user interface further improves the usage of Augur could sharply increase. The legitimate question in this scenario of course is whether Ethereum will be ready to sustain the transactions.
What will be the impact for the ICO market
In case Augur is successful in the weeks and months to come, the impact could go far beyond the prediction market platform. It would be the first decentralized application to reach mainstream adoption. The case of Augur could serve as a proof of the viability of dApps and the ecosystem in general. It could for the first time show the real value added by decentralized Applications.
The positive impact could swap over to Ethereum itself, to many other Ethereum dApps and will eventually benefit the entire ICO market. And whenever a dApp will reach mainstream adoption we can be sure that this event will receive a broad coverage in media outlets and will create a lot of hype around blockchain technology. Augur has a historic opportunity to proof the world that decentralized applications can add value to users and enterprises.