Revisiting Delta 4 framework: Why India Can never adopt public blockchains

The year was 2021 (Wait, we’re in 2024 already?).

While the world was grappling with the biggest pandemic to have hit our planet ever, money printer going brrr.. was a constant. For non-crypto natives, this is quantitative easing by central banks to jumpstart the economy.

Euphoria pro max for real.

Three years later, I am dying to ask a couple of questions.

After actively working on a few of these use cases for bread and butter, here’s a detailed perspective of what went wrong and the way forward.

Read on!

Is it too early?

Short answer? I do not know. Nobody knows.

Long answer? Let us put some rationale behind it.

On one side, Bitcoin is over a decade old now. Given the stimulation hungry world we live in, it looks like a lot.

On the other hand, we were also most likely to start travelling by flying cars, by now.

The interest in the space is directly correlated to the prices.

What is Delta 4?

Simply put, Delta 4 framework defines the stickiness of a product. This can be characterized by three key behaviours as follows:

1. Irreversibility

Once a user starts using the product for doing something, it is impossible that he or she goes back to old method.

2. The willingness to keep using the new product is very high.

If your product or service is unavailable, the user waits rather than resorting back to the old method.

3. UBP: Unique Brag-worthy Proposition

Humans love to brag about a new exciting product that they are using, to other humans who have not discovered it yet. This phenomenon becomes so prominent that it ends up being more important than the product’s own USP.

Examples?

Let us try to apply this framework to Uber.

Imagine there is no Uber or Ola.

You would conventionally call up a local cabbie, haggle for prices and ultimately wait while being unsure if they actually shows up!

Now with Uber in place, you are likely to go back to the old method of booking a cab.

Similarly, if Uber is down (assuming there’s no competition) you won’t just call up the local cabbie again for the sake of it. You are likely to wait.

And of course when it was new, Uber felt like magic. You press some buttons and a cab showed up at your doorstep. You wanted to talk about it with your friends.

With that information, how much would you rate the ‘old method’ vs ‘Uber’ out of 10? Say 3-4 and 7-8 respectively?

The Delta 4 is exactly that. If there is a difference of 4 or more in the two scenarios, you have a winning product.

Let us now apply Delta 4 to Blockchains.

Delta 4 of Blockchains:

For this, I would try to emphasize on the core problem Blockchains try to solve and establish if they are a delta 4 over status quo.

Now if you ask a fanboy, they’ll probably put Blockchains in every sector they know of. Why? Because it is easy to ideate but really hard to execute.

So I am not going into all those use cases around Blockchain in healthcare, manufacturing, loyalty, social media for now!

Let us stick to two use cases that are nearest to PMF. The current bull run will be led by these narratives in my opinion.

Financial Transactions and Tokenization.

Still with me? Great. Let us apply delta 4 to the above.

1. Financial Transactions:

Of course Blockchains are a significant upgrade to conventional financial management systems. However, if you are living in India, you are most likely to rate the existing transaction modes as a solid 7-8.

UPI has been phenomenal driver of inclusivity and growth.

Moreover, although the technology is different, the ethos of UPI is very similar to Blockchains.

It is a base layer where anyone can build a frontend. (Layer Zero much?)

They can then use the data of their acquired customers for targeted loans. (Talk about data democratization)

Although the tango of payments involve multiple parties and the reconciliation happens once a day only, from a user’s perspective, it just does NOT matter.

I can send and receive money in under 5 seconds to a stranger. Everything else is not my business.

Yes. Blockchains can enable this infrastructure without an intermediary. But is that what people really care about? Not the conformists for sure.

Turns out that CBDCs have the highest probability of finding the PMF in this mix. But, governments would like to control it themselves.

So public blockchains are out again!

“But sire, what about the global payments?”

Well, I think we are fighting an ideological battle with technology. If the entire world wanted to streamline cross-border payments, they would have. Current technology is completely capable of doing it.

Once again, Blockchains make it easier, faster. But intent? That still needs some deeper level of collaboration.

2. Tokenization:

And then there was RWAs or Real World Assets. The holy grail of Blockchain use cases.

Honestly, I am a big fan. I believe you can add as much complexity as you may like, but at a fundamental level, Blockchains are the best tool for tokenizing everything.

Powered by operator-free atomic swaps, Blockchains can easily help you create a secondary market for anything and everything. These markets do not need regulations as the technology inherently prevents cheating.

I mean you need not be a techie to love what Blockchains can do in that space.

But here’s the twist.

The initial use cases of tokenization try to breakthrough heavily regulated space.

Real estate. An industry built around black money. You are trying to bring an antidote to corruption on the wrong table.

Now land records on Blockchain is being piloted in nooks of the country (source) but again, you cannot expect a true democratization of the same.

Governments will use Blockchains to establish provenance of a piece of a land but probably never enable speculation on it through secondary markets.

And yes, you guessed it right. They will keep the entire control to themselves. Sorry Vitalik/Anatoly!

Commodities? Well, there are markets run by FMC already. As a user, why would you take a bet on unregulated, dubious entity when government is allowing you to do it legally. No delta 4?

For the assets which are not listed on the commodity markets (liquor, wine, watches etc.), are the markets large enough to sustain the exchanges powering it?

And you always have a risk of getting into legal battles the moment you become bigger. (Case in point: Gambling industry)

Finally:

Do not take me wrong. I am all up for innovation and a firm believer of web3 realm.

But as it turns out, crypto folks are trying to force fit Blockchains everywhere. And wherever it could really fit, Government of India is already there.

Unfortunately, this very habit of thinking Blockchain as a solution looking for problems is preventing us to focus on what really matters.

But what is that? You tell me!