Cryptocurrency is revolutionary and ambitious. It aims to be the next money.
The market-first digital asset Bitcoin was introduced more than a decade ago. There are over 2,000 cryptocurrencies in existence. But their adoption rate is still less than 1% of the global population.
As a marketer, I think cryptocurrencies need new marketing to accelerate its adoption.
Andreas Antonopoulos’ five pillars of open blockchains : (1) open (2) borderless (3) neutral (4) censorship-resistant (5) public. It is an insightful and impeccable exposition. But from the perspective of marketing, it has a problem. Laymen would hardly understand it. Its target audiences are limited to engineers and tech enthusiasts.
Marketing builds business, while technology builds products. Engineers make technical ‘features.’ Marketers re-define their values focusing on user ‘benefits.’
Creating value propositions of cryptocurrency to persuade general users is not easy. Cryptocurrency is a radically new concept. Understanding it requires prior knowledge about the history of money and the Internet. Moreover, Andreas asserts money is communication and is part of human rights. As governments eventually agreed with the idea of separating church and state, people will understand why we should separate money and state in thirty to fifty years. But, marketing is for now. It should drive the adoption by today’s users.
In ‘The Ascent of Money,’ Niall Ferguson cites the creation of credit by banks, the birth of the bond, the birth of the company and stock market, and John Law’s fiat money as great revolutions in the evolution of money. What motivated users to adopt these new innovations?
In my opinion, each satisfied humans’ ambition to be richer than now. Much much richer. Users could find the potential for ‘explosive’ growth of their economy and personal wealth.
How about cryptocurrency? Does it also provide a new opportunity to take us to the next level of wealth scale?
At first glance, cryptocurrency seems to try to shrink the size of our economy, taking down the scale of transactions to peer-to-peer. It looks more interested in ownership than making money. Simply put, ideological rather than practical.
Furthermore, its praise for the removal of intermediaries is a tall barrier for mass adoption. Does the cryptocurrency have any features to motivate users to adopt it as the next money?
Decentralization does not equal to the removal of intermediaries
In ‘Digital Gold’ written by Nathaniel Popper, you can find a narrative about Bitcoin’s first positioning message. It was when Satoshi was preparing to release Bitcoin version 0.3 on Slashdot.
A small crew went back and forth about the right language to submit to the Slashdot editors. Satoshi got his hackles up when someone suggested Bitcoin be sold as “outside the reach of any government.”
“I am definitely not making any such taunt or assertion,” Satoshi wrote.
This lets us take a new look at cryptocurrency. Bitcoin was not born to alternate the current money nor to remove the governments in the financial system.
What its whitepaper suggested was an electronic transactions system ‘without relying on financial institutions’ serving as trusted third parties. What it pointed out as the current system’s inherent weakness was the reversibility of transactions. Satoshi did not say that intermediaries should be removed.
Translating the feature differently to be suited for today’s needs
We don’t necessarily have to translate ‘without relying on financial institutions’ into their removal. Instead, we can say we will ‘add’ a new transaction system without relying on financial institutions. And it will lead us in a different direction to perceive and utilize cryptocurrencies.
Niall Ferguson said he has got the following insight from the history of money:
“Poverty is not the result of rapacious financiers exploiting the poor. It has much more to do with the lack of financial institutions, with the absence of banks, not their presence.”
Indeed, the subprime mortgage crisis happened because people who had low credit scores and ridden with debt could not access the money. In the evolution of money, what we need today is to add more efficient credit networks, rather than removing the established ones.
Our age reflected in the Occupy Wall Street and Parasite
The Occupy Wall Street movement started in 2011 with the slogan of “The 99% will not be silent,” referring to the wealth distribution in the US between the wealthiest 1 percent and the rest of the 99 percent. This theme still seems resonates with many people all over the world, considering a Korean movie’s popularity.
Parasite was the most talked-about film globally last year and became the first foreign-language film to win the Academy Award for Best Film this year. Director Bong Joon-ho said, “We all live in the same country now: that of capitalism. Where ‘economic immobility’ has become the new normal.”
In the movie, Ki-woo has talents and capabilities to be successful. But he was not born into a rich family. It is heartbreakingly certain that he would not afford the house his father is trapped in. Mr. Kim failed in his own Taiwanese cake shop business. Geun-sae took some bad loans and was forced to hide from loan sharks. They are immobile, stuck in their current status.
Money to break barriers to financial inclusion
Parasite satires the myth of meritocracy. For example, Ki-jeong secured her tutoring position by forging the connection with the rich family’s trusted source. Her graphic design capabilities and even her fake documents were ignored during the hiring process.
When the term ‘meritocracy’ was introduced in the 1950s, ‘merit’ was defined as ‘I.Q. plus effort.’ It has been often criticized for its elitism. But today’s merit does not have to be treated that way. Because we are living in the age of the Internet.
All the world’s information and knowledge are at everyone’s fingertips on the Internet. And Web 2.0 (Social Web) empowered humans to be connected with anyone globally, to be able to broadcast our voices all over the world and to build our personal brand.
And now, Web 3.0 (Blockchain) comes in. Andreas acclaims that for the first time in history, money has become information. You can build and expand on it, creating applications that allow smart contracts, security token offerings, and even your cryptocurrency. You can make your own market, which does not have to have many users. If you have got at least one user, you have created a market.
Established financial institutions are trusted because they keep a tall barrier to entry and to access. They demand financial credentials to be financed. In Parasite, Mr. Kim could not get bank money. But he is accessible to cryptocurrency.
He can open his market for funding on Web 3.0 with the smart contract made of his own rules, targeting peers worldwide who have their own various kinds of criteria in investing.
If he made an effort to build a strong brand of his first shop with trustable stories and content online, he would have higher chances to achieve his goal. More importantly, the financial market on web 3.0 is not the bloodless cold-hearted money-making zero-sum game. Instead, it will be a life-enriching network. Peer-to-peer transactions sound small. But if it ‘opens’ borderless & neutral & censorship-free & public opportunities to 100% of humans on the earth, it is huge.
Bong Joon-ho mentioned, “once Americans overcome the one-inch-tall barrier of subtitles, they will be introduced to so many more amazing films.”
I think once blockchain people, both developers and users, overcome the one-inch-tall barrier of the current positioning and think outside the box to utilize the tech, cryptocurrency may be able to be adopted as a new amazing money in our age.
Cryptocurrency needs a new positioning to become the next money was originally published in Data Driven Investor on Medium, where people are continuing the conversation by highlighting and responding to this story.