Cryptocurrency’s Marketing Problem
For the last six months, I’ve been on the craziest learning curve in history. Back in May, I picked up a client who needed copy for a new website to promote functional programming services to non-technical customers. I had never heard of functional programming before, nor understood what it was used for. Before I knew it, I was learning about “scalability” and “reproducible builds” and “universal quantification” and translating these concepts into language that average people could grasp.
Since then, I’ve learned that functional programming is used, among other things, in the development of blockchain technology and cryptocurrency. As I’m now editing technical papers for my client, I’m learning all about decentralized finance (DeFi).
Well…at least I’m trying to. I follow several blockchain accounts on LinkedIn and Twitter. I read interesting articles and watch various discussion videos as they come up in my feeds. I visit websites like Coinbase to catch up on the latest news. And even after weeks of doing this, I still don’t have a clear idea of how cryptocurrency actually works.
That’s because, I’ve discovered, the industry has a serious marketing problem.
The Knowns
Here’s what I’ve been able to piece together so far. Cryptocurrency was created as a decentralized asset that people could buy and exchange on a blockchain. “Decentralized” means it’s not controlled by any central government or institution, such as a bank. The purported benefit is that anyone with cash on hand can buy in. With cryptocurrency, there’s no credit check or minimum deposit or any of those other regulations that prevent disadvantaged people from participating in traditional banking systems. In theory, this makes cryptocurrency more accessible and democratic. On some DeFi exchanges, prices are set by supply and demand based on trading volume. Currency holders can earn returns on their crypto by staking it in an asset pool, minting it, or collecting fees in exchange for providing liquidity for trades.
The Unknowns
Apart from this knowledge, it’s nearly impossible to evaluate the risks involved with cryptocurrency trading. For starters, nearly everyone working in the blockchain industry speaks like either a Ph.D.-level financier or an MIT-level programmer. You need a dictionary to even begin to understand what they’re saying. My biggest pet peeve is when they talk about working to reduce “slippage.” Not one article I’ve read yet has explained what slippage is or to what degree it’s happening during cryptocurrency transactions. It sounds like losing money to me. And I do not like losing money.
Other unknowns:
- If I stake money in an asset pool on a bet that a particular block will be added to the blockchain and it’s not added, do I get my asset back? Or is that a loss, too?
- What prevents bad actors from infiltrating the blockchain? Is there some kind of system to ensure good behavior?
- Do forks in the blockchain affect cryptocurrency values in any way? If so, how?
- If cryptocurrency is purely digital and requires massive amounts of energy to exist, what happens when there’s a power outage (which is increasingly likely given climate change and the state of our infrastructure)?
The known risks are just as terrifying. Because this is decentralized finance, there are no regulatory bodies to rate one blockchain or cryptocurrency as more secure or stable than another. Buyers have to evaluate that for themselves. Lose the password to your crypto account? Get scammed through a poorly written smart contract? There’s no one you can call for help. You’re simply locked out and in the hole.
Yet these concerns appear to go unaddressed whenever blockchain developers jump in front of a camera. Instead, they talk in obscure terms about “latency” and “protocols” and “tokens” and “DAOs,” and then wonder why the industry is struggling to obtain buy-in from average people.
Insiders Talking to Insiders
People who work in highly complex industries fall prey to a common foible: they talk in jargon. That’s largely what keeps me in business as a copywriter. I take jargon-filled statements and turn them into sentences almost anyone can understand.
Whenever I hear blockchain developers giving a talk on camera or read one of their social media posts, that’s what I encounter: jargon. Insiders talking to insiders. No matter what context they are speaking in or who their audience is, blockchain developers seem to assume that everyone within earshot shares their same base of knowledge.
Perhaps that was true back when blockchain technology was just the same 10 guys collaborating on GitHub. But as the industry has expanded into 41 blockchain companies and over 70 million cryptocurrency holders, that is no longer the case. There are now people attending blockchain conferences and cryptocurrency gatherings who know precisely zilch about the technology. If developers want to turn these people into buyers, they’re going to have to take on an outsider’s perspective and be fully transparent about the trading process and the risks involved.
The Language Barrier
I remain equally amused and disturbed that an industry that bills itself as accessible, transparent and democratic is anything but when it comes to addressing the risks of cryptocurrency trading. Make no mistake, language is the problem here. Complex language creates barriers to understanding. History is riddled with examples of how powerful people and institutions use complex language to deprive uneducated people of their wealth and rights. It’s why the Roman Catholic Church didn’t want the Bible printed in any language other than Latin, why American slaveholders outlawed teaching slaves to read, and why the subprime mortgage industry targeted mentally disabled people for risky loans. Understanding eliminates exploitation and produces equality.
Given the sophistication of modern scams, people are right to be wary of any product or message that sounds vague, obscure or overly complicated. And anyone yelling, “Just have some faith, you moron!” — as some cryptocurrency fanatics have been known to do — is sure to get me running full-speed in the opposite direction. This is finance, not the 700 Club. If you can’t tell me how much of my money will be at risk in your venture, then I’m not risking any.
Doing otherwise would make me a moron. As I’ve said before, as a woman, I don’t have money to blow on expensive life lessons.
Democratic for Who?
Don’t get me wrong. Blockchain technology and cryptocurrency offer some intriguing possibilities for the future. With the right governance structure, perhaps blockchains could help traditionally disadvantaged people find pathways to equity. With the right asset pegging, perhaps cryptocurrency could avoid market volatility.
However, if the cryptocurrency industry truly cares about being democratic, then it needs to start fostering understanding for buyers through simple, plain-language marketing. Without this plain-language understanding, the industry will remain accessible to only a few. These few individuals, likely to be the top cryptocurrency holders and governors of the blockchain, will know the risks of the system and be able to navigate them in ways that average users won’t. These individuals, through governance and influence, will be able to shape the blockchain to their advantage. And that advantage will not be constrained by any international border or subject to any regulatory body.
And right now, a full release of blockchain technology is being planned for Africa, among some of the world’s poorest and historically colonized populations. Suffice to say, I feel a bit concerned.
Only time will tell whether the blockchain industry intends to fix its marketing/transparency/democracy problem. I hope it will.
