Bringing consumers back to crypto (Part one)
After a spectacular collapse in 2018 and several well documented cases of mismanagement and in some cases outright fraud, many people have written off the crypto sector. There are others however that are still enthusiastic about its potential to unlock innovation, massively reduce bureaucracy and democratise global wealth.
As ever in life, the reality lies somewhere in the gap between the pronouncements of the prophets of doom and the breathless exuberance of the evangelists. Finding the balance point and turning crypto and the blockchain into a credible opportunity is something that will occupy crypto and blockchain specialists for the next couple of years.
In this set of linked articles, we will discuss what the crypto and blockchain sector can do to bring itself into the mainstream.
Credibility + Opportunity + Responsibility = Mass acceptance
The first question to ask is whether crypto actually needs to bother moving back into the mainstream? Couldn’t it happily and quietly exist in a quiet niche of technology and financial markets experts without worrying about chasing the mass market?
We addressed this question in detail recently, but the short answer is that this would be a massively wasted opportunity. A market stands or falls on the amount of liquidity it attracts and the ease with which its assets, whether they are raw materials, products or services, can be traded. If the crypto sector decides to focus on being a niche, academic endeavour, it will fail to reach its potential. In turn, and many of the projects that are looking to take advantage of its unique features to attract financing, will fail to attract the traction they deserve.
Equally, from a project financing point of view, if crypto remains focused on a niche, it will fail to deliver on one of its fundamental points of difference from traditional funding methods. Projects that currently try to raise funding through the traditional financial markets have to learn to present themselves in a certain way in order to attract the support of institutional investors. But there is a risk that this homogenised process compromises the vision of a project and innovation is stifled as a result. A tokenised blockchain-based investment process would be less time consuming, simpler and potentially considerably more democratic for innovative ideas that are trying to gain support because they can approach investors directly, without having to contort themselves to get through the traditional investment process.
It could also create an environment that broadens the potential investment landscape for a wider variety of potential participants. A successful investment portfolio spreads risk across a variety of different places and crypto can deliver a new set of opportunities for investors of all sizes.
So what’s the way?
If crypto should be encouraged to look beyond its specialist technological and financial markets cul-de-sacs, the question becomes how should it go about it?
There are several factors to this, and the process is complicated by the sector’s credibility suffering what could politely be described as a bit of a knock during 2018.
In the next three articles we are going to look at the steps that crypto and blockchain advocates can work to bring consumers back to the sector.
Emirex is a Dubai based crypto exchange that has been in development for the last five years. The Emirex platform offers professional trading functionality and a suite of simplified tools so that experts and people new to the crypto sector can support an exciting range of global projects.
