Social Media and the Making or Breaking of Cryptocurrencies
Each age has its innovations, catalyst moments when the evolution of technology helps society take major leaps in the way culture, institutions and the way we perceive life are happening. The fastest type of growth belongs to the digital revolution we are all (still) going through as we write these lines. Today we are focusing on two interrelated areas, social media, and cryptocurrencies. The first has revolutionized communication and the second has transformed the way society thinks about money and transactions.
Traditional mass-media was always the institution that set the agenda for all the socio-economic topics, as what got written about informed public opinion, and through it the priorities we needed to pay attention to. In the digital age, this place is more and more taken by social media, communication channels that can make or break a certain topic happening at a certain time. So was the situation with the Bitcoin. Emerging right after the 2008 economic recession, the digital coin was praised as the alternative to what we knew as traditional money. A way in which we could avoid centralized financial entities like the ones that have betrayed us before. The world was curious. The world shared.
Social Media Helped Increase the Reach of Digital Currencies
In order to be able to make an impact on the financial market, a cryptocurrency needs to have a large enough user base. Having a built-in instant sharing mechanism, social media contributed extensively to the popularization of the Bitcoin in its early stages. Little by little, public opinion was forming around the new and shiny digital coin, and people were beginning to trust it. The more excited people got, the more confidence they had in using it, even for the most outlandish purchases.
“A user by the name of Laszlo posted a thread on Bitcoin Talk, offering 10,000 bitcoins in exchange for two large pizzas delivered to his home. At the time, 10,000 bitcoins were essentially worth nothing at all but today, that amount would’ve been worth £88,193,339/$106,920,000 (at the time of writing).” (source)
The mechanism is prone to do that. The moment a news-worthy topic appears, it gets written about, then propagated via social networks, increasing its reach, and thus its value. That’s how the “brand of the Bitcoin” was built. A digital coin for the digital century was all that enthusiasts and common people expected. The more people it became a topic of interest to, the more traders were investing in cryptocurrencies. Public opinion rallied around in excitement. Prices were going up, and then… And then it all changed.
“In December 2017, the cryptocurrency saw highs of around $20,000 for a single Bitcoin. Leading up to, and around the time, there had been an influx of positive news, that drew more and more people towards the currency. However, it saw a rapid and sudden slump almost as quickly as it had built up.” (source)
When the Opinion Climate Turned Negative, Bitcoin Dropped in Popularity
Human beings are very competitive and with the skyrocketing rise of the Bitcoin, then came more and more attacks from the traditional financial institutions that were feeling threatened and wanted to reestablish the status quo. With all the negative opinions being expressed in the public sphere, the positive opinion climate began to shift, and people were losing trust. As cryptocurrencies were made to look as not to be trusted, adopted mostly by shady individuals and used for purposes that were not transparent, investors were beginning to shy away from putting their money into digital coins.
The same media channels, be them traditional or digital, that praised the Bitcoin, were now beginning to spread the rumors, articles, and opinions that were now breaking-up the positive image it once had. Even today, people are not so eager to jump into topics and entities that have to deal with just the term “cryptocurrency”. Of course, there also are the experts, the individuals that have the knowledge and the facts as to be able to make informed decisions and statements about the crypto sector.
People like Andreas Antonopoulos and Vitalik Buterin (the creator of Ethereum) amongst others are leading the way into Bitcoin and open-source blockchain technology, advocating for the features, applicability, and growth both of these technologies can bring to our current society. As always, social media is there to share and distribute these positive points of view.
And as it all leads to a battle of opinions, we can’t help but wonder… is social media going to make or break the crypto area?
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