Mapping the next phase of the crypto journey
A new financial system; a more democratized, even more inclusive, financial sector; the future of the internet — the crypto ecosystem has been described as all of these things. However, as is evidenced by digital assets’ inherent correlation with the Nasdaq 100, most people fail to conceptualize blockchain as anything other than an extension of the traditional tech economy. While blockchain’s proponents laud its virtues and potential, they have been unable to make a comprehensive case for blockchain to everyday people.
Many crypto natives anticipate “the decoupling,” in which digital assets become financially independent from traditional tech equities. But without a clear plan of action for how to differentiate decentralized crypto technology, industry independence will be unrealized. Those of us who believe in the long-term promise of blockchain technology need to completely rethink how to pitch blockchain to broader society.
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What is “the decoupling”?
The Bitcoin (BTC) whitepaper — published 14 years ago — demonstrated, at its core, the ambition to build a world of permissionless, decentralized payments. To date, this goal has been partially advanced with developments like El Salvador’s national Bitcoin adoption.
However, the cryptocurrency ecosystem hasn’t supplanted traditional finance. In fact, it has ingrained itself into it. Turn on CNBC and you will hear about the latest legacy institution entering the crypto space, and you will see minute-by-minute graphs of crypto price action alongside models of traditional equity markets. You likely won’t hear any blockchain commentator or industry leader speaking about improving financial transactions, eliminating third-party banking institutions, or any other defining element of the original crypto ethos.
The result of this broad change in purpose and perception is that crypto — despite being established to lessen dependence on traditional finance — grows and declines with the movements and behaviors of the traditional economy. Evidently, the Fed’s meeting memos and Amazon’s quarterly earnings calls have, at present, a far greater sway on the crypto ecosystem than anything laid out in Satoshi Nakamoto’s whitepaper.
If cryptocurrency cannot be financially independent from the legacy financial and technical industry it seeks to replace, what is the purpose of cryptocurrency? Decoupling is not an industry luxury — it is a necessary step for the industry’s survival.
Related: The meaningful shift from Bitcoin maximalism to Bitcoin realism
How does crypto decouple?
The broader community must acknowledge two things. First, you cannot wish your way into a new financial reality; the decoupling won’t happen just because we want it to. Second, it’s said that insanity is doing the same thing over and over again while expecting different results. The narratives that have built crypto to its current status reached the limits of their influence; continued adherence to the same strategy will just perpetuate stagnation.
To fully decouple, I propose three broad steps:
We, in the crypto-community, make blockchain technology and narratives more approachable;We focus on use cases with tangible real-world effects; andWe emphasize the clear juxtaposition between crypto and its alternatives.
Approachable blockchain technology and narratives
Jargon is the antithesis of accessibility. Technically complex language may be a mainstay in computer science circles but, to the majority of the population, terms like zero-knowledge proofs, and layer 2 interoperability protocol, might as well be Latin. Ironically, for blockchain to decouple from tech, the experience of using it needs to be more like that of Meta.
Say what you will about Facebook and its sister products, but you cannot deny that they have become both indispensable to teenagers and addictive for grandparents — for crypto to sustain long-term growth, it must emulate this model built around approachability. No one interfacing with Facebook is forced to comprehend the intricacies of its base algorithms. They just type and scroll. This needs to be the level of intuition required to interact with crypto. Crypto cannot belong exclusively to computer nerds; it must make its case across society.
Related: In defense of crypto: Why digital currencies deserve a better reputation
Use cases with tangible real world effects
The crypto community needs to decide if blockchain is a jack of all trades, or a master of some. While many pitch blockchain as a universal technology capable of transforming whole industries, there has been little evidence that blockchain alone is a silver bullet for all of our modern-day woes. At least for the short term, it is better to focus on creating real-world transformational change in a few key sectors rather than pursuing a multitude of theoretical, yet unrealized, applications.
The use cases with the maximum potential are those those at the center of Nakamoto’s whitepaper — the ones most foundational to crypto natives: a money system immune from government interference, a cross-border financial system accessible to the 99%, and a novel ownership mechanism capable of giving people ownership over financial infrastructure. The rest is noise.
Juxtaposing blockchain with its alternatives
The reason I got into crypto is simple: It has unrivaled potential to improve specific, yet critical, aspects of our financial system. The vision laid out by Nakamoto’s whitepaper — forged in the midst of an unprecedented financial crisis — painted a picture of an economically empowered society. While big banks’ greed created financial chaos, Nakamoto described a world where people would, in effect, be their own bankers. Using novel blockchain technology, cross-border transfers could become fully frictionless. Financial privacy could protect vulnerable people’s savings from major corporations and autocratic governments. Crypto’s inherently limited supply could safeguard against economically corrosive inflationary policies.
These core principles are central to the origins of blockchain and are necessary to secure its future. We are already seeing these principles in action. In El Salvador, Bitcoin institutionalization is enabling migrant workers to send and receive funds without burdensome transfer fees. In Ukraine, we have seen humanitarian donations flowing into the country via blockchain faster than official state aid. While the story of crypto has been far from perfect, these types of use cases continually remind us of how crypto can augment the economic power of the historically disadvantaged.
Rome wasn’t built in a day; blockchain is still a fledgling industry barely entering its teenage years. It has time to realize its potential. However, inability to effectively promote its core merits will mean continued “coupling” to status quo industries. Without decoupling, crypto’s founding ethos will be drowned out by tech volatility, geopolitics, and endless lukewarm commentary from CNBC’s talking heads.
To save crypto from this fate, we need to double down on what made it revolutionary in the first place.
This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.
The views, thoughts and opinions expressed here are the author’s alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.
Dennis Jarvis is an accomplished executive who is passionate about building stellar teams of people and promoting economic freedom through cryptocurrency adoption. He brings years of experience from his previous global management roles at Apple and Rakuten as well as blockchain startup Orb. Dennis joined Bitcoin.com in 2018 as Chief Product Officer, and became CEO of Bitcoin.com in 2020.