A new financial system; a more democratized financial sector, even more inclusive; the future of the internet: the cryptocurrency ecosystem has been described as all of these. However, as the inherent correlation of digital assets with the Nasdaq 100 demonstrates, most people fail to conceptualize blockchain as anything more than an extension of the traditional tech economy. Although proponents of blockchain praise its virtues and potential, they have not been able to present a complete argument about blockchain to ordinary people.
Many crypto natives anticipate “decoupling,” in which digital assets become financially independent from traditional tech stocks. But without a clear roadmap on how to differentiate decentralized crypto, industry independence will not come true. As we believe in the long-term promise of blockchain technology, we need to completely rethink how we present it to society at large.
What is “decoupling”?
The Bitcoin (BTC) white paper – published 14 years ago – showed, at its core, the ambition to build a world of decentralized and permissionless payments. To date, this goal has partially advanced with developments such as the national adoption of Bitcoin in El Salvador.
However, the cryptocurrency ecosystem has not supplanted traditional finance. In fact, it has been integrated into them. On CNBC, you hear about the latest traditional institution to enter the cryptocurrency space, seeing minute-by-minute charts of cryptocurrency price developments alongside models from traditional stock markets. You probably won’t hear any blockchain commentators or industry leaders talk about improving financial transactions, eliminating third-party banking institutions, or any other defining elements of the original ethos of cryptocurrencies.
The result of this broad shift in purpose and perception is that cryptocurrencies – despite having been established to lessen reliance on traditional finance – rise and fall with the movements and behaviors of the traditional economy. Evidently, Fed meeting memos and Amazon quarterly earnings calls currently have far greater influence on the crypto ecosystem than anything laid out in Satoshi Nakamoto’s white paper.
If cryptocurrencies cannot be financially independent from the financial and technical industry they are intended to replace, what is the purpose of cryptocurrencies? Decoupling is not an industry luxury, but a necessary step for its survival.
How are cryptocurrencies decoupled?
The community at large needs to recognize two things. First, you can’t wish your way to a new financial reality; decoupling will not happen just because we want it to. Second, insanity is said to be doing the same thing over and over again expecting different results. The narratives that have brought crypto to its current status have reached the limits of their influence; continuing with the same strategy will only perpetuate stagnation.
To fully decouple, I propose three big steps:
- We in the crypto community make blockchain technology and narratives more accessible;
- We focus on use cases with tangible effects in the real world; Y
- We emphasize the clear juxtaposition between cryptocurrencies and their alternatives.
Accessible blockchain technology and narratives
Jargon is the antithesis of accessibility. The technically complex language may be a mainstay in computing circles but, for most of the population, terms like zero-knowledge proofs and layer 2 interoperability protocol might as well be Latin. Ironically, for blockchain to decouple from technology, the experience of using it has to be more Meta-like.
Say what you will about Facebook and its sister products, but you can’t deny that they have become indispensable to teenagers and addictive to grandparents: for cryptocurrencies to sustain long-term growth, they must emulate this model built around accessibility. No one associated with Facebook is forced to understand the ins and outs of its basic algorithms. They just have to type and scroll. This must be the level of intuition needed to interact with cryptocurrencies. Cryptocurrencies cannot belong exclusively to computer nerds, but have to be a case for the whole society.
Use cases with tangible effects in the real world
The cryptocurrency community must decide whether blockchain is a one-size-fits-all tool, or a master of a few. Although many present blockchain as a universal technology capable of transforming entire industries, there is little evidence that blockchain alone is the solution to all of our current problems. At least in 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 most potential are the ones at the core of Nakamoto’s white paper, the most foundational for crypto natives: a monetary system immune to government interference, a 99% accessible cross-border financial system, and a mechanism of novel property capable of giving people ownership over the financial infrastructure. The rest is noise.
Juxtaposing blockchain with its alternatives
The reason I got into the crypto space is simple: It has unmatched potential to improve specific, yet critical, aspects of our financial system. The vision laid out in Nakamoto’s white paper – forged in the midst of an unprecedented financial crisis – painted a picture of an economically empowered society. As the greed of the big banks created financial chaos, Nakamoto described a world in which people would, in effect, be his own bankers. Using the novel blockchain technology, cross-border transfers could be totally frictionless. Financial privacy could protect the savings of vulnerable people from big business and autocratic governments. The inherently limited supply of cryptocurrencies could protect them from economically corrosive inflationary policies.
These basic principles are fundamental to the origins of the blockchain and are necessary to secure its future. We are already seeing these principles in action. In El Salvador, the institutionalization of Bitcoin is allowing migrant workers to send and receive funds without onerous transfer fees. In Ukraine, we have seen humanitarian donations flow into the country via blockchain faster than official state aid. Although the history of cryptocurrencies is far from perfect, these types of use cases continually remind us how cryptocurrencies can increase the economic power of the historically disadvantaged.
Rome was not built in a day; blockchain is still a nascent industry just entering its teens. You have time to develop your potential. However, failure to effectively promote its core merits will mean continued “docking” to status quo industries. If not decoupled, the founding spirit of cryptocurrency will be drowned out by tech volatility, geopolitics, and endless lukewarm commentary from CNBC talk show hosts.
To save cryptocurrencies from this fate, we need to double down on what made them revolutionary in the first place.
This article does not contain investment advice or recommendations. Every investment and trading move involves risk, readers should do their own research when making a decision.
The views, thoughts and opinions expressed herein are solely those of the author 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 advancing economic freedom through the adoption of cryptocurrency. He brings years of experience from his previous global management positions at Apple and Rakuten, as well as blockchain startup Orb. Dennis joined Bitcoin.com in 2018 as Head of Product, and became CEO of Bitcoin.com in 2020.
Investments in crypto assets are not regulated. They may not be suitable for retail investors and the full amount invested may be lost. The services or products offered are not aimed at or accessible to investors in Spain.