From Elon Musk’s cryptocurrency-focused skit on Saturday Night Live’s “Weekend Update,” last November’s rebrand of L.A.’s Staples Center to the Crypto.com Arena to the rise of meme coins, 2021 was the year crypto captured the cultural zeitgeist.
But is the general public any more empowered for it?
Despite the mainstream attention that digital assets have begun garnering, the general public still has a minimal collective understanding of how cryptocurrencies actually work. And it is easy to dismiss what you do not understand. So the understanding, the willingness and the ability to appreciate the mechanics and incentives of digital assets are crucial components for cryptocurrency adoption.
As some market observers anticipate DeFi Summer 2.0 to be around the corner, it’s imperative to reframe how we welcome newcomers into the industry. How do we make sure that the efforts by businesses to make DeFi more accessible benefit a broader group of people than the first time around?
When it comes to teaching crypto to a 2022 consumer, there are two things worth keeping in mind:
- Our lives are more than ever filled with noise: We are bombarded with messages, emails, DMs, news, tweets and feeds. In this data-intense environment, we became accustomed to scanning the information instead of reading. So the challenge becomes: How do you accurately fit the complex concepts in a bite-sized, scannable format?
- The second challenge is overcoming a perception that the future of finance is a zero-sum game. This air of hostility between traditional finance and decentralized finance has its roots in the early days of the industry. The two can absolutely complement one another. And the sooner this realization comes to both camps, as well as to policymakers and agencies, the faster markets will benefit from it.
Tips for connecting with the modern-day crypto-curious
The digital asset space has acquired a reputation for being overly complicated, and it doesn’t have to be that way.
Here are three strategies that I have used to help make crypto make for others.
The cryptocurrency industry has adopted its own lingo. On the one hand, some of it is a conversational street talk, like “getting rekt.” On the other hand, some of it is deeply technical, like elliptic curves. None of it benefits those who are just getting into cryptocurrencies.
Avoiding jargon is different from getting your basic terminology right. You probably cannot explain major concepts in digital assets without the terms like wallet, address, keys, blockchain, ledger, tokens and coins.
The use of analogies to teach new topics is popular among educators because it connects a new concept with familiar information.
The concept of Bitcoin is often explained by an analogy with a ledger. So what would be those go-to analogies for liquidity mining, yield farming or staking? And while the comparison is a good exercise for logic and imagination, it needs to preserve accuracy. Oftentimes, people think that owning digital assets is like owning equities. But it is just not so.
That takes me to the next point — where you send people to get more information.
Lean on good resources
The cryptocurrency industry has existed for over a decade now and accumulated a decent resource library in a variety of formats. From long articles to white papers to infographics to TikToks, you’re bound to find some educational material. Given how immersed we are in our phones, the majority of attention for crypto information is probably directed toward on-the-go formats. These are podcasts or videos.
Businesses, like ourselves, who work to simplify access to cryptocurrency have an educational role to fulfill. While it’s important to have the best resources at your fingertips, nothing beats practice through actual interaction with digital assets.
The crypto ecosystem: anarchic or civilizing?
DeFi is a new internet-based ecosystem that is programmed to be impartial in a way that hedge funds, banks and Wall Street cannot be. Traditional financial institutions are concerned about the threat of DeFi to their interests. After all, so much value has been created in the last decade without these institutions’ participation. How do they reinvent themselves in the next stage of financial evolution?
On the other hand, in all of the excitement surrounding the advancement of blockchain technology and DeFi, the role of centralized finance is commonly presented as diminishing. Make no mistake, we will need centralized institutions for many years to come. For as long as we are using fiat in our everyday lives, intermediaries, like traditional banking services, are exceptionally convenient and necessary.
Rather than calling for the end of traditional finance, crypto advocates can work on changing the sentiment that decentralized finance and traditional finance are antagonists. Just the opposite, traditional finance can benefit from the additional yield opportunities in DeFi. DeFi can benefit from the liquidity and on-ramps of traditional finance.
Anyone who is in the digital asset industry for reasons beyond a quick gain from volatility probably has experienced a desire to educate others about the fundamentals of blockchain technology. A deeper understanding of the concepts will reveal that the rise of DeFi will not replace centralized financial institutions, but complement them.
This is an attitude that leaders in the crypto space need to promote when educating people about cryptocurrencies.
Oleksandr Lutskevych founded CEX.IO in 2013 with the mission of making cryptocurrency accessible to traders and investors around the globe.
This article was published through Cointelegraph Innovation Circle, a vetted organization of senior executives and experts in the blockchain technology industry who are building the future through the power of connections, collaboration and thought leadership. Opinions expressed do not necessarily reflect those of Cointelegraph.