In its infancy, cryptocurrency promised to be a radical alternative to conventional finance. Secure, private and subject to enviable growth and excitement, crypto became a byword for the future.
However, the real and practical limitations of cryptocurrency now overshadow these initial promises. The rapid unravelling of FTX shows that, behind the scenes, crypto isn’t as flawless as many had thought and for many who’d invested in crypto, the last few weeks have been ugly. So, was crypto all just marketing from the start, with no substance?
No matter the promises that enterprises make to investors and customers, what really matters is having a strong company underneath those promises.
The Limitations of Cryptocurrency
Though cryptocurrency first seemed to offer clear benefits through security, accessibility, and the simplicity of transactions, it’s now clear that the, just like regular currency, the value of crypto is tethered to the world rather than some limitless source of growth. Even before the collapse of FTX, cryptocurrency has been declining as a result of factors including rising interest rates, inflation and the war in Ukraine.
The general economic downturn has also caused crypto lending companies to freeze their operations, which substantially lowered the value of these online economies. Many throughout the finance sector praised cryptocurrency as the alternative to existing currencies, but it still faces the same market conditions.
Presentation vs. Reality
Much of the success that cryptocurrency enjoyed was due to strong presentation — exchanges, entrepreneurs, and even users hailed this system as the undisputed future of finance.
One of the biggest selling points of cryptocurrency was that it was decentralised, meaning these economies had no formal governance or regulations. This however led to a contradiction. The freedom promised by crypto also brought risk and, when it comes to money, most people don’t like risk. So, to reach a wider audience meant to embrace the norms of regular finance, meaning crypto is suddenly subject to the same market pressures and fluctuations as traditional currencies.
And, while one of the things that drove Bitcoins success was the limited number of Bitcoin that exists, meaning the currency could become a reserve like gold, the subsequent proliferation of other cryptos has done enough to highlight that actually, crypto is far from finite. In fact, its potentially infinite, which puts negative pressure on prices.
Balancing Marketing with Good Results
The scandals surrounding cryptocurrency show that strong marketing might be enough to generate interest in your product, and even gain many users across the globe — but it isn’t a substitute for offering a strong service and having sound underlying business. The more we learn about FTX, the more it looks like an elaborate scam.
Though there are still many users happy to continue using altcoins, despite the market’s instability, the recent news stories detailing crypto failures show that good marketing only works if it can stand up to scrutiny.
No matter your enterprise, it’s important that you never neglect the importance of good PR and marketing, as the promise of a good service could massively help to attract customers to your business. So long as your firm has more than hype and promises behind it, you could easily circumvent the problems that crypto is currently facing. By devoting equal energy and attention to both sides of your company, you can see impressive results.