As more people get drawn into the profit potential of crypto, skeptics increasingly point out to the fraud and failure happening in the space. The various hacks, ransomware attempts on the Colonial Pipeline, and the high-profile failures of Terra/Luna, Three Arrows Capital, Celsius and most of all FTX/Alameda have done nothing to improve crypto’s tarnished image.
It doesn’t help that powerful opponents and influential voices consistently denounce crypto. The mainstream media sometimes piles up on it too. Count the number of times the words “crypto” and “scam” have been put together in an article. You’ll find a lot.
US Senator Elizabeth Warren says she will form an “anti-crypto” army as part of her campaign. Fear, Uncertainty and Doubt (FUD) spread through the news and opinions continue to spew out nonstop.
What people need to realize is that the technology of blockchain, and the shenanigans that some people pull, are two totally different things. Perhaps the way to make that happen is for the crypto sector to seriously consider rebranding itself.
Crypto is just really a means to pay network node validators so that the blockchain runs smoothly. It is the payment for their investments in the servers, the networks, the Internet connectivity, the operation and maintenance, the power bill and their time ensuring that the blockchain runs smoothly. For the person/s using the blockchain, the redundant transaction ledgers duplicated in many places ensure that the transaction is recorded properly and cannot be denied.
If you’ve ever contested a restaurant bill, and a few of your friends came to your rescue, then that’s an example of keeping track of a redundant set of transaction ledgers for you. For that service, the user pays a transaction fee that goes to the validators. That transaction fee and the payment to the validators are the cryptocurrencies.
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Now as with many new technologies, there will always be con men, etc. If you give someone your money because they tell you they will put it in crypto, and your money disappears, your money did not disappear because of crypto. Your money disappeared because you gave it to a con man. If your wallet is hacked, and your funds get stolen, perhaps the crypto security needs to be upgraded, but it is still a human-induced theft for which the perpetrator has to be caught and prosecuted.
The problem is that most people don’t make these distinctions. But perhaps it is also not their fault. For so long the crypto sector has operated like the Wild West, precisely shunning regulation because many of its adherents hate the traditional finance sector. Plus a lot of its adherents insist on using pseudonyms and avatars and talk in crypto jargon with terms like WAGMI, HODL, rug pull, diamond hands and others that make this industry look strange to outsiders.
Perhaps now is the time for the crypto industry to realize that not everything in the traditional finance world is bad. Some minimal oversight that prevents the crooks from taking over the space protects everyone, not just the customer users, but also the crypto industry players themselves.
Likewise, the traditional finance sector should realize the advantages of not having transaction ledgers isolated in each bank’s database, which requires external banks to send transaction updates indirectly using correspondent banks via the SWIFT messaging system. The current bank messaging systems like Automated Clearing House (ACH) for checks, and SWIFT, have been around for decades and are not capable of lightning speed adjustments and fund transfers that Gen Z and Gen Alpha are used to.
The way an industry looks often evolves as it matures. As crypto matures, and if it is truly serious about attracting the rest of the global population to support it, it needs to rebrand itself. It’s no longer a rebellious teenager and needs to grow up and take its rightful place as a respected asset class that everyone anywhere can enjoy.
Zain Jaffer is the CEO of Zain Ventures focused on investments in Web3 and real estate.
This article was published through Cryptox 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 Cryptox.
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