COVID was exactly what crypto needed

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After we shut down my crypto company at the end of last year, I knew it was time for me to take a break from crypto. At the time, crypto was moving slower than anyone had imagined it would. I had spent 5 years fully immersed in the crypto world and I needed some space to breathe.

I had so many questions. Would crypto ever be as big as we thought it could be? Would it forever remain a niche? Would nerds and anarchists be the only people to ever care for crypto? I had no answers to these questions and truth be told, I had been a crypto insider for so long that I could no longer view it with an objective lens.

So… I stepped away. I didn’t touch or think about crypto for over 6 months.

Then out of the blue...

A few weeks ago, a close friend contacted me to ask a bunch of questions about Bitcoin and other cryptocurrencies. Honestly, this is someone who I never would have expected to care about crypto. The last time we had talked about cryptocurrency, he thought it was complete nonsense that only nerds cared about. He believed crypto would never work in the “real” world with “real” people who had “real” problems. Yet here he was, ready to go all in.

This is when I knew that I had to check back in on the crypto world. I started reading through a 6-month backlog of news and talking to old friends in crypto. The more I learned, the more I wanted to know.

Perhaps the most exciting aspect of returning to crypto was the fresh wave of energy I felt in the space. People who had previously been outright skeptical or on the fence were now starting to come around and give crypto a chance.

Why now?

Anyone who is an avid crypto fanatic knows very well that governments and institutions have long been falling apart and failing us, badly. If it were not for COVID-19, this reality probably would not have been so obvious for another decade or so. COVID-19 accelerated that time frame and exposed an ugly truth to many folks. People all across the world are now beginning to recognize the flaws in the current systems. After what happened in the last 6 months, many are losing trust all together.

Naturally, as people start to lose trust in their government, public institutions, and leaders, they look for new figures and systems to trust. Suddenly, the idea of a system where trust is distributed instead of centralized makes a lot more sense. It’s easy to see why people who were previously skeptics or had no need for crypto are starting to see its value. Although they may not be fully on board, they are now more open to considering its viability.

COVID-19, for better or worse, is the perfect catalyst to accelerate crypto adoption.

The crypto adoption curve and where we stand today

When it comes to technology, there is a well known phenomenon called the “technology adoption lifecycle” which states the adoption of any new technology follows a typical bell curve.

image
Source: Wikipedia

The first group of people to use a new product are called "innovators", followed by "early adopters". Next come the "early majority" and "late majority". The last group to eventually adopt a product are called "laggards". 

Moreover, theorist Geoffrey Moore proposed a slight variation of this original lifecycle where there is a gap (or “chasm” between the first two adopter groups). 

image.png
Source: Wikipedia

He argues that the most difficult step in the adoption of any technology is “cross the chasm”–making the transition between visionaries (early adopters) and pragmatists (early majority).

Since crypto is partially a technology, we can use this technology adoption lifecycle to analyze the timeline of crypto adoption. There is, however, one big difference: crypto is unlike any other technology we’ve seen before, because crypto is so much more than a technology. It is also a social phenomenon that can only exist if people collectively believe in it.

This collective belief in crypto is just as important, if not more important, than the adoption. Without a shared cultural belief, the underlying technology is useless. Adoption cannot happen until there is widespread belief. 

Therefore, when we consider crypto adoption, it’s not enough to merely look at how many people have adopted the technology: we also have to take into account how many people actively believe and accept crypto. Acceptance serves as both the leading indicator and precursor for adoption. This means before we have adoption, we have to have acceptance.

Measuring the true adoption of cryptocurrency is nearly impossible today, due in part to how hard it is to actually define adoption. If a person owns $0.01 of Bitcoin, does that count as him adopting cryptocurrency? What if a person works for a crypto company but doesn’t own any crypto himself‒is he adopting it?

I don’t think any of us know yet what true adoption looks like. So, for the time being, it is better to think of cryptocurrency’s acceptance. We have to look at how many people have begun accepting crypto as a better way to do banking, lending, capital raising, and building social economics. Once we have a large enough group accepting the idea, building the underlying technology is only a matter of time.

Where we stand on crypto’s acceptance curve

When Bitcoin was first launched in 2009, there were only a handful of innovators who knew, understood, and believed in it. Ever since then, there have been a few major waves of acceptance, all of which correlated with rising crypto prices. The interesting thing about these price spikes is that they tend to bring in more people. Some of them come for quick money and then leave, but many end up believing in crypto and staying (or I guess HODLing?!).

In 2013, for example, we saw a rise in prices that brought in a new wave of people.

Source: bitcoincharts.com

Even with an influx of new people, though, crypto was still very niche. Many of us who were in the space back then were raving about “this new crypto thing” while everyone else looked at us like we had grown a second head and two new arms. We hadn’t yet entered the “early adopters” phase.

Then the 2017 hype cycle happened...

This hype cycle brought crypto interest to a whole new level. It was probably the wildest experience of my entire life and those who experienced it know exactly what I’m talking about. During this period, we saw a LOT of charlatans enter the space. This led to overhype, hysteria, and scams, but we also saw a wave of fresh energy.

It was during this time it felt like we had finally crossed the “innovators” phase and were entering the “early adopters” phase. We saw smart people come into the space and start putting their brain power to work. Since then, unfortunately, crypto has been somewhat sleepy. We haven’t seen any huge waves of acceptance happen ever since‒and for good reason.

For starters, there’s so much foundational technology that still needs to be built. We still need to lay the necessary groundwork to support the visionary ideas that crypto can bring to life. Innovators within the crypto space have been busy creating these building blocks, but it takes time. And like so many things, it’s taking longer than we previously expected.

Even though there’s been a lot of underground innovation, there hasn’t been much for outsiders to see or use. What they’ve been able to get their hands on has been slow, expensive, and difficult to navigate. How can the average person be expected to place their belief in a concept that seems inferior to what they were already comfortable believing in?

Not only that, but the public need to care about crypto hasn’t been there yet. The status quo has been good enough for most. Crypto only made sense to the skeptics, futurists or gamblers, but everyone else had no real need for it.

Until now.

In this next decade, I foresee that we will finally cross “the chasm”, thanks in part to COVID. And hence, why we are seeing some early signs of the onset of the next hype cycle.

Source: Coindesk
Source: Coindesk

Crypto is not so sleepy anymore

What’s interesting about this hype is that unlike past hype cycles where there was a flood of outsiders rushing in without much development happening from the inside (i.e. it was mostly sentiment driven rather than progress driven), this hype cycle seems to be somewhat more progress driven. Perhaps COVID has left a lot of crypto people locked in homes with nothing to do but build? Whatever the reason, there is definitely an increased sense of energy and productivity, one that we badly needed after a very slow 2018 and 2019. 

Of course, it goes without saying the hype won’t last forever. Just like every new hype cycle, there will be blood on the streets whenever all the madness ends and that’s okay. Waiting for the general public to accept crypto likely means endless cycles of price speculation, fresh energy, regulatory slaps on the wrist, and so on. But when each of these cycles end, crypto will have more widespread acceptance and an influx of new talent, which in turn helps create progress. This cycling may be tedious, but it’s necessary for cryptocurrencies long term growth, development, and eventual adoption.

Conclusion

I believe COVID-19 is going to catapult crypto into its next acceptance cycle. We are living through a time where people are desperately seeking hope. While crypto won’t be the solution to all of our problems, it could be the thing that gives a lot of people hope for a brighter future.

When you’re involved with something every day, it can be hard to tell when you make any real progress. Now that I have taken a step back from crypto and re-evaluated, it is clear to me: the crypto world is indeed growing and moving forward. When I see how many new people are learning about and accepting crypto thanks to the COVID scare, I get excited for crypto’s future all over again. All it takes is a few more light bulbs going off. With each new light, the shine grows brighter for others.

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Why am I sharing my travel stories?

Founder & CEO of TruStory. I have a passion for understanding things at a fundamental level and sharing it as clearly as possible.

Preethi Kasireddy
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