It was easy spreading crypto awareness during the bull market as millions flocked to the market in the hopes of earning incredible gains. Today, the hype around cryptocurrencies has cooled. Social media influencers have abandoned crypto to promote newer technologies, namely artificial intelligence (AI). Thousands have left the crypto market after suffering irrecoverable losses.
On a positive note, believers have remained faithful and continue to embrace cryptocurrencies after understanding the principles of decentralization and its potential to revolutionize finance for the better.
It goes to show that the crypto sector will gain wider adoption if more people get the chance to learn and understand cryptocurrencies at a deeper level. Not only will greater crypto awareness empower individuals to make informed decisions on cryptocurrencies, but it will also open up new possibilities for them.
In this article, we discuss the importance of crypto education initiatives and how they can bridge the knowledge gap for newcomers to the space.
Crypto Education and Awareness: Knowlege is Power
One of the biggest hurdles for mainstream crypto adoption is user experience.
It is impossible to own, trade, and use cryptocurrencies in a decentralized manner without a non-custodial crypto wallet. However, using crypto wallets can become overwhelming for a newcomer. From securing your 12-word secret wallet recovery phrase to learning about private keys to selecting a blockchain network to operate on, many may think that decentralized finance (DeFi) is not worth the hassle.
Crypto education and awareness can help newcomers with the onboarding process. Video tutorials and blog posts demonstrating how to set up a wallet and explaining the importance of securing recovery phrases and private keys will help newcomers. It’s vital that these guides are quick, easy, and entertaining if possible. Attention is a hot commodity today, and it is sometimes difficult to hold on to.
Setting up a crypto wallet is critical for the user to discover the full potential of cryptocurrencies.
Not Your Keys, Not Your Crypto
Cryptocurrencies got a bad name in 2022 as thousands of crypto investors lost their money after several centralized crypto exchanges and lenders went bankrupt. The list is long: FTX, BlockFi, Voyager, Celsius, Genesis Global Capital, and more. Customers with crypto holdings in these companies are still fighting to retrieve their tokens.
What many people do not understand is that cryptocurrencies like bitcoin (BTC) and ether (ETH) are the antithesis of centralized finance. Cryptocurrencies are supposed to be self-custodial.
The collapse of centralized crypto players was a difficult pill to swallow. Although, it did instill the principle of “not your keys, not your crypto” in the market.
With better crypto education and awareness, new users can practice self-custodianship right from the start of their crypto journey. The use of non-custodial wallets will not only make users responsible for their cryptos but will also introduce them to basic crypto fundamentals such as gas fees.
Greater awareness and education about the possibilities of cryptocurrencies and public blockchains opens up the world of decentralized finance for users.
If you only stick to trading coins on centralized exchanges (CEX) like Binance or Gemini, you will never experience the full potential of cryptocurrencies. Although it has to be said that unearthing the DeFi world can be daunting for the uninitiated.
For most DeFi users, the journey into the scene has been slow and steady – from buying their first coins on a CEX to transferring them to a self-custody wallet to finally exploring DeFi. It is advisable to not rush into the DeFi world as it can be confusing and overwhelming.
Learning how it works and understanding the risks, threats, and possibilities of DeFi is crucial for a good user experience.
Once users have a basic understanding of DeFi and the risks that come with it, they can more safely dive into its more complex use cases. For example, they can start by depositing funds into a stable liquidity pool to earn a bit of interest or borrow funds with collateral instead of a credit score check.
Cryptocurrencies Beyond The Market
Over the years, it has become second nature for a newcomer to assume that cryptocurrencies are all about market gains and losses. Prospective crypto users should be taught that this is far from the case and should be shown the nearly limitless use cases for cryptocurrencies and blockchain technology.
When the pseudonymous Satoshi Nakamoto wrote the whitepaper for Bitcoin, Nakamoto did so to create a decentralized peer-to-peer payment system. Similarly, Ethereum was created with the aim of becoming a decentralized “world computer”. The speculation of crypto tokens is only a side effect of the exciting potential of cryptocurrencies.
Now that we are experiencing a crypto winter, it is a good time to double down on core blockchain and crypto narratives such as decentralization, privacy, transparency, immutability, and self-empowerment and the use cases that can be derived from them.
Financial Inclusivity and Freedom
Expanding on the topic of “crypto beyond markets”, we need to talk about the real-life use cases of cryptocurrencies. Financial inclusivity is where cryptocurrencies are making a significant impact.
If the general public was better informed on the decentralized nature of cryptocurrencies and the benefits that it brings to finance, mass adoption might soon follow. Recently there has been a widespread outcry against the actions of centralized financial institutions, catalyzed by the famous GameStop short squeeze battle against hedge funds like Citadel.
Furthermore, the benefits speak for themselves. They include 24/7 operation without bank holidays, tedious paperwork, and credit score checks ought to be an attractive proposal for someone.
Another crypto invention that is making a real impression is stablecoins. The global nature of cryptocurrencies has made it easier than ever to gain dollar exposure.
There are so many people in developing nations in Asia, Africa, and South America who would love to learn about and make use of stablecoins. These people may be looking for U.S. dollar exposure to protect themselves from rampant inflation and currency devaluation in their countries.
Look at what’s happening in Argentina and Turkey. In the last five years (as of 26 July 2023), the Argentinian Peso and Turkish Lira have lost over 86% and 75% of their value against the U.S. dollar. People in these nations are turning to stablecoins to hedge themselves against fiat devaluation.
Inflation isn’t the only problem that could be solved or lessened with the help of stablecoin and DeFi adoption. Some people simply don’t have access to banks. According to the World Bank, 73% of the world’s population is unbanked, with over 1 billion people that have no access to banks whatsoever.
With wider crypto education and awareness, more people will look to cryptocurrencies to solve problems related to traditional finance.
Do Your Own Research (DYOR)
One of the main aims of crypto education and awareness initiatives is to create a culture where people are hands-on in the management of their funds and investments. Among all the crypto slogans in the world, none is more relevant than “DYOR” in this context.
Unfortunately, the crypto sector is infamous for its scams, hacks, and other fraudulent activities. DYOR aims to ensure that the crypto newcomer takes necessary steps to safeguard their crypto assets. If it was practiced more faithfully, perhaps scams wouldn’t be such a massive problem in the industry.
DYOR crypto education and awareness initiatives look to instill the practice of investing funds only after conducting thorough research. More importantly, crypto participants are encouraged to not fall for common practices like pump-and-dump scams and ‘shilling.’
Shilling is a common practice where people hype up tokens that they are already invested in on social media, newsletters, and other platforms in order to persuade the public to buy these cryptos and drive up the price.
It is not always easy to distinguish the difference between a shill and a well-researched recommendation. The only way to protect ourselves is to DYOR.
Crypto education and awareness initiatives like DYOR and self-custodianship will not only bridge the knowledge gap for newcomers but can also help crypto become a safer place.
In turn, without so many headlines of constant scams and hacks, a safer crypto market would drive further adoption.
Crypto Education and Awareness Are Crucial
Crypto education and awareness initiatives are fundamental in promoting crypto’s wider adoption. These initiatives empower individuals with the necessary knowledge to traverse the ever-changing crypto landscape.
Only crypto education can dispel the fears and misconceptions that may be stopping a newcomer from discovering cryptocurrencies for the first time.
It is important for crypto advocates to ensure that education and awareness initiatives are unbiased and neutral to build trust and credibility with the mainstream public.