“If you don’t think about owning a cryptocurrency for 10 years, don’t even think about owning it for 10 minutes.”
This philosophy is popular among investors excited about the ability of blockchain to dominate Web3 as it becomes the infrastructure of the new Internet. On the other hand, if you exchange ‘cryptocurrency’ for ‘stocks’, you get a quote from Warren Buffett – word for word. Of course, Buffett would never say that about cryptocurrencies because he considers them useless.
So do a number of other powerful players, from close Buffett ally Charlie Munger to poster boy Peter Schiff. Add to the list JPMorgan Chase CEO Jamie Dimon, Nobel Prize-winning economist Paul Krugman, and even Senator Elizabeth Warren of Massachusetts, a progressive Democrat not known for siding with billionaires.
The cryptocurrency industry clearly has a PR problem, which it can partly blame itself on.
Since his debut in 2008, he has been able to make big promises that he hasn’t kept until now. First, it was meant to function as a currency. When the coin’s use case didn’t work, the dominant explanation for bitcoin’s intrinsic value was that it was an inflation hedge. Well, inflation jumped to 8.3% in the US and 9.9% in the UK. By this logic, Bitcoin should be thriving right now.
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The world’s first cryptocurrency doesn’t have a monopoly on false promises. We all know the story of non-fungible tokens (NFTs) that were supposed to change the way we exchange property rights, which instead turned into bloated JPEGs. They made way for games to earn (P2E) games, which then evolved into the metaverse and Web3 platforms — in name only, of course.
Crypto and Web3 should sell what they actually make. One of the first things a PR official says to his clients is not to overestimate journalists. Journalists don’t like to be tricked into opening promotional messages that exaggerate the value of a story, and will report it by publicly harassing you on Twitter and blocking your email address if you dare email them. And who can blame them? PR is designed to communicate in objective language the actual value of your product, not your fantasies of the future.
In this case, Warren Buffets and Jimmy Demons of the world feel they have been sold off by the cryptocurrency crowd, and they react similarly. This is bad news for the industry because one of the other things a PR professional tells his clients is that having big names on board will give them much better PR results. If the crypto experiment is to work, it will need the best and brightest people in finance and fintech, as well as the principled and encouraging support we see from the likes of Elon Musk.
Every mediocre P2E game or money-hungry NFT auction house claiming to be “Web3” seriously damages the industry’s image, as do hordes of investors who bet their money on blatantly advertised projects. Of course, now that so many investors have lost billions in the bankruptcy of even the most legitimate crypto firm — from Centennial to Three Arrows Capital (3AC) — we can expect less.
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We can also expect less resistance to regulation, which is another important part of industry PR efforts. Imagine that you are trying to improve the image of a company that does not follow the rules or regulations that traditionally govern corporate affairs. Employees can publicly reprimand their superiors, steal money from the company’s treasury and do side business with competitors. It’s a crypto industry now, given that most rules and regulations regarding finance – and even false advertising – are hardly enforced.
Only companies actively building the infrastructure of the new Internet should call themselves Web3. This includes, for example, using tokens to improve document exchange and leveraging the blockchain to create platforms for privacy and secure communication. There are legitimate blockchain companies making Web3 products and they should be the ones making the noise.
In public relations, your success depends on your story, and your story is your product. Only when blockchain projects show the big players in finance that their technology has something to offer that Web2 cannot, will the biggest investors join them.