A new financial system; a more democratized, even more inclusive, financial sector; the future of the internet — the crypto ecosystem has been described as all of these things. However, as is evidenced by digital assets’ inherent correlation with the Nasdaq 100, most people fail to conceptualize blockchain as anything other than an extension of the traditional tech economy. While blockchain’s proponents laud its virtues and potential, they have been unable to make a comprehensive case for blockchain to everyday people.
Many crypto natives anticipate “the decoupling,” in which digital assets become financially independent from traditional tech equities. But without a clear plan of action for how to differentiate decentralized crypto technology, industry independence will be unrealized. Those of us who believe in the long-term promise of blockchain technology need to completely rethink how to pitch blockchain to broader society.
Related: A new intro to Bitcoin: The 9-minute read that could change your life
What is “the decoupling”?
The Bitcoin (BTC) whitepaper — published 14 years ago — demonstrated, at its core, the ambition to build a world of permissionless, decentralized payments. To date, this goal has been partially advanced with developments like El Salvador’s national Bitcoin adoption.
However, the cryptocurrency ecosystem hasn’t supplanted traditional finance. In fact, it has ingrained itself into it. Turn on CNBC and you will hear about the latest legacy institution entering the crypto space, and you will see minute-by-minute graphs of crypto price action alongside models of traditional equity markets. You likely won’t hear any blockchain commentator or industry leader speaking about improving financial transactions, eliminating third-party banking institutions, or any other defining element of the original crypto ethos.
The result of this broad change in purpose and perception is that crypto — despite being established to lessen dependence on traditional finance — grows and declines with the movements and behaviors of the traditional economy. Evidently, the Fed’s meeting memos and Amazon’s quarterly earnings calls have, at present, a far greater sway on the crypto ecosystem than anything laid out in Satoshi Nakamoto’s whitepaper.
If cryptocurrency cannot be financially independent from the legacy financial and technical industry it seeks to replace, what is the purpose of cryptocurrency? Decoupling is not an industry…
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