What are cryptocurrencies? 

The cryptocurrency market is a distributed ecosystem based on the peer-to-peer (P2P) network technology. Decentralization is a defining trait of this system, and it’s a reflection of the fact that there is no central bank or other instance that enforces control over the network. The transactions are conducted and verified via a distributed Blockchain framework that depends on resources of users, who are called miners. They make the processing power of their computers available to the network, which then solves complex mathematical problems (SHA 256 Algorithm). In return, miners receive a reward in a particular cryptocurrency. This kind of necessary arrangement is a revolutionary solution that gave rise to the wave of financial innovation and disruption. 

Since their inception, cryptocurrencies have remained exclusively digital in nature. They have no physical form and aren’t linked to any conventional standard, such as gold. However, over time, they have moved far away from their founding ideology, which confined them to the fringes of the financial realm. The evolution has ushered in a new era in which cryptocurrencies would establish themselves as a fully-fledged market. It’s quite interesting that even major countries plan to roll in their digital coins to get back the control they lost to decentralized markets. These national solutions will differ from traditional cryptocurrencies but are poised to operate on similar principles. Among the countries going down this path are China, the USA, Russia, Turkey, Sweden, etc. In the years to come, more nations are likely to join their ranks. 

Speaking of the future of cryptocurrencies, we believe that it will be closely tied to DeFi projects, which is to say decentralized finances. The goal of DeFi is to automate current financial processes related to loans, savings, trade, insurance, etc. More and more emerging cryptocurrencies are gravitating toward this DeFi market, which should expand on some promises that pioneers like Bitcoin made to the consumers. Most notably, DeFi is expected to make money, financial services, and transactions much more accessible to people around the globe. They will be able to engage with DeFi via the internet and smartphones.

Another solution poised to boom comes in the form of smart contracts. They are very similar to regular contracts, the difference being the automated process of authentication, which plays out over a blockchain, as a direct, self-executing agreement between two parties. They are written in code language named Solidity and offer a high level of security— the contracts can’t be forged, falsified, or tampered with in any other way. The second benefit is the superior speed of contract processing. 

So, it’s no wonder some prominent cryptocurrencies, such as Ethereum, utilize smart contract mechanisms. Also, large corporations, such as the streaming giant Inmusik and diamond company Tracr, have adopted smart contracts to revamp their supply chains and revenue streams. That way, they aim to solve two burning issues— the lack of ownership and transparency. Smart contracts have also made an impact in the legal, real estate, logistics, shipping, and banking industries. 

What does the future hold for bitcoin and other coins?

It’s tricky to predict the future value of cryptocurrencies, but taking a look at the history, it’s obvious the market is prone to both positive and negative cycles. Their interchange takes place every one to four years on average. Many cryptocurrencies have even completely disappeared from the scene. Therefore, it makes much sense to focus on underlying technologies and systems such as blockchain, DeFi, and smart contracts. They are, undoubtedly, the future of money and the financial sector as we know it. 

That said, we should also point out cryptocurrencies, despite high volatility, are quite resilient. Take the example of the first cryptocurrency to emerge, the Bitcoin. Not only has it survived to this date but it recorded astounding growth over the years. Believe it or not, in 2010, the first Bitcoin transaction was 10,000 Bitcoins for 2 pizzas. This inception moment, May 22, became known as Bitcoin Pizza Day. Today (12th June 2020), however, only one Bitcoin goes for $9,435. And make no mistake; this crypto paragon has evolved way past shady corridors of Darknet. Nowadays, we have examples of it being used in influencer marketing by startups in the league of indaHash. This company announced it would pay social media influencers through a blockchain cryptocurrency resembling Bitcoin.  

On top of that, we should point out that blockchain has permeated digital marketing in a big way. Take the example of the famous KFC, which decided to launch a pilot project with the purpose of applying blockchain to online advertising and media buying. One of the main objectives of the project is to refine the supply chain and make it more transparent. Applications like this one will clear the way for other cryptocurrencies to enter the mainstream. 

Many of them are already big business, and they are here to stay. 

The state of crypto marketing 

The rise in popularity of Bitcoin and Blockchain may have brought forward a slew of new cryptocurrencies, but these solutions have to be promoted in order to stay afloat. The way to do this was marketing, or to be more precise, the advertising via Facebook Ads and Google Ads. The tactic worked for a while; however, a seismic shift occurred in 2018, when Facebook and Google banned ads that promote cryptocurrencies. The high unpredictability of financial products justified this move. Namely, the two digital gains saw the crypto market as “unregulated” and “speculative”. This was a blow to cryptocurrencies, but far from a lethal one. 

Let’s examine why this is taking a long way around. 

Developing the strategy of digital communication for our client, the ECD.rs platform for buying and selling cryptocurrencies in Serbia, Macedonia, and Montenegro, we had a chance to research industry trends. We got familiar with the specific conditions of the industry and the marketing that goes on in it. What is more, during content creation for their digital channels, which was done in accordance with the established strategy, we had an opportunity to learn more about the ins and outs of the sector, as well as the characteristics of the target group— cryptocurrency users.

For many of them, the main problem is that cryptocurrencies don’t have a physical shape— they can’t be seen or touched. From this immaterial quality stems poor awareness and knowledge of how the system functions and these are the obstacles that digital marketing has to face. This is to say that we have to educate consumers first and teach them how to buy, handle, and save in cryptocurrencies. Then, we can entice them to actually purchase something via virtual money. 

Another challenge to be aware of is the unavailability of data. With regular (credit card or PayPal) transactions, companies can leverage payment track records for valuable data. Conversely, cryptocurrency exchanges leave no such trace. They give all the power and privacy to consumers, hiding the history of transactions from public view. You can’t get information from intermediary stakeholders because there are none to speak of. 

Overcoming the hurdles 

Nevertheless, cryptocurrencies have become much more than a shady payment mechanism. Bitcoin heavily relies on marketing— it’s just not the type of marketing we’re used to. Due to its decentralized configuration, the crypto king doesn’t own any channels and has to count on word of mouth (earned media) exclusively. This reminds us that digital marketing hinges on many different tactics, not just advertising.  

Hence, we have to realize the main tools for crypto marketing are channels and media assets that users create themselves: blogs, podcasts, and tutorials. Word of mouth plays a vital role as well, which involves referrals people give to people in their social circles. We would underline the importance of forums like Reddit as well, where cryptocurrency news and discussions enjoy high popularity around the clock. The same goes for chat groups on the Telegram forum, Medium, etc. These are hubs where cryptocurrency users dissect topics, share information, and voice their opinions regarding the goings-on in the crypto landscape.

One of the chief social networks people use to talk about events in the crypto world is Twitter. In some cases, even the content that promotes cryptocurrencies is allowed. Just behind Twitter is Facebook, which is an excellent channel for distributing interesting, educative, and entertaining information. 

When talking about marketing in the crypto field, we also have to highlight the place traditional media have. They form public opinion and shape consumer trust in cryptocurrencies, profoundly influencing the market growth. For years now, we’ve had media outlets specializing in the crypto industry, such as Cointelegraph and Coindesk. The Forbes Magazine has a special segment on cryptocurrencies, which is linked to the separate Twitter account. They all approach crypto affairs from an analytical, comprehensive perspective, always keeping up with what’s current. 

On the other hand, mainstream media view cryptocurrencies from the Bitcoin-first perspective, covering mostly wild ups and downs in the price of this cryptocurrency. Such an approach tends to be sensationalistic and mystifies the whole industry. A major problem here is a low degree of knowledge of the sector on the part of media workers. 

Of course, the coverage varies from state to state. In some of them, mainstream media is the only source of information on cryptocurrencies. In others, the sources are more diverse and specialize in the crypto market. Furthermore, certain states frown upon crypto transactions or declare them illegal. On the opposite side of the spectrum are the countries that have essentially made cryptocurrencies equal to fiat money. A French Court, for example, has ruled that Bitcoin is money after all. Such legal precedents will accelerate the growth of crypto markets and remind us that the outlook of states on cryptocurrencies isn’t set in stone— it’s changing around the globe. 

Means of reaching the target audience 

People around the world exhibit unequal levels of knowledge about the crypto industry. Some are active and eager users, enthusiasts with in-depth insights and developed trust. Channels we can use to reach them are the aforementioned forums, Twitter, but also influencers who are relevant for the industry and the world of technology in general. To name a few, some of the most prominent crypto influencers on social media of today are Vitalik Buterin, Naval Ravikant, Michael Terpin, and the Winklevoss Twins.

Still, most people don’t possess in-depth knowledge about the industry, which means the educational content is crucial for them. What is more, the most suitable channels of communication are social media, Facebook being first and foremost. We should also mention conventional media channels that can be used to raise general awareness and educate potential users. 

Viable marketing tactics 

A conclusion to draw from all of this is that the main challenge marketing faces with the crypto realm is developing content that is aligned with the varying levels of knowledge people have. One has to find a way to rally them around crypto topics, build a community, and deploy the right content on a regular basis. This content must deliver expert market analysis and actualities from the crypto world. It should stir discussions on forums and lead to the collaboration with the relevant influencers. Engaged users are of paramount business importance because they can act as brand ambassadors and spread the word around. As we mentioned earlier, mouth-to-mouth marketing holds the key to successful promotion in the sector. 

And for people who are yet to make their first steps in the crypto world, we need to emphasize the educative aspect of the content. This is to say we should publish blog posts, tutorials, explainer videos, and interesting information. It would be a good idea to provide tips on trends and things people can purchase via cryptocurrencies. It’s worth explaining what other ways of using cryptocurrencies are as well. Finally, native content pieces and articles published in other media are integral to achieving organic search visibility, but also spreading awareness and about cryptocurrencies and the industry in general. 

If you have a business operating in the crypto industry and you need a digital strategy or content developed, don’t hesitate to contact us.