Home » The Explosive Growth of Cryptocurrencies and User-Generated Brands

The Explosive Growth of Cryptocurrencies and User-Generated Brands

by CryptoWordTalk
The Explosive Growth of Cryptocurrencies and User-Generated Brands

Cryptocurrencies represent a major paradigm change in branding when seen through the lens of marketing.

 There is an underlying discussion of interest to marketers amid the swirl of excitement and debate about where cryptocurrencies are headed and if they are genuine, sustainable, and smart investments. Crypto brands include Bitcoin (BTC), Ether (ETH), Cardano’s ADA, Litecoin (LTC), XRP, Dogecoin (DOGE), and others.

 If that’s the case, how are those brands formed, and what function do they play in the acceptance of each coin? Or, for that matter, how can a cryptocurrency’s branding collectively help (or subtract) from its validity as it tries to gain popular acceptance/use?

 Consider David Ogilvy’s definition of a brand: “The intangible sum of a product’s attributes,” as defined by the British advertising magnate renowned as the “Father of Advertising.” Identity, voice, empathy, value proposition, and consistency in delivering on commitments are all common examples. At the end of the day, characteristics like these, among others, encircle the nucleus of a product/service like atomic particles to build confidence, preference, and loyalty (or lack thereof).

 Creating a Financial Brand

Fiat currencies, in the sense that their issuing nations strive to build value and trust in them, may be considered brands. However, with little to no competition in their home nations, commodity identities (dollar, pound, euro, yuan, etc.), and no meaningful effort by governments (the “brand” owners) or other organizations to alter how the currency is seen or even utilized, it’s difficult to regard them as such.

In finance, stocks are a method of owning the companies that issue them.Mutual funds sometimes take on the aura of the companies that administer them, but there are some exceptions, such as Fidelity’s Magellan Fund and Vanguard’s Wellesley Income Fund. Funds may also be thought of as brand baskets.

Furthermore, commodities like gold, silver, and copper are just that: commodities. This leads us to the subject of cryptocurrency.

Take into account the following:

  • Bitcoin has a number of distinguishing characteristics as a currency, including:

(1) Satoshi Nakamoto’s pseudonymous quest for a decentralized currency culminated in the now-famous 2008 white paper, a hero’s epic tale in the form of Satoshi Nakamoto’s pseudonymous pursuit of a decentralized currency;

(2) It has a distinct and evolving personality, as well as a reputation as the father of digital money.

(3) All other brands (cryptocurrencies) are compelled to compare or contrast with the “first-mover” benefits.

  • Bitcoin and Ether are arguably the two main players, or established brands, with a growing, extremely lengthy list of “challenger brands” in the form of altcoins.
  • With names like Avalanche, Sushi, and Chiliz, these challenger companies each have their own unique selling propositions and a way of making investors/consumers remember them.
  • The craze for Dogecoin and other so-called memecoins — a “joke that turns into a crypto coin,” according to the Crypto Dictionary — demonstrates how pop culture (and, by extension, marketing) affects the markets. Older investors may scoff, but for younger investors, it’s nothing out of the ordinary, presenting Dogecoin and other cryptocurrencies as consumer money.
  • Finally, and probably most significantly, there is a fast expanding cryptocurrency economy in which technologies/platforms compete not just for financial engagement but also for social currency, or a share of voice on social media inside the cryptocurrency community and beyond.

Despite all of these facts, there are still a few interesting questions: First and foremost, since decentralization is at the heart of the bitcoin idea, who is in charge of and nurturing each of the brands? How can trustless technology fit in if trust is a key component of brand health?

The First Genuine User-Generated Brands Are Cryptocurrencies

A user-generated brand’s (UGB’s) material is mainly unsolicited and unregulated, unlike user-generated content (UGC), which is sought by marketing organizations to offer a voice for the consumer, genuine views, and active participation. Get it started, just like sourdough, and it’ll take care of itself. (Given the worldwide COVID-19 pandemic’s popularity, that felt like a fitting comparison.)

These brands are developed and maintained by project founders, user communities, investors, miners, and others, since they lack a central owner or the equivalent of a brand manager or chief marketing officer. They’re at meetups, forums, chat rooms, and subreddits, among other places. In fact, brand health is linked to how active the discussion is on platforms like this.

Crypto heroes like Andre Cronje and Vitalik Buterin, tech pioneers like Marc Andressen and Elon Musk, financial stars like Cathie Wood and Jamie Dimon, and popular voices like Shark Tank’s Mr. Wonderful (Kevin O’Leary) and The Mooch all play a role in shaping brands (Anthony Scaramucci). All of this indicates that the direction of these UGBs, as well as how they will be digested by individual investors, institutional investors, and the media, is largely unknown. Is that the case?

Developing the Cryptocurrency Brand

A foundation or decentralized autonomous organization is present in many, if not all, crypto initiatives (DAO). Consider Bitcoin.org, the Ethereum Foundation, the Cardano Foundation, and a slew of additional open-source sites, too many to list. These foundations use white papers as de facto advertising and seek funds via crowdfunding, utilizing ICOs as their currency. And, sure, advertising firms are recruited and other resources are put in place to shape their brands – but who approves the creativity may vary a lot, from the community of users themselves to those who hold governance tokens.

While these initiatives seed and shepherd their UGBs, there is only so much control available from a conventional brand management perspective. They may do the following with an active, engaged, and extremely enthusiastic community:

  • Profit from the herd mentality that underpins so much of the category. This is a heuristic that explains an investor’s desire to join the conga line — to follow other investors based on emotion (fear of missing out) rather than logic, and it leads to much of the space’s fast development. Allow the race to begin by arming yourself with influencers.
  • Keep the content momentum going. User-generated content is similar to a street performance in that if a few individuals start hooting and hollering, more people will glance to see what’s going on, resulting in a larger audience. As a result, high-quality material attracts an audience and generates more high-quality content. Here, the key term is “quality.”
  • Make learning enjoyable. Let’s face it, most people aren’t interested in learning how mulberry trees and fruits operate. They want to know what this new asset class is, why they should think about it, and how it might help them achieve their own objectives. As a result, a deliberate call to arms is required to make the material simple and entertaining to read.

Returning to the second point, the most essential job for any foundation, as well as its community of followers inside the UGB, may be to instill trust in the untrustworthy. To put it another way, to identify and differentiate the currency based on how well its technology/project has been verified, how safe it is, how genuinely autonomous it is, and — perhaps most crucially — how fast it can answer the question: What is it for?

Of course, this final issue isn’t unique to cryptocurrencies and their UGBs. Institutions that must communicate their choices to customers, companies selling exchange-traded products, exchanges themselves, wallet applications, and so on in this category that is growing at breakneck speed while remaining a massive mystery to all but a few will eventually distinguish themselves in the mainstream by doing what other great brands have done.

To put it another way, to debunk the widespread belief among non-crypto geeks that all cryptocurrencies are designed to replace fiat in the purchase of everyday goods and services, and instead to define their very particular functions.

 It will be interesting to see where cryptocurrencies go from here. Bitcoin was recently dubbed “the purest form of money ever created” by Ark Invest. It may, in a strange sense, become the purest form of marketing ever devised.

Related Posts

Leave a Comment

This website uses cookies to improve your experience. We'll assume you're ok with this, but you can opt-out if you wish. Accept Read More