Hey, when you saw the title of this post, you thought i am an expert in cryptocurrencies and maybe i have been in the game for a long time now. The simple answer is no. In fact, I am a newbie so to speak but what I want to write is something so plain for all to see.
Since lately, crytocurrency have been a trending topic. And just about 10 years ago, noone was talking about Bitcoin, Etheruem, and so on. But what do we see today? Its difficult to end the day without hearing and seeing news about bitcoin and other cryptocurrencies. Bitcoin has been the global leader in cryptocurrencies. But if you follow the cypto game, you probably see a lot of coins come into the show. Some are successful within a short time. A lot others do not make it to the Initial Coin Offer and they simply disappear? So the questions is this: why do most crytocurrencies not survive long? What is the main challenge facing emerging cryptocurrencies and how does Steem cope?
The main challenge facing cryptocurrencies
Well, the experts will tell you about major issues like scalability, security, portability and the rest of them. That is not what am here to discuss. According to me, the main challenge facing each and every coin out there is: acceptability. This is the same issue facing every new product, service and invention. How do you get people to abandone their former way of doing things for a new one? How do you get people to accept that your service is better than what they use? in the case of cryptocurrencey, how do you convince people to dump paper money for your coin? To penetrate an already competitive crpto market, you need to get people to start using your coin; and that is what sends most crptos packing.
You see that Bitcoin is leading. The chasing pack is made up of lots of cryptocurrencies people have invested in. For any new coin, the question of accpetance is paramount. Coins appreciate in value when people demand for it; when people use it. If people in general fail to accept and use it, the value drops and eventually, it goes out of existence. The issue of acceptability is not unique to cryptos alone. Every new product or service survives when the markets accept and embrace it. You could remember some product or service that went out of existence because it was not absorbed by the target market. So if noone buys your product, you cant sell. And if there are no sales, production cannot continue and eventually the business will close down. It is the same with cryptos. If noone buys or invests in your coin, there is no demand for it. Eventually, we forget about it.
So as i see it, that is the major issue facing new coins in the markets. The challenge of acceptability is so crucial because if you overcome all challenges and fail to address this one, you go nowhere.
How did Steem address the issue of acceptablility?
Well, the model Ned Scott used in getting people to accept his coin is simply genius. Instead of working towards breaking into the crpto market, Scott created a basis or platform for the use of his coin. and this platform is built on a critical human need; the need for social interaction. I have herad many people say that man is a social animal. We have the need for social interaction. The boom of social media industry testifies to this fact. So instead of creating a product, Scott created a platform for the product. Steem is the first and only blockchain built on a social media platform.
Scott understood that the social media industry is a multi-billion dollar industry. He knew that if we could get people into a social environment and reward them for coming on and interacting with others; then there should be a system for making such rewards. Hence, people saw reason to use steem because they need to be on a social media platform. Before we got on steemit, we maintain one or more social media profiles on different platforms. It was really a thing of genius to think of a system before the product. And this model worked incredibly well for Scott and it can work for any other smart person out there. While others create a product and head to the market, Scott created his own market before the product.
The lesson for Crypto Merchants and Inventors.
It is always nice to think of existing markets. But it is best to think beyond the markets. whether it is the crpto game or any other product or service, Scott has taught us that it is possible to create both the product and the market. It just requires thinking out of the box. If i want to create a coin, is it possible to also create a new market? Scott says its possible. Steem is not just sold in the open crpto market, it is sold on its own market; Steemit.
Anyone can create a market before the product. What Scott did was simply astonishing. He succeeded in the most competitive market. He succeeded the most dominated market. When we talk about social media, its all about Facebook, twitter, Google, and the rest. How do you get people to abandon Facebook? Its genius and you can do it.
I want to take this lesson home and brainstorm on how to create a market for my crypto, product, service, initiative and invention. In such markets, there is no competition.