Ever since Bitcoin launched in 2009, millions of people around the world have been scrambling to make a quick buck in the relatively unpredictable market of cryptocurrency.
With millionaires being made overnight and meme coins tripling in value thanks to a single tweet from Elon Musk, it’s difficult for some to take the market seriously, especially when it’s contrasted against the traditional stock market.
As the market continues to grow and blockchain moves from being just a cryptocurrency technology and begins propping up decentralised businesses, including the likes of decentralised pension schemes, the consumer perception needs to change.
In a recent document, Forbes reported the decentralised finance (DeFi) industry grew from $700m in December 2019 to $13b in December 2020, and recent figures suggests it currently sits around $40bn. So, it begs the question as to what the sector can do to shake off its ‘gimmick’ image.
However, there may be a silver bullet that could change the world’s perception of blockchain and what it is really capable of: Social Responsibility.
Whether that be through humanitarian partnerships or donations or through managing sustainability efforts and targets, crypto can help move the needle on social responsibility.
More than ever, consumers are interrogating businesses and what they stand for. They expect organisations to be responsible and give back to the world they operate in. A 2020 study by Zeno revealed that consumers are up to six times more likely to purchase, protect and champion a business that has a purpose and gives back to society.
More and more companies are coming under scrutiny for what they’re not doing or receiving high praise for going above and beyond; the middle ground is a hard place to reside in todays’ world. For example, furniture brands being linked to illegal logging schemes or petrochemical companies not doing enough to clean up oil spills, these issues reverberate with the consumer and in turn harm a brand’s public image.
One of the biggest areas of potential focus for the cryptocurrency and DeFi industry is offsetting its carbon footprint. Unfortunately, the way in which the industry’s biggest player, Bitcoin, is designed, results in astronomical energy usage, often fuelled by fossil fuels. This is one of the biggest ‘cons’ perceived by those who are yet to dabble in the market, and one of the biggest stains on its reputation.
Of course, there are businesses and currencies out there that are more efficient than others. However, thanks to Bitcoin’s presence, it often leads the conversation and with its current energy consumption being higher than that of the entire consumption of Argentina, you can begin to see the importance of offsetting a carbon footprint.
VIP$ Coin launched to market with an entirely different model. As an asset-backed currency, unlike bitcoin, its value isn’t secured against the market’s perception of scarcity thanks to the slow pace of mining. Its value is secured against $3.6T dollars of physical in-ground assets.
Securing the value of a cryptocurrency against in-ground assets allows the landowners to earn an income through the sale of the coins with a percentage being set aside for the asset owner. This encourages the capping of oil wells and prevents drilling land for minerals.
Whilst this model is not unique, VIP$ Coin is one of the few currencies that has access to the landowners thanks to the relationships forged through the coin owner’s previous work in the petroleum and energy space.
However, environmental protection isn’t the only way for blockchain to offset its negative image. As with any business, DeFi industries have the ability to work closely with local communities or charities to use the income and technology for good by supporting humanitarian efforts across the world.
With many blockchain technologies being digital and therefore light on overhead, building community or charity donation schemes into the framework of the business or cryptocurrency will enable companies to do good as their business grows.
In fact, as the new world of cryptocurrency staking comes into the fold with the launch of Ethereum 2, DeFi business have an even bigger opportunity to leverage their interest gains to help charities with socially responsible projects such as education and development programmes.
Equally, taking a note out of VIP$ Coins’ book, new currencies of blockchain businesses can set aside a portion of sales profits or even a number of coins or tokens to be directly donated to humanitarian causes meaning as the business prospers, so do the communities around it.
Ultimately if the world of blockchain and cryptocurrency is to be seen as a legitimate market, the same as that of the traditional business world, it needs to hold its self-accountable to the same standards.