Why Cryptocurrency Is Not an Industry?
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What phrase should we use to describe the group of individuals and projects striving to expand blockchain technology’s application cases? Are we a sector, an industry, or something else? Noelle Acheson discusses why this is more significant than we would assume.
It is difficult to discuss novel ideas without struggling with words. It is not so much the need to occasionally employ obscure terms. The fact that long-established words can be insufficient and superior alternatives still need to be in common usage. A painful example is a word I use multiple times every day despite knowing it is wrong.
Those who frequently discuss cryptocurrencies generally use the term “industry” to refer to any initiative building on a blockchain, issuing a token, or facilitating the transfer of assets. But is “industry” acceptable? I researched numerous meanings and discovered the following.
You have the gist. The most prevalent definitions of an industry indicate that it serves a shared purpose and comprises enterprises that engage in similar activities.
There are articles covering crypto exchanges, non-fungible token (NFT) platforms, decentralized lenders, game developers, new blockchains, custody services, data storage, asset managers, and more on the leading crypto news sites this morning. What is the predominant business activity?
Making the argument that it is the promotion of blockchain technology. But should an industry’s classification be based on its technology or activity? Take the healthcare business as an example; its focus is on the well-being of individuals, utilizing whatever technologies are available. Or the insurance sector, whose objective is to protect any entity. An industry unified by the aim to promote a new technology rather than satisfy demands doesn’t sound very, well, dynamic.
In other words, is the technology itself the “big deal,” or is what it can achieve more significant? Those constructing likely argue that technology is huge, and they are correct. However, the technology will have little impact on the world without use cases. And isolating the technology in its industry grouping could impede its influence by establishing a distance between it and the activities it intends to disrupt.
Fairly speaking, this lexical mistake began in the “tech industry.” The term was originally used to describe corporations such as IBM, Oracle, and Microsoft that manufacture computers and software. Still, it has grown to encompass robotics research, headset manufacturing, payments, video conferencing, and mattress merchants.
Based on the pattern, this is a maturity issue. The term “tech industry” was acceptable when we emphasized technology construction more than its applications. Those applications were in their early stage of development. But requiring a categorization, developing mentality, and other businesses want the “cool” moniker.
In the early stages of the cryptocurrency sector, they prioritize developing cryptography and blockchain development. However, the emphasis is also on use cases, complicating the categorization. Yet, habits have been established, and labels are readily accepted.
It takes us to why categorization is more important than many realize. Industry designations are essential due to investing specialization and indices. In the same way, skilled venture capitalists may assist projects to discover synergies with those in other markets. Good crypto investors can also elevate entire groups through connections and collective learning.
And in the same way that the market is flooded with tech exchange-traded funds (ETF) that contain an odd assortment of business activities. We will soon have crypto ETFs (based on listed shares but eventually also tokens) that span a variety of industries.
Labels are also crucial for regulation. Legislators appear to recognize that they cannot regulate “technology.” Still, they may ensure that technology businesses do not abuse data or grow too large. However, there are several proposals for regulating “crypto” as if it were a single activity, even though it is already too expansive to be governed comprehensively.
Conclusion
As some habits are difficult to break (and as my inner thesaurus rebels against my overuse of “ecosystem”), “industry” will undoubtedly continue to appear frequently in my writing. I’ll try it because the crypto environment deserves more than outdated words.
