The Effect of Tribalism on Crypto

The Effect of Tribalism on Crypto

Although we all view ourselves as individuals, we frequently prioritize identifying with a community. Whether it's through religion, political party, sexuality, fandom, astrological sign, or crypto investment, you assuredly have identified yourself with one of a few options. This is particularly prevalent with content and technology. These identities can often be superficial and fun, but they also can create unnecessary division.

Many new technologies depend on their massive communities and user base. These communities, are inherent to the technology functioning. For instance, most social media sites are nothing more than a framework for you to fill up with content. Without the content you provide, it would just be an empty page. This can be equally true for many cryptocurrencies. Although some are built around a specific function or technology, many of the largest market cap coins are simply networks that rely on their users for the network to function.

Some of the largest and most engaged crypto communities include Ethereum, Cardano, and Solana. These communities engage with their users in countless forums including Reddit, Twitter, Discord, and Telegram. To some degree all these communities intermingle with each other, but the overlap is limited and usually involves the typical comments that devolve into internet slap fights. Many users end up staying loyal to a coin or a small set of a few. Terms like FUD(fear, uncertainty, and doubt) or FOMO(fear of missing out) are thrown around to either dismiss or project posts by their motivation. Due to volatility and fear of market manipulation, many of these communities seek out and bury threads that spread "FUD" regardless of the motivation.

Although there are plenty of investors with completely diversified portfolios, it's obvious that many small investors active in the online communities are focused on one or two main technologies, coins, or networks. These communities much like any other becomes an echo chamber, highlighting positive news and downvoting negative news.

"The vast majority of U.S. adults have heard at least a little about cryptocurrencies like Bitcoin or Ether, and 16% say they personally have invested in, traded or otherwise used one, according to a new Pew Research Center survey. Men ages 18 to 29 are particularly likely to say they have used cryptocurrencies." - Pew Research Center Survey 2021

There are still quite a few limiting factors in the roadblocking wide-spread adoption. Not just adoption for the typical Millenial/Gen-Z reddit browser, but throughout entire industries. Although many of these are legal or technological, there is still the cultural aspect that we all contribute to.

Our main concerns with technological tribalism is that it can form the aforementioned echo chambers, it can create division, and it can dissuade new investors. These all overlap however, all three certainly have their own role to play.

Echo chambers by themselves stifle arguments, friction, and confrontations which can make communities feel safer. However, stifling interaction especially direct criticism eventually leads to a developmentally limited environment. Adversity breed adaptation and growth. Without criticism or opposition, there is no possibility for evolution.

Echo chambers are frequently highlighted as facilitators of tribalism. They have mainly been newsworthy during the last two large elections. Echo chambers can have many negative impacts to investors, but the largest is an unrealistic narrative that is repeated over and over regardless of how accurate or inaccurate it might be. Frequently this can be seen in any major online community dealing with crypto or even stock market investing. When prices drop the loudest voices are frequently upvoted with statements akin to "Don't believe the FUD. Buy the dip." In this case, retail investors maybe gambling with more money than they are prepared to lose and the majority of the feedback they are getting is to continue buying.

Regardless of whether you are "buying the dip"or not, you want to be able to make the most informed decisions you can make while investing. These echo chamber in many ways can deafen you to valid criticism that may  be arising.

Outside of the communities, these echo chambers can also be created by Youtube or Tik-Tok "investors". Many of these content creators are making money off of advertising regardless of how accurate their advice may be. Due to the volatility of the market it would be insanely difficult to vet each one of these charismatic influencers that is talking about their price predictions.

Lastly, we will say that echo chambers can culturally disincentivize diversification which can be harmful for the community as well as the individual. "Cardano is going to be 10 dollars by 2022" or "wen lambo" can lead especially new investors to limiting their portfolio to one coin with a charismatic leader. Many crypto investors like myself are looking for high risk high reward opportunities, but throwing all your money onto one emergent technology or branding can be harmful and detrimental to your success. Each opportunity presents a potential gain in a new and expanding market. There is so much money able to be made or lost. However, if you are a crypto investor, you ideally want all crypto technology to be used. The higher the adoption rate, the higher demand ideally for all networks and technologies.

Moving past echo chambers, the division seen in tribal communities can be manipulated, branded, or used for many purposes. The current branding for crypto is obfuscated throughout all mainstreams sources of media. Especially with the advent of NFT's(non-fungible tokens), there is a lot of confusion as to the nature of all forms of crypto currencies. "Are these all just ponzi schemes?" NFT's require their own post, but for the purpose of this argument, the branding itself creates a higher barrier of entry.

Outside of the technological obfuscation there is also a considerable amount of other toxic branding associated with bitcoin or crypto. From ponzi schemes, to black market transactions, to "bro" culture, and that's just scraping the surface. The barrier of entry keeps getting higher. The more divisive the communities and the more fractured the technologies and branding the harder it is to get any form of immersion that is rewarding.

Division and barrier of entry go hand in hand especially when it comes to advocation and branding for crypto technologies as a whole. Again we will state that wide-spread adoption involves a lot more than all of our friends interacting and transacting with crypto. It requires an entire industry from top to bottom to find enough benefit and stability within the tech and the market to invest more than just liquid cash.

With limited division, there can be more constructive conversations with valid criticism. All of these conversations are fully public. The more civil and constructive the community, regardless of which crypto you own, the better it is for adoption, branding, and engagement.

For the normal retail investor, there is little you can do to change the trajectory of crypto adoption. However, the more positive, constructive, diverse,  and frequent the engagement, the healthier for the global community. Whether you are an investor, a spectator, a die-hard Cardano staker, or whatever, your engagement ripples throughout all communities. You never know when a ripple can cascade into a tide.

One way of supporting all the communities is also to diversify financially and energetically. If you are an active community member, feel free to jump in other subreddits or community boards and reach out. Beyond your normal engagement, if your transactions span multiple blockchains using multiple different defi products, not only are you supporting a wide range of developers, but you are taking part in testing out these products and their capacity.

We'll wrap up by saying Tribalism is certainly not the largest roadblock for crypto, but it is certainly the easiest for any one person to impact. Here's hoping that division between brands, networks, and tokens will lessen. Many of these projects are focused on promoting and facilitating decentralized financial applications. The last thing we want is only one central blockchain controlling the promotion and application of this plethora of new technology.

Thanks for reading!