A Sham-bolic Step?
Why a blanket ban on cryptocurrency advertising is a short-term overreaction
We’re at a tipping point. The number of people who have heard of cryptocurrencies is rising, but general understanding of what they are and how they work is still low. This has created a misconception among some consumers that investing in ICOs, and the like, is a surefire way to make quick returns. Scammers have recognised this vulnerability and are preying on it.
Technology firms have reacted not, as you might expect, by stopping the scams. They have suddenly over the last few months banned all cryptocurrency advertising. That’s despite the Advertising Standards Authority having received fewer than 10 complaints about crypto ads – ever.
It’s not difficult to find analogies that highlight how much of an overreaction this is from firms including Google, Facebook and Twitter. Wherever there is money – be that internet banking, crowdfunding or even cashpoints – people are scammed. That doesn’t mean every single financial institutions should be prevented from marketing to customers.
So why are technology companies pushing the panic button when it comes to cryptocurrency?
There is intensifying political pressure on technology companies. In the wake of the Cambridge Analytica scandal and the introduction of General Data Protection Regulation, firms are being held to account. The giants of the tech world in particular are expected to do the right thing if they want to protect their reputation. But the regulators are still working with funds to create the infrastructure needed for a thriving crypto economy, meaning there are no set rules yet to shape this decision-making.
In this tricky environment, and when ad technology is not sophisticated enough to spot the difference between a real advert and a well-constructed scam, the obvious immediate answer is a blanket ban on advertising. But this knee-jerk reaction only leaves users less informed and ill-advised.
While cryptocurrency is a new industry, it’s not going anywhere. Like stocks, the market fluctuates, but it is growing year-on-year. The number of ICOs is on the up with $5.6billion being raised in 2017 and 435 successful projects being implemented, each raising an average of $12.7 million. Traditional industries will continue to be disrupted as this trend continues.
Many financial institutions, investors, traders and, indeed, techies have already realised that cryptocurrency and the blockchain ledgers that underpin it are here to stay. Using these, innovative technologies are being developed at a pace to help consumers.
Look at the way SelfKey utilises blockchain to give people back control of their digital identities. Golem, the ‘Airbnb for computing’, is another example, allowing users to rent out other people machines when they need a power boost, for instance for rendering CGI.
Until regulation is finalised, the real opportunity then for tech firms and platforms such as Google, Mail Chimp, MeetUp, looking to protect their reputation is to partner with the many cryptocurrency and blockchain experts out there, and lead the way in ensuring their users actually understand the market and the many genuine options.
A complete blackout on information may be the easiest option but it’s not the best one for consumers in the long-term.