The importance of user education in crypto 

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Cryptocurrency has rapidly evolved over the past decade, expanding from a niche interest to a global industry that has pushed the boundaries of technology, finance, and currency. Digital currencies are now becoming integrated with the global financial system and the lines between traditional and decentralized finance are blurred. However, this has also increased the complexity and novelty, which brings its own set of challenges. As previous fintech booms have proved, a knowledge gap between the technology and the user doesn’t benefit anyone. Excitement and enthusiasm in cryptocurrency are huge reasons why this industry continues to flourish, but it cannot solely rely on these factors. This article looks at why it is so important for the crypto industry to foster educated users with the knowledge and confidence to fully comprehend, and experience, the impact of the technology. 

Understanding the technology

Users need to have at least a basic understanding of the technology in order to effectively articulate what is easy, hard, useful, or useless. Crypto and blockchain technology are complex, but demystifying the concepts for newcomers allows companies to onboard many more users. The accessibility of the technology also means a larger pool of people can contribute to its success and development. 

Underbanked and unbanked

According to the World Bank, around 1.4 billion people worldwide were unbanked in 2021, meaning 1.4 billion adults do not have access to any bank account. There are many, many more who remain ‘underbanked’, a term which refers to an adult who may have access to a bank account but cannot access a full range of traditional services such as credit cards or loans, and has to rely on non-traditional forms of finance such as payday loans, cheques or cash-in-hand payments. 

Crypto and the blockchain offer huge potential for financial empowerment of the unbanked and underbanked. Many developing countries are looking to digital assets to stabilize volatile markets and expand financial inclusion. Crypto is also borderless, and inclusive, allowing for a much more secure and fast remittance solution for immigrant populations. India, Nigeria, and Vietnam recently topped the Crypto Adoption Index from analyst firm Chainalysis. Without user education, populations that are already more vulnerable to financial stress are at an even greater risk.  

Security 

Unfortunately, the crypto space is prone to scams and fraudulent behavior. Education therefore plays an important role in helping users to identify and avoid these traps, whether that is phishing scams or fake investments. 

While it is the responsibility of the industry to ensure the safety of its customers through technology and strict safety protocols, user education is a helpful - and fairly low cost - addition to ensure security for both companies and their users. 

Innovation 

As users become more knowledgeable and aware of the limits - and potential - of the technology, it brings in more people to foster innovation in the space. As many companies learn in their early days, there is no better feedback than that of your customers. If that feedback comes from a place of understanding, it can help to quickly identify new user cases and improvements, and drive a more entrepreneurial movement in the industry. 

Regulation

Compliance and regulation are always changing. It is hard enough for those working and building in the crypto industry to keep up with, but much harder for customers. As the regulatory landscape changes, educated users can better understand these changes, how they impact them, and what they can expect from the organizations they engage with. Feedback and concerns brought up to the regulators are also more comprehensive and useful when they involve users as well as players in the space.   

Limiting misinformation

Cryptocurrency can suffer from an image problem. Whether that’s on a specific corner of the internet, in a certain part of the world, or amongst a particular group of people - there are myths and misconceptions from all corners. This not only limits the growth of the cryptocurrency ecosystem but can also lead to fear and anxiety among users, which - as it can with any kind of financial product - can cause panic and have a detrimental effect on people’s money. 

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User education and growth

User education equals adoption. That’s not just a sentiment that is shared by some companies in the space (including Fideum), it’s now clearly a fact. Earlier this year a paper was published in Nature that studied the relationship between cryptocurrency awareness, acceptance, and adoption. The study concluded that ‘the findings suggest that cryptocurrency awareness plays a direct, positive and significant role in shaping cryptocurrency adoption…These insights emphasize the necessity of fostering an informed understanding of cryptocurrencies to accelerate their broader adoption in the financial ecosystem.’

This informed understanding is what empowers users to engage in crypto, and be active, impactful users of the technology. Without people gaining a better understanding of cryptocurrencies, seeing through the misconceptions, and being able to protect themselves, they are unlikely to adopt them and the industry simply does not grow in the way it needs to. 

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