It’s common for people to talk about communities in crypto. We hear talk of the ‘Bitcoin community,’ the ‘Ethereum community’ and so on, but how important are such ‘communities’ to the development and success of their related crypto projects?
They’re very important, according to various crypto industry figures who’ve spoken to Cryptonews.com. They provide a crypto project with its initial core base of users and developers, and they also champion a crypto so that more users adopt it.
But not all crypto communities are created equal, with some communities adding genuine value to their cryptos, and others simply functioning to pump a coin and make a quick profit. And in the long run, specific communities for single cryptos may become unnecessary as these cryptos gain widespread adoption.
A cryptoasset is its community
“There is no cryptocurrency unless people build on top of it or use it,” said Bitcoin Core developer Nicolas Dorier.
“Community is the blood of any project; if the community disappears, the project dies.”
Dorier told Cryptonews.com that communities – in terms of developers and holders – are indispensable if a cryptoasset is to grow.
“Communities are more important than their creators, as if the creator of a project disappears, the community will take over the project in one way or another.”
Guardian Circle founder and crypto author Mark Jeffrey agrees that a crypto project is more likely to succeed if it has a more vibrant community.
“All of the cryptocurrencies that I have seen win have had strong communities,” he told Cryptonews.com. “Bitcoin had BitcoinTalkForum, NEO held in-person developer meetups worldwide and just in the past few weeks, YFI created a surprisingly active and strong governance community.”
Jeffrey also pointed out that the converse is also true, in that if a crypto’s community starts to waver, the fortunes of that crypto and its price start to go south.
He added, “EOS had a strong community of block producers at launch, but disillusionment with Block.one refusing to further develop or fix the core EOS chain in favor of side projects like Voice has led to EOS price itself failing to get any traction out of the USD 2-USD3 range.”
The good, the bad, and Dogecoin
Definitions of success can vary for crypto projects and their communities. Some communities really believe in creating a decentralized form of money, while others arguably aim at growing a market capitalization.
“Success to me means creating a new money, a new currency. By that metric, only Bitcoin has succeeded,” said Bitcoin maximalist and Blockchain Capital partner Jimmy Song. “Success to most cryptocurrencies is usually achieving a certain market capitalization. That’s doable in many different ways and some of them don’t require any community at all.”
In other words, there are subtly different kinds of crypto communities, and not all are necessarily as positive as each other. For Song, some are basically glorified pump groups.
“The reason these communities exist is because there’s a strong bag holder effect where those with the currency want others to get in so their holdings are worth more,” he said. “That’s certainly helpful for getting a higher market cap, but not necessary or sufficient.”
Mark Jeffrey suggested that there are three basic types of community:
- The first truly believes in the utility of its crypto,
- The second mostly wants to speculate,
- The third is basically in it for fun or for the memes.
“Some are sheer enthusiasm for no particular reason, like Dogecoin,” he says. “Dogecoin is a brand that represents optimism no matter what, like that of a dog, so people buy it.”
Others are highly complex technical beliefs of one sort or another, Jeffrey added. “This blockchain has feature x which makes it uncrackable or faster, or that blockchain features DeFi mechanisms and verified identity at the core level.”
As with Jimmy Song and Nicolas Dorier, Jeffrey holds that some communities are simply about pumping.
“Then there are some like Hex that have more than a whiff of carnival pumponomics — it exists to inflate, and if you’re on the inside first, you get paid. Tron has some of that vibe as well.”
Such communities are negative in Jeffrey’s view.
“When folks look down on the crypto space, it’s these things that provide the most evidence of bad acting.”
Future adoption and fragmentation
There’s little doubt that communities are essential for cryptos, particularly when cryptoassets haven’t gained mainstream adoption. But in a future scenario where the likes of Bitcoin do enjoy widespread use worldwide, communities may become less-than necessary for their development and success.
“After a critical mass of people use a project, the community does not matter that much as it becomes very costly to switch to an alternative,” said Nicolas Dorier.
“The social relations around the project becomes less cohesive, early adopters and enthusiasts matter less. I don’t think we are anything near that stage with Bitcoin, it definitely still needs fire power from the community.”
Jimmy Song suggested that global mass adoption wouldn’t create a single worldwide community of users, but rather multiple communities interested in different aspects of Bitcoin.
“In a sense, there are multiple Bitcoin communities already,” he concluded. “There are those that are more into privacy, others that are into individual sovereignty, others that are more into sound money. There’s no one community, so in the event of mass adoption, I suspect there wouldn’t suddenly be one community going forward.”
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