Crypto education can transform the FinTech industry. This is how.
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FinTech is an umbrella term for all cutting-edge software technology developed to improve businesses’ and individuals’ access to and use of financial services. The industry has a market value of over $330 billion and is expected to grow nearly 20% over the next six years. Cryptocurrency, with its backbone technology and blockchain, falls under the FinTech umbrella, creating a whole new digital financial sector and revolutionizing it. For example, FTX and Circle are among the fastest growing FinTech companies that secured $1.8 billion and $1.5 billion funding rounds in 2022.
FinTech companies are growing and so is the number of crypto users. Around 300 million people in 2022 will use cryptocurrency – almost 4% of the world’s population. While cryptocurrencies have become more popular due to the rise of DeFi, the level of adoption indicates that most non-crypto users avoid participating due to a lack of knowledge about the technology. Crypto-assets and blockchains seem complex at first glance, and therefore difficult to understand for the average person. With this in mind, people might as well stick with fiat and never look at digital assets again.
This is where crypto education provided by market players comes into play. The main benefits of providing the general population with detailed, easily digestible, high-quality crypto education can be summarized as follows.
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Crypto education facilitates a more open and inclusive FinTech industry
By making crypto education accessible to non-crypto users, the general public will feel more comfortable using cryptocurrencies in one way or another, whether they are trading or investing in it or starting their crypto-related businesses and startups. Education is essential to reduce volatility over time because more people entering can counteract volatility and price fluctuations. Education also makes people more prepared in the face of panic about crypto price movements.
However, it is not only about the financial aspects. Blockchain has many use cases outside of crypto, including implementing smart contracts and securing personal access to identifying information. By learning how blockchain works and receiving proper guidance from an expert, the average person can integrate this technology into their business regardless of industry – healthcare, travel, education, insurance, education and more. The growth of the FinTech industry directly correlates with how advanced the general population is in understanding the benefits and limitations of crypto.
Crypto education raises awareness of crypto scams
The current market in 2021 also laid the foundation for scammers who tried to scam innocent people who are keen to explore the crypto industry. Over $1 billion has been stolen in crypto fraud – roughly one in four reported lost, more than any other payment method.
The best way to fight scammers and spot red-flag projects is to understand how they work to protect yourself at a higher level. For example, newcomers should be taught how to identify a project with ponzinomic models – multi-level marketing schemes – to protect and never share their private keys and seed phrases with anyone. It is important to teach the general public to avoid worthless tokens from projects that do not provide a useful solution or financial service and look more like a hyped up marketing strategy.
Crypto education benefits third world countries
Not everyone can open a bank account — and if you’re a person from a low-income background, it’s worse. This fact is further reflected in third world countries. But with an internet connection, unbanked people can create digital wallets on their phones or computers and start trading cryptocurrencies with individuals around the world.
Some people decide to trade crypto-to-fiat and fiat-to-crypto on peer-to-peer marketplaces, allowing users to exchange their local currency for crypto or US-linked stablecoins and protect themselves against currency devaluation.
In Latin America and other developing countries, many families depend on remittances sent by family members working in first world countries. It is quite expensive to do so with traditional platforms such as Western Union, but here crypto and blockchain can provide cheaper transaction fees and faster settlement times. Only a wallet address is required to receive the money.
Advanced blockchain can also act as a major facilitator of educational opportunities in developing countries, thanks to the technology’s open source code. It is equally crucial for crypto whales and blockchain startups to seek potential investment opportunities and initiate mass blockchain adoption using the same tools for educational purposes.
Related: How Electroneum can help empower the unbanked and those living in poverty in developing countries
Why crypto institutions should care about educating people
Demand and institutional interest in cryptocurrencies exists – but many in the industry have become invested in it while overlooking the importance of providing the average user with an easy way to understand the crypto ecosystem. Crypto education initiatives and mass adoption depend directly on crypto institutions and entrepreneurs. It is not enough to develop a project or a financial service – first of all, people must be taught how to use it. Unfortunately, digital tools and the ability to use blockchain technologies are now available to only a small percentage of the population.
By offering a better educational path for newcomers, they can become more interested in the world of FinTech. Therefore, more people can join the industry by building connections, businesses or investing – whatever it is, and the idea is to make FinTech more accessible to the masses.
