Three common (and untrue) narratives about cryptocurrency and Web3
By: Drew Simon, Founder, Crypto Altruism
Through my work consulting with non-profit organizations around the world, there is often hesitancy from these organizations to get involved in the burgeoning world of Web3. There are many reasons why this may be the case, including that non-profits tend to be more risk-averse, but it often boils down to the fact that there is still a certain stigma that exists around Web3. Many are worried that, by accepting cryptocurrency donations, or engaging in Web3 through other means, that they will alienate their traditional donor base, or that it will harm their reputational risk.
Unfortunately, the prevailing narratives around Web3 are still, very often, quite negative, and for those that aren’t deeply involved in Web3, these may be the only narratives they are exposed to. This is one of the reasons I started Crypto Altruism – to help shift this narrative, because the truth of the matter is that Web3 is a force for good.
So, in this blog post, I want to acknowledge, and challenge, three of these prevailing narratives that are preventing many from seeing the amazing potential of Web3 to help build a better world.
1. Cryptocurrency is terrible for the environment
Probably the most common criticism of cryptocurrency is that it is terrible for the environment. This criticism obviously aligns most closely with blockchains operating on a proof-of-work protocol that is certainly more energy intensive. Although the argument could certainly be made that Bitcoin mining is far-less energy intensive than the traditional financial system, it is still important to acknowledge this criticism and work towards bringing more sustainable practices into Bitcoin mining.
So, yes, Bitcoin is energy intensive, but Bitcoin is also only one cryptocurrency among thousands, with it accounting for about 40% of the total cryptocurrency market cap at the time of writing. However, for those not involved in the cryptocurrency space, Bitcoin and cryptocurrency are often viewed as synonymous.
The fact of the matter is, the statement “cryptocurrency is terrible for the environment” is patently false. Many blockchains, such as Ethereum, Solana, Algorand, and Celo, among many others, are built on proof-of-stake protocols, which are far less energy intensive. In September 2022, for example, Ethereum, the world’s second largest cryptocurrency by market cap, made the transition from proof-of-work to proof-of-stake, reducing its energy consumption by approximately 99.9%. Cryptocurrencies built on proof-of-stake are highly energy efficient, especially when compared to the traditional financial system.
That is, the traditional financial system that has hundreds of thousands of bank branches and an estimated 3.5 million ATMs around the world. Then there are the head offices in towering skyscrapers and all the background infrastructure, such as data centres, that keep the financial networks running. In fact, one study estimated that the total electricity consumption of the global banking system is a whopping 263 TWh per year.
Furthermore, this criticism doesn’t account for the myriad ways that blockchain and cryptocurrency can be used to help fight climate change. In fact, the United Nations themselves released an article recognizing this in stating:
“The negative environmental impact of cryptocurrencies such as Bitcoin has been widely covered in the press in recent weeks and months, and their volatility has also been flagged as a cause for concern. Nevertheless, the UN believes that blockchain, the technology lying behind these online currencies, could be of great benefit to those fighting the climate crisis, and help bring about a more sustainable global economy.”
One of the key ways blockchain can be used to combat climate change can be found in the Regenerative Finance, or ReFi, movement. ReFi, which is based on the principles of regenerative economics, makes use of blockchain technology to incentivize sustainable actions that help build a thriving and prosperous world. One example of ReFi in action is KlimaDAO, which has created a cryptocurrency backed by carbon reduction or removal that, to date, has resulted in over 17 million tones of carbon being absorbed, the equivalent of nearly 515 million litres of gasoline. We’ve also seen the tokenization of rainforests as a tool to protect them from deforestation, the use of blockchain to monitor reforestation efforts, and much more.
The point is, not only is the statement “cryptocurrency is terrible for the environment” misleading at best, but cryptocurrency and the underlying technology behind it have many innovative use cases that can, and should, play an essential role in combatting climate change.
2. Crypto is made up only of a shadowy, faceless group of super-coders
Another reason that non-profits and changemakers may be hesitant to get involved in Web3 is because they perceive the technology to be intimidating. To take it to one extreme, Senator Elizabeth Warren famously remarked “instead of leaving our financial system at the whims of giant banks, crypto puts the system at the whims of some shadowy, faceless group of super-coders.” This is indicative of a much larger stigma that Web3 technology is only used by basement-dwelling, nefarious super coders.
Now, of course those working in Web3 know that this couldn’t be further from the truth, and that the Web3 community is made up of talent individuals from all backgrounds, whether it be computer scientists, economists, artists, lawyers, activists, you name it, all of whom come with varying technological skill sets. I for one have a background in education and non-profit management, and I can say with confidence that I am not a super-coder.
The fact is, you do not need to be a super-coder, or to even have a basic knowledge in coding, to succeed in Web3. This is why a whopping one billion people around the world have used cryptocurrency exchanges, with over 300 million owning crypto.
This is also why we’re seeing thousands of non-profit organizations around the world accepting cryptocurrency donations, including massive organizations such as UNICEF, Save the Children, United Way, and the American Cancer Society. I can say with some level of certainty that those working at these organizations are not shadowy super-coders.
3. There is no diversity in the crypto/blockchain space
One of the most common criticisms of Web3 is that it is dominated by so called “crypto bros”, a group of hyper-masculine bros only interested in making a quick buck through speculation. But as those of us working in Web3 know, there is far more to the community than this single subset of the population. That being said, there is no point denying that Web3 is still dominated by males, many of whom are from wealthy backgrounds, and that more can and should be done to build inclusion in Web3.
Thankfully, there are projects and collectives looking to address this including Women of Web3, Web3 Women In Science, and the Women in Web3 conference, which was recently hosted in Miami, to name a few.
We also saw the launch of NFT projects with the goal of building inclusion in Web3, including the Metapride Land Charity Collection, which launched during pride month, and World of Women, which released its second collection in March of 2022.
There are hundreds of projects and collectives specifically focused on building inclusion in Web3, many of whom we cover in podcast episodes and blog posts on this topic. There is even a 501c3 charitable organization, Diversity in Blockchain, whose very mission is to increase diversity in the space. So, although it’s not perfect and there is a long way to go, there are a lot of amazing people who have made it their mission to learn from the mistakes of Web2 and do everything in their power to make Web3 as inclusive and equitable as possible.
It is also important to note just how global the Web3 community is. In fact, according to the 2022 Chainalysis Global Crypto Adoption Index, the top twenty countries for cryptocurrency adoption include representation from all continents except Oceania (and of course Antarctica), with the top five countries being Vietnam, the Philippines, Ukraine, India, and the United States.
Conclusion
For those that are hesitant to engage with Web3 because of the preconceived narratives out there, I encourage you to dig a bit deeper, join a Discord server, follow an interesting project on Twitter, and I promise that your opinion will quickly change. When I first Founded Crypto Altruism, it was because I was seeing a massive disconnect between the narratives in the media and what was actually happening on the ground, that of course being the thousands of talented people working together and using the power of Web3 to build a better world. I encourage you to join the movement, because no matter where you come from, or what your skillset, there is a place for you.
If you are interested in learning more about how to get involved in Web3, don’t hesitate to reach out via our contact form!
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