My new marketing column is live in The Drum:
Cryptocurrencies started to gain popularity long before last week’s release of a ‘shill price list’ for influencer promotion. In his new column, Samuel Scott looks at the history of crypto marketing and interviews people including Brian Shuster, who invented pop-up banner ads in the 1990s before later creating the Utherverse metaverse platform and a planned Uther Coin.
During the Great Depression in the 1930s, many people no longer trusted banks and buried their savings in the ground. After the Great Recession in the late 2000s, some felt the same way and bought Bitcoin. Time will tell if there is any difference.
Roughly 2,000 years ago, Publilius Syrus wrote in ancient Rome that “everything is worth what its purchaser will pay for it.” Cryptocurrency enthusiasts use such statements to prove that those such as Bitcoin have real value – if people buy and use them – compared to government-issued ‘fiat’ currencies that are supposedly not ‘backed’ by anything.
Of course, Syrus was correct on a basic level. But the crypto community forgets the reason that the demand for US dollars is so high throughout the world.
According to the US Federal Reserve, the bulk of global dollar reserves – most foreign currency holdings in the world are in US dollars – are in the form of US Treasury securities (Treasury Bills, Bonds and Notes). They have low interest rates and are seen as some of the safest investments. Why?
While the US dollar did leave the gold standard in 1971, the currency is still backed by the American government and the fact that it always pays its debts. That is the intrinsic value of the US dollar. Cryptocurrencies do not have anything like that. They are forms of gambling, not actual stable mediums of exchange.
Marketing, in part, is about communicating value to a target audience. Now, imagine doing that for something that literally has no value at all – at least at the beginning. That is cryptocurrency. Here is how it was done.