The biggest event in crypto, Bitcoin 2022, kicked off yesterday in Miami, Florida. The event brings together investors, practitioners, influencers, and other major participants in the crypto ecosystem, and is intended to unite all who are involved in the industry for four days of learning, networking, and collaboration. The core group, known as HODLers (an acronym for the majority of Bitcoin owners who maintain it as a long-term investment, and therefore are “Holding On for Dear Life”) has had a lot to say about where this industry is going and how it’s going to handle things like growth, regulation, and fraud.
Kevin O’Leary: Cryptocurrency as the 12th Sector of the S&P
One of the most anticipated speakers of the first day was Kevin O’Leary (aka “Mr. Wonderful”), the well-known entrepreneur, Shark Tank investor, and crypto advocate. Within seconds, Mr. Wonderful was making the point that Bitcoin’s ability to drive unique innovation in financial services is going to cause it to become the twelfth sector of the Standard & Poor’s (S&P).
O’Leary went on to talk about the legislation sponsored by Senator Cynthia Lummis that aims to put controls around the perceived “Wild West” lawlessness that exists to some degree within the crypto space. Senator Lummis’ proposal would provide regulatory clarity and offer a framework to allow legitimate crypto initiatives to flourish under rules similar to what exists today for securities and commodities. While the subject of regulation makes some in the industry shudder, O’Leary made clear to the entrepreneurs and professionals in the audience that they want to support this regulation because it will benefit them in the way of exploding capital and profit gains based on business growth.
What was notably absent from O’Leary’s keynote was any mention of the “investment” angle that typically is the focus of Bitcoin ownership. Instead, the discussion shifted to how Bitcoin is enabling innovation in financial services to solve distinct, newer types of economic problems experienced by communities and economies.
Enabling a More Diverse, Next Generation of Bitcoin Users at Scale
The theme about broadening the diversity of Bitcoin ownership was echoed in a panel discussion later in the day. Entitled “Onboarding Retail,” it refers to platforms that sign up individuals, as opposed to institutional cryptocurrency users. Panel members included Aparna Chennapragada, chief product officer at Robinhood; Tom Pageler, CEO at Prime Trust; Tushar Nadkarni, chief growth and product officer at Celsius; and Socure’s very own CEO, Johnny Ayers. The panel was moderated by Michael Bodley, managing editor of Blockworks.
The key question posed by Bodley: how do we onboard the next generation of 100 million, 200 million, or a billion users? (The backstory here is that the 100th million cryptocurrency user signed up in January, 2021, a feat that took more than a decade. It was then predicted that the 200th million purchaser signed up in June, 2021, or only four months later.)
Pageler believes the industry is at an inflection point, a claim supported by President Biden’s recent executive order to legitimize digital assets. Pageler is confident the industry will benefit from better regulatory clarity and become stronger than the traditional global payments system because the cryptocurrency ecosystem is faster, less expensive, and imposes less friction.
Chennapragada adds that Robinhood may already be seeing that inflection point play out as 50% of their users are new to the cryptocurrency space. She was quick to add that those new customers may be a result of their focus on education communicated in a digestible format explaining how cryptocurrency benefits this next generation.
A closer look at Bitcoin user demographics reveals that it has largely been the domain of white males with disposable funds to invest–so it naturally follows that growth equates to enabling significantly more gender and racial diversity, and people who need the ecosystem to solve other types of financial problems, like utilizing banking services for the first time or accessing loans at favorable rates. One noteworthy example given during the panel discussion talked about how college graduates who are saddled with student loans are borrowing against Bitcoin funds at around a one percent interest rate to pay off those loans, while retaining their Bitcoin which continues to grow at five times that rate.
Rapid adoption demonstrates the potential of onboarding many more new users moving forward, however Ayers points out that he has seen some applicants having to wait a week or two to open an account. He points out that Socure is solving for identity verification by applying predictive analytics to physical documents and PII, whereas the traditional way of verifying individuals through credit bureaus equates to 45 million Americans being credit invisible, explaining the poor onboarding experience.
Utilizing machine learning technology, Socure is able to verify 60% more 13- to 18-year-olds and 80% more people in non-white groups, over legacy vendors. These numbers demonstrate the important role that Socure is playing in opening the cryptocurrency ecosystem up to larger, more diverse populations.
Uniting the Bitcoin Community to Serve a Greater Purpose
Greater diversity is often correlated with better financial performance. For those invested in the growth of the Bitcoin ecosystem, it’s even more important. They hold the power of ensuring that cryptocurrency and blockchain technology is opened to a broader population, which ultimately will result in serving disadvantaged communities, generating stronger financial inclusion, and creating greater wealth for everyone.
Socure’s Cryptocurrency Solution
Using Socure, crypto platforms are driving growth at scale with passive and highly-accurate identity verification and fraud prediction to confidently onboard new customers, including all ages and demographics, while meeting compliance mandates. An automatic, frictionless fraud check at account opening, account update, and transaction allows more good customers to accelerate time-to-funding, trading, and storing crypto, increasing customer lifetime value while preventing bad actors from entering the ecosystem. Only those users who appear risky are stepped up to an ID document verification check. Reducing reliance on document verification significantly reduces manual reviews, ensuring more users complete the account opening process and begin transacting in real time.
Socure experts will be at Bitcoin 2022, located at the Miami Beach Convention Center, until this Saturday, April 9th. Visit us at Booth #1041. Or, to learn more about how Socure can transform your crypto onboarding experience, reach out to us here.
If you’d like to read Socure’s Digital Identity Financial Fairness and Inclusion Report that Johnny Ayers referenced during the Industry Day panel discussion, download it here.
Brenda Gilpatrick is senior director of product marketing at Socure. She helps to lead go-to-market strategies for Predictive DocV. Previously, she was an independent consultant in the payments and fintech industry, working with companies of all sizes on marketing, technology, operations, and business development initiatives.
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