Synergy Beats Tribalism
If you only recently joined crypto twitter (X), you may already have witnessed the bizarre concept of 'tribalism'. It's usually sponsored by owners of large wallets in one network or another.
The sales pitch is usually emotional in nature, using peer pressure to force conformance to a social standard where the proponent's coin-de-jure is the only acceptable investment choice. The implication in this tribalism is that the only way for the world to move forward is to use (only) one crypto coin; the coin that, coincidentally, the proponent owns. 🙄
This is what we mean by 'tribalism' ... and I'll provide the most egregious example.
Dark Tribalism Against XRP
In the early days of crypto, there was one main site where all crypto geeks congregated; Bitcointalk.
And it was on that forum, in the early days, when an unknown person(s) offered a bribe of Bitcoin to anybody that would assist in casting shade on XRP. Specifically, to call XRP a 'scam'.
At that time, the owners of the biggest Bitcoin bags were laser-focused in protecting their market dominance, and a minority of these black-budget-insiders would descend into disreputable antics that only furthered the image of crypto as a wild west, amoral group of criminal-adjacent tech fans. Contemporary with the Ross Ulbricht events, crypto was still suffering from its early image as a way for those on the edge of society to launder money.
And Bitcoin tribalism made it worse.
Peer Pressure
Tribalism does not depend on a rational exposition of facts to support its power; quite the opposite.
It depends on tried-and-true mass mind control techniques, and the primary one is peer pressure.
If your online community of friends and acquaintances all demand unyielding conformance to the group, and then you see them practice 'shunning' on any member that persists in contrarian viewpoints, it's a good bet that you're seeing blind tribalism in action.
Steel Man: "All Your Liquidity Belong To Us"
On the surface, in the early stages of network adoption, this may seem like a group behavior that gets financial results.
All Your Liquidity Belong To Us
After all, if liquidity (the collective financial capital) of the network is thin to begin with, those that hold large sums of the native token will not want to hear about 'other coins' or networks. Especially if those networks are seen to be competitors to their own preferred cryptocurrency.
And perhaps at certain points, the channeling of the lion's share of the liquidity to their own prized bags may seem like a win.
And in fact, there is a measurable amount that may be preserved in liquidity from this tribalism. It is this amount that forms the best 'steel man' argument for tribalism. If the liquidity in the tribal members' preferred network is preserved from leaving for a competitor chain, then perhaps it seems like wisdom to the people that promote it.
This is narrow thinking - and incorrect!
Synergy & Network Effects
What is a 'network effect'?
The simplest example could be thought of as two towns, fifty miles away from each other. One town grows apples. The other town has the best dairy cows.
But only one town has a nice open-air market for selling its wares; the apple town.
If the apple town restricts all of its venders to only residents of the apple town, then they are missing out on additional vendors from the town with the dairy cows. If they instead opt to interact with the dairy cow town, they will multiply the number of vendors at the open-air market, creating more value for everybody.
Network Effect
The same could be said of crypto communities that are comprised of people that believe in multiple projects, rather than just one.
Parts of the concept should be easy to understand. If you have two groups, each with ten people, and then you combine the groups, you now have a group with twenty people. But it's much more than a mathematical equivalence. In the case of a network effect, each group is much stronger because of the pairing.
This is why some companies 'acquire' other companies ... the resulting company may be much more valuable than the sum of its parts.
Synergy Examples
Some hard-core tribalists may be reading this and thinking, "well, that's all well and good on paper, but where are some crypto examples instead of theory?"
Okay ... let's talk crypto.
Flare
FLR fans and XRP fans are probably one of the largest cross-over groups in crypto, because of many reasons, including the multi-chain air-drop of Flare's native token.
Instead of looking at Flare as a threat to XRP, many people in the XRP community rightfully saw past this paper-thin concern voiced by a loud-but-small minority of influencers. Instead, they opted to form a larger community, thereby increasing the value of both XRP and FLR groups with this 'network effect'.
And now, years later, the vision of XRP staking & defi applications on the Flare network is becoming more well-defined.
Tokens
One of the main reasons for both Solana's and XRP's popularity in the past two years has been the increase in the number of user-issued tokens on both chains.
Many of these are considered 'meme' coins.
While I do not personally gamble on meme coins, it's important to acknowledge that without these new sub-networks of issued tokens, the parent chains' communities would not be as large ... by a wide margin.
'Win-Win' ... Wins
The head of the Inclusive Financial Technology Foundation (InFTF) contrasted crypto's early - and present-day - tribalism to the nuanced opinions normally found in traditional finance:
"It’s not like if you buy the stock of one company, you want the other company to die ..."
In the case of the InFTF, their preferred blockchain network is Xahau. Xahau is, in simplest terms, a 'smart contract' - enabled version of the XRP Ledger. It is relatively new, and adds synergistic and network effects to the larger set of 'XRP Community' chains, projects, and networks. In addition, many fans - including me - see a powerful grouping of complimentary functionality among the various tokens and their technology.
The important point to remember: If you're only focused on one chain, it can be challenging to think in terms of synergy and network effects. But ... they are very real, and more powerful than blind tribalism.
X | X>
Sources
https://bitcointalk.org/index.php?topic=212730.0
https://www.wired.com/2015/04/silk-road-1/
https://flare.network/news/tde-faqs
https://dailycoin.com/memecoin-mania-hits-xrp-ledger-70-tokens-debut-in-one-week/
https://www.coinglass.com/learn/why-solana-en
Quote from Head of InFTF via X
