Crypto Rev Series Q318 — what we need

Rev stands for Review, and Revolution

Custody

Absolutely needed, this would be in the top 3 missing pieces of the landscape. See a dedicated article on the topic here.

Consolidation of the landscape

“Some “cleaning” will be required for many years #cryptocurrencies, in the end, the market will become more stable and more efficient only when most people become a minimum educated on the purpose and economics behind. #educationwillbekey” (Reference of this tweet here).

While posted on Dec 21st of 2017, this still stands true;

The consolidation is and will always be a slow process, but it will be more intense in the early years until the structure and properties of the true solid projects become more popular over time. Many scams and other meaningless sales have been a source of confusion, disgust, and rejection of the market since last year. Still today, we are seeing many long-time projects with no more support behind (developers, community) being exchanged and listed on the market. This money that will eventually get burned, would be better placed supporting projects that are still technically alive, at least. Such consolidation should come first from the exchanges, listing websites, and influential actors.

Education

Instructive materials, communications, and courses need to reach a deeper level of attention. The market will be healthier only when the average participant understands at least the high-level advantages of the technology, the potential challenges, and the basic economics behind an open and transparent market.
We all know a good percentage of buyers at the end of 2017, did not know about the properties of their purchased issuance (marketcap, circulating supply, supply cap, etc..), let alone the rest of the essential information and purpose of it. This is why I don’t use the word “investment” in this situation. It is more like gambling, but I tried to avoid this word too. After all, not everyone is a financially educated mind.

“ The difference between speculating (or throwing your money blindly into something) and investing, is the amount of time you spend researching and performing due diligence.” from CoinCrunch.

But we shall be! That’s what time and disruption did to our grandparents, now using emails, smartphones, WhatsApp, selfies, video filming, social networks, digital music management, and so on.

I should mention that several recent efforts in this direction seem promising, such as Academy, aiming to structure technical courses and develop proper partnerships with universities.
Many educative meetups are taking shape, and several informative associations all around are starting to bring up small 101 sessions about blockchain and crypto economy. It’s all taking shape, we just need more of this, we all need to help. I will be doing my part at the Miami Beach Chamber of Commerce, for a lunch and learn event. Fun.

It seems like we as a whole realized this in 2017, then we have been building on this in 2018, and we should grasp the effective outcome in 2019 or later.

In fact, while the end of 2017 was intense in a way, in terms of hype and attraction, it did allow us to identify the major obstacles of mainstream adoption. It is not surprising (especially after the fact, as always), that 2018 was much of a digestion, reflexion, and conception of the related solutions.

Building from scratch, no more

While experiments are necessary for the early stages of new technologies, an excess of it seems to be counterproductive. We are experiencing exactly this phenomena today in the DLT space.

Every week new projects are created, with a new set of great developers building a new type of blockchain from scratch.

It would be no problem if they build everything with computers only, but we are talking about big teams and human talents for each experiment.

Instead of building on top of technology that is already struggling to be adopted, we are witnessing a constant division and dilution of the overall resources, therefore creating a lack of a potential breakthrough in at least one of them. Can we imagine how far we would be, for example, if all developers were working on Bitcoin and Ethereum improvements?

Developers should be more responsible for the greater good, they should pick projects that have an established purpose and build on it, instead of being greedy with huge amounts of money raising through token sales, our next topic.

Token sales need changes

This is another example of how ridiculous the so-called strategic investment could be, in many cases. From Constellation CEO 1 day after the initial release of tokens:

Soon after token distribution a strategic investor with a large allocation unexpectedly sold their stake causing the dip in value. We had a huge amount of interest during our private sale and we took time vetting and building relationships with our partners. Unfortunately, one specific investor did not make their intentions clear, like the community we are shocked, disappointed, and ultimately feel let down. It’s especially disheartening that someone with the privilege and capital to be an early round investor in Constellation would operate in such a way. The sad reality is this lack of professionalism is all too common in our industry at the moment, something that Constellation as a company is battling to change. The individual in question has been contacted by myself. The reason behind his actions were a result of our refusal to give him early distribution and privileged information on exchange listings. We take this kind of behavior seriously as it is insider trading. We will continue to uphold these standards regardless of whether it puts us at risk from actions like this. We are seeking legal advice on what remedial steps we can take with the individual and will keep you updated on this.

I was gonna go deep on this topic, but then realized that other sources pointed out the problem clearly, so I will save time and do a quick recap of my own instead;

  • Token sales open/fair access: unfortunately this is the big hit, something that was working quite well in the early years, has now become a step back into the old traditional way which is clearly unfair to those with less financial resources (Non-accredited individuals saw the door closed for most quality projects). Part of it is due to the mix of regulation taking place. But part of it is also due to the greed and entry of traditional mentality folks not understanding or embracing the purpose of the market. As I said in my letter of Q1 2018, I still think fairness will come back soon. In short here, let’s please have less private, greater fairness/access, and better distribution.
  • Token sales authentic evaluations: most aggregators and evaluators of token sales are rigged, paid, or financially subjective. There is a need of specialized associations, acting as an independent third party and on demand, to objectively evaluate and provide details about a specific project.
    We can usually find many reviews on the popular upcoming sales, the problem remains for the small to medium projects from a reputation perspective. Some of them are great, they just don’t have the marketing bootstrap to get far. Many of them are not so great. Nevertheless, the distinction is gold. The majority of upcoming sales with less popular names will only increase over time, percentage-wise. The demand for fair evaluation on the spot will do so as well.
  • Token sales long-term value capture/accretion: both founders and investors need to focus more on the future value and expectations of their tokens. Before 2018, it was a ride in the wild. As the market matures, it needs to be more coherent, and in line with the historical data forming. Creation of value clearly does not equal the capture of value. Yet capture of value will clearly take another shape in this new era of open networks (except for the security tokens most likely).
    So how do the founders plan for their token to retain value over time, challenges, and all the different scenarios? On the distinction of the different types of tokens and their possible classification in the capture value line, I recommend reading this.

See all Q318 series:

This is no financial advice nor an endorsement to any specific project. If interested to discuss further, feel free to reach out.

my crypto background, twitter, archives, atsala, tokenpot, tokenpub

DLT/DeFi Research