Is the Blockchain Industry a Joke?
I recently read this post I Worked Full Time in Crypto for Two Years and Didn’t Really Like What I Saw and if you're in the blockchain industry, I recommend you give it a read. It's a 21 minute read, but it's important.
No, for real. Go give it a read and come back.
Why? Because there's a lot of bullshit in this industry. The author points out much of it. In many ways, being in the blockchain industry is like being in a cult. You've convinced yourself you're part of something really, really important that will change the world, but people outside your little bubble don't have a clue what you're talking about, nor do they care.
In my opinion, the author of this post is going through the process of disconnecting from a cult. You have to demonize it completely in order to detach. You have to convince yourself it was evil and wrong in order to walk away. That's understandable and whether or not his critiques are fully accurate or represent the whole industry, they do provide a mirror for this industry to better know itself.
As the managing director for FIO, someone passionate about blockchain since the beginning of 2013, and someone who sold their business 5 years later to focus fully on blockchain projects, I drank the coolaid. I'm all in. Just as I believed in 2013, I think this movement is more disruptive than the Internet. I still remember reading this post by Rick Falkvinge for the first time when BTC was around $40. I believed it. I still do, though I think that value will be spread out accross multiple competing currencies.
So back to the article by Vanalli (Matt). He worked at Liquid exchange during the 2017 crazy days of ICOs. I'm sure he saw firsthand some of the most ridiculous projects raising ridiculous money. Maybe there are some parrallels to be made there with the dot com bubble in 2000. I remember working for a startup then and how they wanted me to quit college and keep working with them because their project was going to be huge! Yeah, many similarities indeed.
He rightly describes a number of hopeless projects that wasted money and added no value. His critique of the usability is spot on, not unlike the early Internet only used by hardcore geeks and academics. Let's dive into some quotes, as a fellow crypto cult member.
they end up creating solutions for problems that don’t exist
That's not far off for many projects.
But, when he says "Crypto Communities Are Cesspits" well, that's where my personal experience diverges from his. Granted, he's not wrong about many projects which "entice" people into their Telegrams with "shitty bounties, meme contests and quizzes" but he's also missing what a real community is.
But at some point the relationship between project and community falls apart. It can happen before the ICO. It can happen a month after, a year, sometimes two years, but inevitably, with any crypto project and community, it will go to shit. Why? Because there is no real link between the community and the project. It’s all built on bullshit.
If there was no relationship to the project, then it wasn't a real community.
I've lived through this, to some degree, with eosDAC. I was part of an early group that came onboard right as the airdrop on EOS holders took place in April of 2018. There was plenty of excitement about being a community-owned EOS block producer and DAC enabler, but I also remember what it was like a year or so later when some members of the token holder community got upset about token price volatility. Even though there was no ICO, just an airdrop of free tokens, some speculators got involved and things got weird. They didn't understand what we were building, and it started to become clear, some of them didn't care.
The only thing the community is really interested in is the price of the token. They couldn’t give a shit about the tech.
Again though, if that's the case, it's not really a community. eosDAC still lives on today and work is still being done to launch the DAC Factory and develop tools to enable easy to use Decentralized Autonomous Communities for the EOS community. Yes, it can be frustrating and discouraging at times, but we're still here doing the work. If you think corporations and governments and non-profits are just fine the way they are, then wait until we finish and DACs and DAOs become commonplace where you can work collectively with others who share your goals in transparency and freedom.
Some community members will eventually realise the fallacy of this attachment and begin to understand that crypto is a place to make money as a trader, and that to do so you really need to become project agnostic. Then, it doesn’t matter what token you buy, so long as there is a short term upside.
I understand this perspective, and it is a common mindset in trading groups I've seen. No one cares about the fundamentals of a project because they just want to see the token price go up and stack sats (Satoshi's, or the lowest unit of a bitcoin, for non-cult members). The thing is, no one cares... until they do.
Right now people are starting to realize how screwed up our social media infrastructure is. First they felt "woke" because they turned off their TVs and stopped reading "mainstream news" only to get their information from the social feed they control and curate. Unfortunately, opaque algorithms have taken over. Censorship is out of control and that following you thought you built can be taken from you in a moment because you don't own the land, you're just renting it at the cost of your data because you are the product.
That's when people start caring about solutions like Hive. That's a real community. That's a permission-less platform where you can't get censored. Sure someone may disagree with how you use the platform, flag you, or even put you on a naughty user list, but they can't prevent you from posting. No government or corporation can silence you if they don't like what you have to say. If you have any doubts about the depth of the Hive community, follow the story of how Steem became Hive when it was attacked by Justin Sun (yes, the same Justin Sun who gets ripped apart by the author). I didn't realize it at first, but the author actually linked to one of my Tweets while rightly exposing Justin for what he is.
Now back to the quotes about failed projects and how it hurts their "communities":
they’ve completely run out of money (the curse of running a company with no revenue streams).
This, I think, is the core of why so many blockchain companies fail. They aren't even companies. They are hobbies. I wrote about this 3 years ago Are You Building a Business or a Hobby?. If you're not creating revenue which exceeds your expenses to create profit, then you most likely have a hobby. This is true for "tech bros" and "crypto bros" alike.
Yet despite the best efforts of influencers, crypto mass adoption isn’t going to come from another tutorial teaching people how to manage their own private keys. Mass adoption comes when we have products and services that people can use and that make their lives easier without even knowing about crypto or blockchain.
This, I think, is one of the most valuable points made in the article. Cryptocurrency is really hard to use. The user experience is so bad that mass adoption and all my pontificating about competing currencies disrupting the State or the freedom and autonomy created by DACs and DAOs goes nowhere. That's why I've been working with the FIO Protocol. Until we fix the user experience of cryptocurrency, then the blockchain industry will never create products and services for mass adoption which actually improve peoples' lives.
Unlike many projects the author describes, we've actually shipped something real. See for yourself:
Now as to how cryptocurrency is covered in the news...
Crypto is one of the most poorly covered sectors I’ve ever seen. The standard of crypto journalism is so terrible that I wouldn’t even call it journalism.
I have to admit, there have been many times where this is an accurate statement. At the same time, having been interviewed by CoinDesk and Cointelegraph (here and here) recently regarding the Steem drama, I have to say they can also get things right sometimes.
crypto isn’t a topic of widespread interest.
As much as we like to think we're changing the world, there's also some truth to this because we're still very early into understanding what opportunities digital scarcity and programmable value will create for humanity.
Example using Google search results numbers
Cryptocurrency
About 79,300,000 results (0.68 seconds)
Money
About 4,300,000,000 results (0.69 seconds)
Okay. We have a long way to go. Sucks to be outdone by stuff like this:
Lady Gaga
About 204,000,000 results (0.85 seconds)
Kardashian
About 198,000,000 results (0.96 seconds)
But at least people are interested in bitcoin, right?
bitcoin
About 481,000,000 results (0.73 seconds)
Ultimately, I appreciate this take down of an industry that needs a bit more self-reflection. An industry I love and have committed significant time and resources to. You may wonder why I care so much? Because doing the same thing over and over again and expecting a different result is insane. Distributed Ledger Technology, blockchains, and cryptocurrency represent a new paradigm of distributed, global, non-violent consensus. That's a tool we've never had before, and I'm still hopefully we can use it for good and not just moon lambos.
