Columnist

Lack of regulation and true governance are making cryptocurrency an easy target

PRESTON JUNGER: "As long as more innovators continue to have a purpose and make sure the purpose is aligned with healthy passions, we - the people of blockchain - will help the good keep growing"

I’m inspired to build and grow emerging technologies, that on a large scale, enrich lives and experiences. This motivation to make the world better, is why I invested nearly a decade helping Yelp (once a San Francisco new tech start-up) grow to become the top review and social platform for consumers and businesses.

Making the world better is the same motivation I have for being an advocate for honesty, legitimacy and sustainability in blockchain.

Honesty, legitimacy and sustainability matter

These things matter to me, and they should matter to anyone who is building a blockchain business or non-blockchain application or startup.

Honesty is something that has been lacking in the business and venture-backed start-up world for a while. Nowadays, as a business owner, it is now more important than ever to be honest with your users, supporters and customers around your purpose and intentions for the business. With increased competition and similar products and services, how you represent yourself and your technology matters most.

Legitimacy, is the actualisation that your company stands for something real and is not a facade or scam. Other trusted organisations or people have validated your business, which makes it more likely that you’re running a legitimate business. The sustainability factor means you’re building a product, service or solution that has a strong foundation, infrastructure and community to sustain outside of a short period of time (you’re not a pop-up-shop trying to make money today and be gone tomorrow).

What projects are you working on?

In the past year that question – “what projects are you working on?” – has become commonplace in the crypto world. It is completely acceptable for leaders in this emerging space to be working on multiple “revolutionary”, “game-changing”, or “redefining” projects at the same time. One of the many self-proclaimed blockchain leaders claims to be an adviser to hundreds of blockchain companies. Is it really possible to work with 200 companies that are all honest, legitimate and sustainable for the future? The answer is simply no, that is impossible and likely 99% of those businesses will not be around long-term.

It’s also important to note, that we can’t really verify that this global expert in cryptocurrencies, blockchain wizard, ICO master, ITO guru and god-knows-what else leader of pumping herself/himself up is REALLY working on with any of these companies (and if the companies themselves are real or phoney).

It is time to limit the number of blockchain projects you’re working on. If you have the opportunity to focus on one or a few select blockchain startups that you’re passionate about, you will likely care about that project or those few projects’ long-term sustainability more and be able to fend off the scammers before they steal your time (and money).

Why are there so many scammers in crypto?

Victor Lustig (the man who sold the Eiffel Tower), Frank Abagnale (Catch Me If You Can), Charles Ponzi (“the Ponzi scheme”), Bernie Madoff, WorldCom, Lehman Brothers, Enron… the list goes on and they all have something in common. They were all involved in a scam or fraud and were committing these crimes in search of as much money as they could possibly get away with within their respective realm.

Blockchain and crypto is the new realm in that respect. This is due to the large sums of currency being pumped into crypto and the perception that cryptocurrency is an easy target because of the lack of regulation or true governance by anyone who can thwart or stop scammers. In time, the more widespread crypto and blockchain become, the less impact these imposters will have.

The good is growing

With the emergence of blockchain technology many barriers have been removed from people that formerly were underserved, disadvantaged or discriminated against. These people are now able to create companies driven by purpose and prosperity, rooted in crypto or blockchain.

Good people are driving great projects. Educated and socially-conscious leaders are fighting against evil, greed and negativity. As long as more innovators continue to have a purpose and make sure the purpose is aligned with healthy passions, we – the people of blockchain – will help the good keep growing.

What can you do?

In order to prevail on the blockchain, we need to get back to basics and use our intuition and business experience on top of challenging ourselves to keep learning about decentralized technologies, the blockchain and evolution of cryptocurrencies.

It is imperative to recruit good people with expertise and unique perspectives to help move technology forward. If you see something, say something (as it pertains to exposing frauds or scammers). If someone seems too good to be true, they likely are. If a new blockchain project looks too good to be real and makes crazy bold provocative claims without any real signs of business, they are probably a fake (or have malintentions).

A solid team should be well-rounded with diverse backgrounds and areas of expertise. Let’s make sure we’re not trying to re-invent the wheel when it comes to blockchain or crypto startups. Things like building communities, raising capital, and developing technologies are areas that many people (even non-blockchain leaders) can help you with.

I know several venture-backed technologists and executives who have been turned away by cryptocurrency founders because they didn’t have enough “blockchain knowledge”. Let’s be honest, if you’re building a cryptocurrency, you’d probably be interested in Steve Jobs’ advice or curious to know what Elon Musk thinks.

In the future…

In my column, I’ll explore emerging technologies (like blockchain, distributed ledgers and cryptocurrency) that are changing the world for the better and improving our lives. I will also highlight the challenges and solutions that all startups and founders face, including building the product, raising capital, growing a community, and most importantly what it takes to create a sales engine for your business. I will also interview some founders, investors and leaders you won’t want to miss.

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