And why you should consider leaving the industry too...Jia Yung Lee explains...
Are you working full-time in Crypto? As someone who has been in the space for close to two years, I think it may be time for you to consider calling it quits for now.
Don’t get me wrong, I still believe Crypto will play a prominent role in shaping many industries, most notably finance. I find that most people can agree on that, apart from the minority do not see a shred of value in Crypto and Blockchain.
However, the main questions are when and at what level will Crypto change our lives?
Crypto die-hards by and large believe it will be within the next 2 years when regulation is clear, financial institutions will see Crypto as a legitimate asset class and a global recession will drive retail investors to invest in Bitcoin as a hedge.
When that happens, the price of Bitcoin will skyrocket to six figures and one of the Blockchain protocols will experience a breakthrough in user adoption.
However, I find that to be too simplistic and even delusional.
As much as I want to see the mass adoption of Crypto, embracing reality is still the first step to producing positive results.
Here are three reasons why I think it is time to leave Crypto, or at the very least for you to tamper your expectations about what Crypto can achieve.
(Most) Crypto Companies Are Not Profitable
Gone are the days where projects could raise millions in a matter of days or even hours through Initial Coin Offerings (ICOs) Guess what these projects have to focus on now?
Surprise, surprise! They have to make a profit.
While it is true that a handful of these projects have a relatively long runway due to successful fundraising efforts from ICOs or funding from Venture Capital, the long term survival of any company is dependent on having a profitable business model.
Not by holding certain ideologies or by having superior technology over the competition.
We have seen many companies in Crypto either closing down or laying off executives, as seen even in big companies such as Consensys and Bitmain. Even Crypto hedge funds that were opened in anticipation of institutional interest were shut down in 2019.
There is a high chance that the Crypto product you are building is likely to fail and even if it does succeed it will take years for the success to come to fruition.
Crypto Is An Echo Chamber
If you have been to at least three big Crypto conferences in your city, you have probably bumped into two or three familiar faces at least twice. Go to ten of such events and you can probably find ten people who you have met before.
That is how small the industry is and unfortunately, we are not seeing new retail investors or talents joining the space. At least, not at a pace that suggests mass adoption is progressing quickly.
In my opinion, this has led to the Crypto space becoming an echo chamber. Here is the definition of an echo chamber according to Wikipedia
In news media, echo chamber is a metaphorical description of a situation in which beliefs are amplified or reinforced by communication and repetition inside a closed system
Crypto Twitter is the perfect example of this definition. Bitcoin maximalists continually post tweets on how Bitcoin will make banking obsolete and the community will support their point under the thread.
Members who disagree are in turn labelled as not being able to see the future of money, among other things. This creates a dangerous situation where the Crypto community is out of touch with reality.
Worse still, we see hardcore supporters of different Blockchain protocols or projects attacking the competitor of these projects, believing that their project provides a perfect solution in their area.
In the end, knowing the flaws of something and dealing with it has and is still the best way to improve.
Until the Crypto community takes feedback from “outsiders” seriously and make efforts to improve the onboarding process of new users, the Crypto community will continue to be an echo chamber.
What is stopping new retail investors from joining the space? Is it due to their perception of Bitcoin? The price volatility? Or simply not knowing where to start?
Once these questions are answered and onboarding becomes easier will mass adoption happen.
Adoption Only From Less Developed Countries
For better or worse, it is human nature to stick to what already works. Unless the current system is massively inefficient or is a strong pain point will users start looking for alternatives.
While Crypto offers an alternative to different industries, arguably the strongest alternative it provides is an alternative to the financial industry.
Currently, it is only in less developed countries where the financial system is flawed to the extent whereby citizens have to look for alternatives.
Citizens in countries such as Venezuela face hyperinflation, making it difficult to afford necessities with each passing day. Hence, despite the price volatility, Bitcoin is seen as a reliable store of value and alternative to the financial system.
Read this article for a better understanding of why Venezuelans view Bitcoin as a credible alternative.
Despite countries such as Japan and Singapore leading the way in regulating Cryptocurrency, developed countries, in general, have lacked a sense of urgency in laying out the rules for the new asset class.
This is because citizens of developed countries are relatively content with the existing financial system. A lack of progress on the regulatory front has ironically hindered the progress of the Crypto market in gaining legitimacy and adoption.
Furthermore, the different set of regulations in each jurisdiction makes global market penetration difficult and costly.
In Conclusion
I do not believe Crypto will take over the banking system as we know it. What it can provide is an alternative to the current financial system. Or at the very least it raises serious questions about the current system for the masses to think about.
As a career, however, I don’t see the industry expanding significantly in the near term. This is why I think it is best to leave the industry for now and for you to consider that as well.
This article by Jia Yung Lee was originally published here: https://medium.com/coinmonks/3-reasons-why-i-am-leaving-crypto-now-59b9e6f44287
Jia Yung Lee
