I created a Cryptocurrency and here’s what I learned
Last weekend I followed this simple tutorial to create my own Cryptocurrency. I’m an ex-programmer so it wasn’t hard. Here’s what I learned …
Most ICOs are Ponzi Schemes
Creating a blockchain and a cryptocurrency took me about 90 minutes. It’s not hard — in fact it was a little too easy.
The reality is that cryptocurrency and blockchain, the technological innovation, isn’t applicable to most startup ideas. Yes, there are truly transformational ideas that are being launched on the blockchain. Yes, blockchain and crypto are going to fundamentally change the world. Yes, most of the ICOs you hear about are marketing hype, designed to con good folks out of their money.
Here’s a concrete example in my space (Education Technology):
The BitDegree platform will offer students the best online courses with a clear and transparent blockchain based reward system and achievement tracking. It is also a unique tool for businesses to recruit tech talent and shape global education to their needs. Think of it as Coursera and HackerRank merged together, powered by the decentralized blockchain technology.
BitDegree raised over $22,000,000 in their ICO and they have zero revenue. It’s basically Treehouse but instead of awarding Points when people learn, they earn “BitDegree tokens”. Employers are supposed to buy these tokens in order to get the right to hire you. Sounds neat right?
Not to sound all “grumpy old man” about it, but teaching people how to code so they can get real jobs, is a little harder than just giving them a cryptocurrency as they learn. I’ve read their whole whitepaper and there’s nothing truly innovative happening here.
Employers don’t care about “BitDegree tokens” or Treehouse Points. That’s exactly the point of why most of these ICOs are ponzi schemes. Saying that your using blockchain and cryptocurrency to solve a problem, doesn’t mean anything. The proof is in the years of hard work creating something of true value to employers and learners, and then building a profitable business on top of that.
Steer clear of 99% of these ICOs, they’re just marketing FOMO.
And if anyone tries to sell you on creating a “successful ICO” in two weeks, run away.