Cryptocurrency is in a Downward Spiral: Will a Phoenix Rise?
by Dane Keller Rutledge
November 29, 2018
An honorable and resourceful digital assets ecosystem (DAE) must distinguish itself from cryptocurrency frauds and failures.
Viewing the cryptocurrency marketplace as it nears the end of 2018, the total market cap has decreased dramatically during the year. The popularity of so-called initial coin offerings (ICOs) has all but disappeared. The spectacularly successful sales campaigns of Bitcoin alternatives such as Ethereum and EOS are, in relative terms, ancient history. The market prices of leading cryptocurrencies have been decimated.
As 2019 approaches, any fresh entrant into the mosh pit of digital assets startups must look to distance itself from a landscape cluttered with the carcasses of failed scam coins precipitously disintegrating since the total cryptocurrency market cap reached its all-time largest price bubble late in the fourth quarter of 2017.
Amid the current environment of fear, uncertainty, and doubt (FUD), a fledgling digital assets ecosystem (DAE) must be honorable and resourceful. Potential financial supporters are increasingly adept at sniffing out nonsense. Many clonal fraud coins trumpeting so-called market-based valuations and guarantees of profit or gain have been rightly consigned to the trash heap and are properly under scrutiny by regulatory authorities such as the US Securities and Exchange Commission (SEC), which exists to detect and discipline violations of laws protective of the public trust.
Integrity starts with honesty not puffery. An honorable and resourceful enterprise parsing the current dynamics in the cryptocurrency-blockchain space has an opportunity to distinguish itself from the detritus by formulating parameters instituting consumer protections inspired by regulatory sensibilities while at the same time inculcating customer-centric technologies engineered to enrich user experience.
Regarding protections, certainly all passive financial supporters ought to be fully informed and adequately warned. If a public sale is under consideration, then the digital assets ecosystem ought to voluntarily impose "know your customer/anti-money laundering" (KYC/AML) requirements on would-be purchasers of its native digital asset so as to prevent infiltration by individuals with nefarious intentions. If management perceives particular nations' statutes to be too uncertain or too complicated or too expensive to to be followed strictly, then instead it may consider following the simple wisdom of forbidding sales to persons associated with currently challenging regulatory jurisdictions.
Technological advancements can be very expensive to develop. Especially if startup capital is scarce, it is important in early development stages for a digital assets ecosystem to have at least a comprehensive plan, a strong design, financial accountability, and the rudiments of a competent team. Naturally, it is highly attractive to have developed something useful, what is commonly known as a minimum viable product, an MVP, but all too often such a single point of pride is also a calamitous single point of failure. And function, by definition, is more a matter of form than of substance. Just because a product may work doesn't necessarily mean it's desirable.
The literature intimates that a minimum desirable product, an MDP, takes the next step beyond the mere functionality of an MVP by also focusing on a valuable and enriching user experience, which, in my opinion, is the single most important predicate in delivering digital assets solutions to the mainstream population. If a digital assets ecosystem is to survive and evolve for human betterment, then it must serve its users by providing them with comprehensive tools to form a mainstream community that supports and refines the technology and governance of the ecosystem.
Wishing to emphasize efficiency, I add that the first decade of blockchain-based distributed-ledger technology shared through open-source code offers pre-existing applications (and concomitant opportunities) for building new products without entirely reinventing the wheel. A prudent digital assets ecosystem will take advantage of already-available tools.
Compliance with regulatory protection policies and sensitivity to user needs and preferences are far superior to opposition and indifference. Central governments and so-called fiat currencies are not going away anytime soon; national statutory models have much to inspire a code of good conduct. And humans will expect (and deserve) good service in exchange for their participation in a decentralized community. Mutual respect builds rapport, and from rapport emerges cooperation, compassion, consensus, and construction.
DKR
CAUTION/DISCLAIMER: Please do not take any of what is written in this editorial as legal advice (or, for that matter, as advice of any kind). One should always seek advice of one's own legal counsel and/or other relevant professionals.
Copyright 2018
Dane Keller Rutledge
All rights reserved
Recent articles by Dane Keller Rutledge:
"Creating a Comprehensive Digital Assets Ecosystem (DAE)" (October 24, 2018)
"Fundamental Human Constituents of a Comprehensive Digital Assets Ecosystem (DAE) (November 5, 2018)
"Giving Free Gifts to Stimulate Initial Interest in a Digital Assets Ecosystem (DAE)" (November 16, 2018)
