Ditch the rose coloured glasses and keep an eye out for these common pitfalls before agreeing to work in the blockchain startup industry writes MissBlockchain and WIBI founder Akasha Indream.
With public figures labelling crypto as a pyramid scheme, and the co-Founder of Wikipedia Jimmy Wales calling it a “Bubble” at the Berlin Blockshow, is blockchain really so attractive an industry to work in? Jordan Belfort, the figure immortalized in The Wolf of Wall Street, dismissed the craze for initial coin offerings in 2017 as “the biggest scam ever” that is bound to “blow up in . . . people’s faces”. Well, we’ll see.
Maybe you have the stomach for stepping on landmines and like loud scary noises, and crypto really is the industry where you want to work. Meeting and mitigating the impact of scammers and scams is a part of any day in the life of a cryptoland wanderer, and Jordan French’s new article gives you six tips on how to spot an ICO fraud at 60 paces. Get prepared and check them out: https://www.thestreet.com/investing/bitcoin/how-to-spot-an-ico-fraud-14602580
It’s this double edged sword of economic freedom tempered with industry shysters that is what leads some people in the industry to say that they “love” blockchain and “hate” crypto.
But the reality is that without crypto, blockchain doesn’t exist. (A bit like the old song, love and marriage, horse and carriage…) Because blockchain needs crypto in order to incentivise the decentralized networks through proof of work or proof of stake, that then enable the trustless peer to peer transactions that are so more efficient and radically empowering than the centralized transactions of old, which, for the extent of human history to date, has required civilians to kowtow to trusted third parties who took their share (i.e. aka the authorities).
So, if we make the assumption that humans love freedom, and love their tech, we can also make the assumption that crypto is here to stay. And, even more than freedom, we can assume humans love their burgers, and loyalty points. Says Bloomberg: “Within five to 10 years, 5 percent of U.S. adults will use crypto loyalty points, and the annual issuance of related tokens should reach US$3.6 billion, said Lex Sokolin, global director of fintech strategy for Autonomous Research LLC. Within 10 to 20 years, 15 percent of Americans are likely to use digital loyalty points, he estimated.”
The people who work in crypto legitimately, either on blockchain startup teams or as part of the wider support industries, do it because decentralization and the ideal of human independence and economic freedom is something they care deeply about. If this speaks to you, and you also share in these values, better bite the bullet and invest in some ear muffs.
So what will you see when you start seeking work in the blockchain industry? Well, it will depend on what your level of education and industry background is. But the basic thing to remember is that the blockchain industry is mostly a new, fluid field, and like any startup domain, sharks abound.
Startup life is not for the faint hearted. Everyone is on the hunt (in some shape or form) for funding. Remember, whilst there’s a small percentage of Bitcoin billionaire’s, most people in the industry don’t necessarily have real liquid assets to share with you — and the people that do hold onto them for dear life. (They aren’t warm fuzzy open-hearted Carebears, they are pragmatic business people.) So, applying for work here isn’t always like applying for work in a normal 9–5 job. Crypto work, with teams spread internationally across time zones, is more of a 24–7 kinda job. And unless a team is post-ICO, fiat money is unlikely to be on offer. So what do they try and pay you in?
“The most commonly used tokens by blockchain startups these days are ERC20 tokens, which are digital assets rather than currencies,” says Marie L from Satoshi Library, a seasoned ICO Community Manager. Marie warns off any industry newcomer accepting ICO tokens as payment, although whether you accept them is up to you.
“Though they might be very easy to create by the blockchain founders, they are incredibly insolvent for any freelancer or professional. It could easily take months for the ERC20 tokens to actually gain in value and workers have bills that need to be paid.”
Yes, everyday people like you and me have bills to pay. And no, monopoly money doesn’t pay the phone bill (yet). As a host of a Telegram chat group with over 60 ICO community managers, discussions often come up about how a member contributed real time and effort to a blockchain startup, only to have the ICO tokens that they were paid in worth nothing at the end due to no fault of their own (e.g. due to team abandonment, roadmap failure or security hack). That’s often weeks, months, of their working lives that have been wasted, with nothing to show for it. No savings, no super. Marie continues:
“So, unless the tokens actually reach an exchange they might as well be monopoly money. Worse, they will cost you money because the recipient has to buy ETH to pay for gas to get these tokens to an exchange and this can get expensive for those from developing countries.”
And watch out, if you are a blockchain startup offering to pay your workers only in your native token pre-ICO, because Marie has some hard news for you:
“From a business and investor perspective, this really says a lot about the blockchain founders and more specifically, their lack of experience. Their lack of liquidity is definitely a huge red flag indicating that the business is still very premature and their lack of willingness to pay their people for their work sets the pace for their business ethics in the long run.”
So what are the alternatives? Well, take a leaf out of the blockchain startup space, and be your own entrepreneur. People are doing it all over the space — creating their own online publications, their own conferences, their own advisory boards, marketing and startup services. As a booming industry, there’s sure to be a niche that’s perfect for you.
I need a side hustle from my crypto side hustle
— Bitcoin Bella [Dutchess of Shitpostington] (@bitcoinbella_) May 29, 2018
Alice Hlidkova, new Co-Host of the New Economies, NASDAQ show on YouTube with Lucas Cervigni, and seasoned media and ICO expert has this to say:
“The ICO space can be risky and many companies have been hit with cease and decease orders. If it’s a new ICO that has not reached the exchanges the coins are not valuable to an average worker. Some companies have pending applications for 3 months or more with the exchanges so again you want to be compensated now with FIAT, and with FIAT and tokens in the future. This combination is always negotiable. You want to cover your cost of doing business.” Alice Hlidkova
Of course, you may not have a long line of people wanting your services, so you might have to take what’s on offer, if you want to get a foothold in this steep and risky place. Like anything, it then becomes an analysis of cost v benefit. What can you afford to lose? Make sure you have a stop loss limit (like any successful token trader), and after that, you get out. Like when it comes to cryptocurrency investing, don’t put in more than you can afford to lose. Your time, just like your money, is also valuable.
As a working person, you are going to have costs to cover. Internet costs. Insurance costs. Social media subscription costs. Family and care associated costs. If you are offering a PR service, you may have third party costs or staffing costs. Hear me? Costs, costs, costs. So, if you aren’t being paid in an immediately exchangeable currency, what’s the real benefit to you? Maybe you want experience and that’s OK — get it. But don’t suffer for your ideals — if you want a free world, with more independence, and economic empowerment, that free world also starts with you. Your economic freedom matters, too.
And if they offer to pay you in cash? Or liquid tokens? Negotiate a portion of it upfront. With international clients, there’s very little to no recourse for SMEs who don’t get their invoices paid. Believe in your worth. If they don’t or won’t pay upfront, question whether they have the funds to pay you at all. Better to move on, find another client now, before they waste weeks or months of your time chasing unpaid invoices.