It's the Crypto Network, Stupid

A simple lesson from the 2018 bearish crypto market: We are better together, argued Ian Simpson of the Crypto Valley Association.

AccessTimeIconDec 28, 2018 at 5:00 a.m. UTC
Updated Sep 13, 2021 at 8:42 a.m. UTC

Ian Simpson is chairman of communications at the Crypto Valley Association, an organization that supports the Swiss blockchain sector.

The following is an exclusive contribution to CoinDesk’s 2018 Year in Review. 

2018 year in review
2018 year in review

“Grin and bear it,” they say.

And in the current crypto market conditions, many people, on all sides, are “bearing” it, most without any grin on their face whatsoever. But those who are showing any faint signs of satisfaction – leaving aside the Nouriel Roubinis of the world – are the ones who have learned a simple lesson: We are better together.

If there is one major flaw that crops up time and again when people suddenly become endowed with exorbitant amounts of money, it is the conviction that no one else is needed. After all, money solves everything; it is, as Fyodor Dostoyevsky famously claimed, “coined freedom.”

This was the promise of ICO funding: non-dilutive capital, no activist investors, no long list of required paperwork. Crypto supposedly allowed every talented group of visionaries to pursue their own version, at their own pace and within the confines of their own team.

As we all now know, it turned out to be much more complicated than that.

A Betrayal of Faith

And let’s be honest – this independence hasn’t been good.

Not only was it not good because teams weren’t held accountable for shipping code and acquiring a healthy base of users and customers in order to sustain a business, it wasn’t good because the vast majority of projects set out for the moon, charting their own path without ever considering how they would eventually fit into a wider, more interconnected blockchain ecosystem.

And this is a clear betrayal of the blockchain ethos. Remember – it’s the network, stupid.

The same network effects that ballooned the Telegram communities of some of 2017s big-name successes also created a false sense of security and confidence and subconsciously inspired a return to centralized thinking: We are number one.

To be fair, this is the kind of thinking that most often fuels successful businesses – you know, market dominance and all that. Further, you would be hard-pressed to find a more collaborative developer community than Ethereum and a more decentralized company than ConsenSys, and both have had their troubles.

Unfortunately, using the same protocol or programming language doesn’t always lead to successful collaboration and success. But in the end, it isn’t all about the underlying programming language or protocol.

A wide range of wise voices has rightly pointed out that instead of HODLing with every last nerve, people should be putting their heads down and BUIDLing, shipping products and code like there’s no tomorrow (because there might not be).

But actually, as much as BUIDLing real, usable products is imperative, there is a lot of relationship BUIDLing that needs to be done as well. And that includes BUIDLing products that acknowledge the fact that their success depends on these relationships – with other technologies, with other startups, and yes, even with industry incumbents.

It may sound like betrayal at first. Or an act of suicide. But it doesn’t have to be.

Established companies in an industry vertical are there for a reason. They have customers and resources. Most of all, they have built a (certain) level of trust with their customer base. Oh yes, and they have money.

Tapping into those resources and market position makes growth and scaling possible – even in bear market conditions.

New Networks, New Possibilities

“Better together” doesn’t only mean turning to the big corporations for money and industry know-how, however, which is why it shouldn’t be viewed as treason.

It also means cooperation between startups, mergers and a more urgent focus on interoperability, both at a technical level and an ecosystem level. While it might hurt the pride at first, the end result is almost certain to be good. On the one hand, more avenues to adoption lead to a bigger pie to divide. On the other, there will be a greater acceptance among traditional consumers.

Ultimately, this is what users expect: a seamless experience in everything they do.

The spirit of cooperation and decentralization have long been “central” to the success and prosperity of Switzerland, home of the Crypto Valley. But it would be remiss to claim that the country has a monopoly on the qualities.

The idea of “better together” extends, after all, to other jurisdictions as well. Over the last 12 months, projects coming to Crypto Valley, Switzerland have found great advantage in the close connection to nearby Lichtenstein. The Crypto Valley Association has hosted numerous high-level delegations from other countries, many in Asia, who are looking to learn and understand what makes for good public policy for blockchain and crypto technology. And it’s not hard to envision a day when regulations in multiple countries become aligned to the point of enabling truly decentralized businesses.

There are even projects, like Covee, in Crypto Valley using blockchain to tackle the very challenge of collaboration in the field of knowledge work. This closely mirrors the modus operandi of much of the innovation in Switzerland, including that of the joint project of national telco Swisscom and the Swiss Post, which are developing an infrastructure for blockchain applications.

Perhaps the most telling example comes from a brief moment during the public launch of SEBA Crypto, the Zug-based company aiming to become Switzerland’s first fully-licensed and fully-regulated crypto bank. Nikolaj Nikolajsen, founder of Bitcoin Suisse (arguably one of Switzerland’s crypto industry incumbents) stood up to declare that far from seeing SEBA as competition, he and the Bitcoin Suisse board felt that both could work to “grow the pie” and benefit each other.

It was enough put a smile on most people’s faces.

Have an opinionated take on 2018? CoinDesk is seeking submissions for our 2018 in Review. Email news [at] to learn how to get involved. 

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