Back in a relatively distant past, I spent a fair amount of time being involved in the Network Marketing industry, known to some as "Multi-Level Marketing," or MLM.
To be honest, I actually spent less time being a serious network marketer, than I spent studying and writing about network marketing for a variety of business publications.
As might be expected by those who view multi level marketing — as it was called at the time — with a skeptical eye, immediately thinking of Ponzi Schemes, not everything was as it appeared.
The reason I find myself remembering this today is that I got to thinking about the Cryptosphere and cryptocurrencies as being not dissimilar, particularly in light of Vitalik Buterin having to answer some perhaps uncomfortable questions about Ethereum.
Back then, one of the key questions was always ”well, what is the product and what is the value proposition?”
The "uncomfortable truth" that often surfaced was that there was really no value proposition, and the only ostensible value proposition was the promise of being able to make money from participating.
Of course that typically left people thinking "well, that's just a pyramid scheme," and it was often true that many of these so-called "programs" were little more than pyramid schemes even though they fiercely insisted they were not.
A venture that holds forth that the "business" or "product" is the ability to make money is ultimately simply selling empty space. There has to be more on offer or the system won't work.
Unfortunately, there are many aspects of the Cryptosphere that are not dissimilar.
There are often promises of great returns from various projects (especially true of Defi), but when you study the attendant white papers, you will find only the tiniest and flimsiest hint at an actual business plan.
In an interesting sense, a venture like Hive is fairly close to being the exception rather than the norm in this industry because there is actually something being transacted here, namely there is content being created and people are being rewarded for that. Or there are games being played, with game components being sold to generate revenue.
Those are already business models that exist in the greater world... even if the method used to calculate pay for content is different than an advertising based model compared to our model here.
On a personal level, one of the things that has often made me a little bit uncomfortable about this industry — and has led me to bypass an awful lot of seemingly promising projects — is precisely the fact that I could never determine exactly what the value proposition was.
Sure, there were great promises of wealth being generated, and big numbers associated with the rates of return were thrown around, but what value was actually being generated? Much of the time I could find nothing at all.
Perhaps to the consternation of many of those who seem to live and die on breathing hopium fumes, there truly is no such thing as "money for nothing." Well, at least not if you're hoping to be part of something for more than the few months a couple of years it takes for a House of Cards to collapse.
We often complain and say that "it's unfair" that the crypto industry is subject to so much scrutiny, but what are we really doing to provide an actual product or service that warrants the existence of any given blockchain and crypto project?
I'm not claiming I have any answers to that question, so I'm just posing it out into the world in general.
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Created at 2024-08-28 01:08 PDT
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