Winning global sentiment is the key to long term success
In my previous post I titled: "Post Global sentiment analysis - public sentiment as the invisible hand behind democracy and how it relates to DPOS " I discussed the importance of global sentiment analysis. It's not enough just to analyze global sentiment but also important to do something with the results of that analysis. In this post I will suggest some ideas on what can be done and describe the importance of data analytics in the crypto space.
First some assumptions:
- Strategically the key to "long term success" of any big project (like Ethereum or Tezos) is to either be on the side of global sentiment or bring global sentiment on the side of the project. This is to say that going against global sentiment is not sustainable if the goal is mainstream adoption and maximum profit for token holders.
- Global sentiment analysis can be broken into subsections as there are many demographics who are stakeholders or who either positively or negatively will be influenced by the success of the project. All who will be influenced by the project must have their voices heard and sentiment tracked. This means for example if you are building self driving cars and you know from the data that a lot of people will be put out of work then it is important to track the sentiment of those who have something to lose from the success of the self driving car. The self driving car may be the better technology but the human beings accustomed to driving taxi's may not share the same sentiment as the human beings building the self driving car.
- Data driven decision making should be encouraged more in the crypto space as projects become bigger than the developers. A truly global crypto project on some level is owned by the world.
- Building for the world community rather than merely the "crypto community" requires an understanding of the sentiment and interests of the world.
What is the data driven approach?
The data driven approach requires capturing different data points. If we want to use an example we can think of different demographics of potential users as having unique sentiment scores. These scores would represent data points which can be useful for guiding the decision making process. For example, skateboarders in New Orleans could be a very influential demographic in crypto and they may be putting a lot of money into the project and or be very important to the mission of the project, and in this case the weight of their score could be higher.
Approval ratings are used to measure the public sentiment in the political space. Different politicians or different laws may have lower or higher approval ratings. These approval ratings could be represented in the crypto space as well and I would suggest as building for worldwide adoption becomes standard it will become appropriate to find out exactly what the world thinks of any particular feature, roadmap, approach, etc. If skateboarders in New Orleans are large holders in a project then they hold a lot of stake and the weight of their opinions should be reflected in decisions. At the same time, even some who do not hold tokens may have opinions which hold a lot of weight.
Regulator sentiment is going to be an important metric as well. What is the regulator approval rating for a particular feature or approach and how does it balance with the approval ratings of the rest of the demographics? Regulators hold a lot of weight because their decisions have a large impact on the project but at the same time the stakeholders who buy the tokens have a lot of weight because without these people the project cannot fund itself. The ability to map sentiment will allow developers to know what different demographics think about what they are doing and different solutions can then be mapped according to these metrics.
If we look at the political space we can see for instance that lawmakers cannot write whatever laws they feel like it. Lawmakers make their careers on public sentiment and if they violate the sentiment of their constituents too much they soon find out that their services are no longer needed. In essence the laws overall have to reflect the sentiment of their constituents or else. This requires that lawmakers (just like corporations) must truly understand their constituents and the only way to do this is by hiring data analytics companies which use data from social media and other places where it's collected for analysis by the latest techniques.
This ability of both politicians and companies to analyze data is one of the keys to being successful in politics and in business. In my opinion because crypto is going global and because certain decisions are political with the same dynamics, it is going to require the same level of data analytics that we see in political campaigns. There will also be conflicts between global sentiment and the sentiment of regulators such as we could see play out with regard to privacy but it is important that the sentiment on all sides be known. If the sentiment of regulators are known then project leaders can use the results of that analysis to predict future moves regulators could make in the response to some of their decisions and at the same time if global sentiment as a whole is known then developers will have a deep enough understanding of human needs to actually create to meet the supply for those needs.
Data analytics is under-rated in the crypto space
The ability to capture and analyze data is severely under rated in the crypto space. The first problem would be how to actually capture the data and analyze it? The data is pretty much everywhere so the main issue is how to process it in a way so that it can be analyzed to produce something useful for consumers of these results. In politics and in business the value of data analytics is well known and is in active use in marketing analytics and political campaigns. In design decisions data analytics is used by way of anonymous statistics to determine priority for how to structure the user interface. There are many other examples but a lot of high quality decisions are data driven decisions due to the fact that precise decisions typically require a lot of data analysis.
Technical decisions such as which compiler to choose or which data structure to go with are really the sort of problems best suited for developers to deal with amongst themselves. Advisors and others who are more technical can help with technical decisions but this is not the sort of decision which can scale with input from the crowd. The political or socially oriented decisions which are not technical on the other hand ultimately do get resolved by the crowd. While it may or may not be appropriate, we can look at the many Bitcoin forks and block size debate as an example of a political decision which emerged from a technical debate.
The political decision behind the block size debate ultimately in my opinion ended up being a question about whether Bitcoin should appeal to the world market or to it's original core demographic. The world market which includes potentially billions of users will require a Bitcoin which can scale up to support their use cases. In addition, the sort of Bitcoin which has unlimited use cases rather than just electronic cash is also likely to be more appealing to the world market. Ethereum currently appeals more to the world market and global user base than Bitcoin which is part of the reason why many predict Ethereum has more long term growth potential.
For Ethereum to be the decentralized world computer requires much more concern over global sentiment. It's not a single use case which means the world market will be involved. This means world politics not just local politics. It means global sentiment rather than just the sentiment of a small community. The crowd in my opinion will have a lot more influence over Ethereum and we saw a hint of this with the hard fork over The DAO. How will Ethereum developers take into account global sentiment and adapt their priorities to match it?
If we by contrast look at Steem we can see that Steem is very much influenced by American sentiment. It is not on the Asian exchanges and most of the big whales are from English speaking countries. The Steem ecosystem is global but in order for Steem to truly take it to the next level it has to diversify by a great deal and expand. In the long term Steem very likely will become a platform which must take into account global sentiment. EOS will allow Steem to scale to the levels necessary to become truly global but what impact will this have on developers? Will Steem implement data analytics not just for the developers but for bloggers as well? Will I as a blogger be able to track the information and metrics necessary to better appeal to my followers? There is a window of opportunity to add data analytics capability onto Steem because while Steem touts being open, and touts being transparent, there does not seem to be a lot of data analytics capability publicly available. Am I missing something?
Conclusion - understand the global sentiment to obtain mainstream adoption
The better developers, bloggers, and all who add value to a project understand global sentiment the easier it will be to achieve mainstream adoption. To truly understand what the users, the customers, the viewers want, is to better be able to provide to meet those needs. The new platforms which promise self amending ledgers will be geared toward maximum adaptability but all of that is useless if global sentiment is not captured and analyzed so as to know how to prioritize features. What features do the current users want and more importantly what features will the future users want? Predictive analytics will be the key in my opinion for figuring out resource allocation.
References
- https://martechseries.com/analytics/audience-data/the-importance-of-data-analytics-in-marketing-strategies/
- https://en.wikipedia.org/wiki/Predictive_analytics