“We are still early!” or the real reason why crypto stays behind

Table of Contents

1. Introduction: The "We are still early" Phenomenon

2. Debunking the "Still Early" Myth

3. The Paradox of Poor User Experience in Crypto

4. Risk Concealment in Crypto Projects

5. The Problem with Crypto Communities

6. The Case for Regulation

7. User Guidelines for Navigating Crypto

8. Conclusion: The Path to a More Professional Crypto Space

1. Introduction

If you've ever read this sentence in a so-called community, you're likely navigating the crypto world. It's a fundamentally human trait to fiercely defend poor decisions made based on emotions. This is known as the pain of cognitive dissonance. Admitting that one is on the wrong track raises too many uncomfortable questions. We see this behavior in many areas of life, be it investment, politics, or relationships.

In my research, it has become one of my personal risk indicators when a group of investors defends a project with arguments completely devoid of facts, a project that, simply put, is bad and delivers nothing. If we are honest, all crypto projects are like this. Even in the stock market, there are companies that sell more vaporware than actual value. But that's okay as long as one is aware of it. If you, as an investor, have a short time horizon, you can benefit from such communities as long as you don't fall for their narratives.

2. What does "still early" actually mean?

The fact is, crypto has existed for over 10 years. The stock market has been around for 400 years. And IT and software have been a significant part of society for at least 40 years. This means we have enough experience with finance and user experience. It's simply an excuse to continue claiming that one's project is a "sleeping giant" or a secret submarine that will soon emerge and revolutionize the world while the slow masses miss out.

This narrative may have worked well initially and had its justification when the technology was still young. But after 10 years, it should be clear: either things change drastically for widespread success, or one is simply never able to deliver something that the average user can use. Keep this fact in mind: Crypto VCs invest hundreds of millions in projects. Do you really think there's no money left to hire a UX designer?

3. Why Crypto Benefits from a Negative User Experience

It may seem paradoxical: why not offer a product that is easy to understand and thus attract more users and investors' money? Simply put, because they don't want to. And I'll show you why. Risk is an essential part of investments. And it is also in the nature of finance to profit from so-called inefficient markets. A market is inefficient when information is not available to everyone in real-time. A company may be working on something significant, and only a group of investors sees the future value of this development.

That's how all markets work; the value counts, not the price. And the ratio of these two determines whether it is a good investment with much potential upside. Crypto seems to have perfected this for itself. Everything thrives on innovation and promises of the future. But if you look closely, you will see that most projects never go beyond their promises. VCs pump money into marketing, memes, and fancy websites. But no one works on the actual user base. The products are terribly complicated, and the current crypto investor likes that. They feel elite for understanding such complex things that no one else can handle.

You see this constantly in software engineering. And I feel that this isn't fully realized because crypto is the first time IT and finance have come together so closely. This flatters the techies. But what motivation does the project have with this? It can conceal its risks. You made losses? Your fault! You don't understand crypto. I think statements like these are something all of you have read before.

4. Hide your risks

Most projects advertise very high returns, but I have rarely heard mention of risks. And we’re not talking about declining sales as with a publicly traded company. We’re talking about technical risks. In corporate software development, analyses are always conducted on how robust a software component or product is that is being used within the enterprise.

In crypto, it is sometimes almost impossible to determine this. The code is not always visible. Auditors available in the market sometimes have a questionable reputation. It is conceivable that errors are intentionally not disclosed and sold to groups who exploit these security risks to execute hacks or rug pulls. Does that sound like a conspiracy theory to you? Not at all, there are examples where exactly this has happened.

I am aware that no project or company emphasizes what the product cannot do or what might not work when selling it. However, if you look at the current landscape, you can basically only distinguish crypto financial products by their returns. And that’s exactly what most users do. It is worth conducting a deeper analysis at least on that basis.

Why do I get significantly higher returns for a comparable product or service from provider A than from provider B? What difference does it make to use a product on this network versus that network? As a minimum requirement, a project should at least highlight differences within its own product categories. As it stands, I can’t find this anywhere, and if I do, it is very subdued. It would simply deter greedy investors to educate them on what they are actually about to do.

5. Communities Not Worth Their Name

Content-wise, it's generally a good tip to say: Stay away from what is being touted in these investment bubbles. Every investor there is only interested in inflating the asset further or at least not feeling alone with their investment if they have doubts. It’s like smoking—if I persuade others, I no longer feel as bad about my own wrong behavior.

Reviewing many of these communities shows that there is little substantive discussion going on. In many cases, members react with hostility or the typical: “We are still early! What do you want? You have no right to criticize because nothing is complete yet.” This reflex is observed far too often. It demonstrates how inexperienced the investors in these financial products are. As long as decisions are based purely on emotions, they often collapse back in on themselves.

I now hesitate to use the word "community" in connection with crypto without quotation marks. Because it is a facade. Almost a meme in itself, if you will. A community is a group of people with shared interests, working together towards a common goal and supporting each other in achieving it.

But in crypto, this has absurdly turned into a kind of cult that only pretends to be helpful. Experienced investors avoid these groups because the information content is zero and, in the best case, only serves to determine how deluded such a group is. Because that could mean that the narrative of the sleeping giant is at its peak and you should take profits.

6. What is the Solution?

Regulation. Period. I understand that this contradicts the libertarian ethos of crypto (another meme). People claim that crypto is free, unregulated, and protects against government control. But the flip side is that there are massive scams. And the more people invest in crypto, the more scams there are.

Projects need to take responsibility similarly to companies. This will lower returns. High returns often result from dubious business practices. However, it will also lead to projects having to compete more for users, which means improving their user experience at the grassroots level. This will increase project costs but also force them to be more professional.

Implementing regulation can mitigate these issues by introducing several measures borrowed from the stock market.

First: Mandatory disclosure requirements would ensure that crypto projects regularly report their financial status and risks, similar to how public companies file quarterly and annual reports.

Second: Investor protection mechanisms such as insurance funds could be established to compensate victims of scams and fraud. This would mirror the role of the Securities Investor Protection Corporation (SIPC) in the stock market.

Third: Requiring crypto exchanges and projects to be licensed and registered would ensure they meet certain standards, just as brokerage firms and financial advisors must be registered with regulatory agencies.

7. What You Should Look Out For

This might sound boring. And yes, regulators can miss things, as cases like FTX have shown. However, there are initiatives within projects and exchanges to voluntarily implement these measures. The problem is that there is currently little demand for it. It is up to us, the users, to force the space to become more professional by avoiding projects that try to hide or downplay their risks.

1. Transparency and Disclosure:

Ensure that the project provides regular, detailed updates about their financial status, development progress, and any associated risks. Projects that are transparent about their operations are generally more trustworthy.

2. Independent Audits:

Look for projects that undergo regular independent audits. These audits can verify the accuracy of their claims and ensure that their financial practices are sound.

3. Regulatory Compliance:

Check if the project or exchange complies with local and international regulations. Compliance with AML and KYC regulations can be a good indicator of a project’s commitment to legality and transparency.

4. Team Credentials and Track Record:

Investigate the background of the project’s team. Experienced professionals with a track record of success in relevant fields are more likely to lead a legitimate and successful project.

5. User Experience:

Evaluate the project's user interface and overall user experience. Projects that invest in a good user experience are often more serious about attracting and retaining users.

6. Community Feedback:

Pay attention to what the community is saying about the project. Engaged, well-informed community members can provide valuable insights and warnings about potential issues.

7. Clear Roadmap and Milestones:

Ensure the project has a clear roadmap with realistic milestones. Projects with vague or overly ambitious goals may be more likely to fail or engage in deceptive practices.

8. Partnerships and Collaborations:

Verify the authenticity and relevance of any partnerships or collaborations the project claims to have. Genuine partnerships with reputable organizations can add credibility to a project.

8. Conclusion: The Path Forward for Crypto

The crypto industry stands at a crossroads. The mantra "We are still early" has become a crutch, masking fundamental issues that hinder true progress. This self-deception must end.

The path forward demands:

Radical Transparency: Projects must openly acknowledge and address their risks and limitations.

User-Centric Design: Simplify interfaces to broaden adoption beyond tech-savvy early adopters.

Embrace Regulation: Proactively work with regulators to establish trust and protect investors.

Community Reform: Foster environments that welcome critical thinking over blind optimism.

The responsibility lies with both projects and users. Projects must prioritize substance over hype, while users must demand higher standards and conduct thorough due diligence.

Crypto's potential remains vast, but realizing it requires shedding the industry's adolescent tendencies. It's time to grow up, face hard truths, and build a mature ecosystem that can truly revolutionize finance.

The era of excuses is over. The future of crypto depends on action now.