When #BUIDL? Switzerland at the Forefront

What is the major problem with the cryptomarket? People caring only about getting rich rather than really focussing on building (#BUIDL) long-term, value-creating products for society.

#BUIDL: Switzerland front and center. © Wikimedia Commons

The problem can easily be traced back to a simple misconception of decision-making. There is a significant number of blockchain startups building service offerings employing some sort of decentralised consensus without asking the very basic question: do we really solve a current problem society has? They basically reverse the entire decision-making-process one should conduct as startup founders by asking themselves what problem they solve after building the product. If no such problem exists in the first place, well, then they just artificially create one. So essentially, a lot of startups just don’t think about their value for society, which is a flaw in decision-making, and this constitutes a severe “market failure”!

So, what is the problem with people’s mindset here? Are they ignorant? Are they stupid? Not at all. It’s because they do not have to care about this very basic question. It is a well-known fact that humans act according to incentives. And exactly there lies the profound hitch. There are no coercive market mechanisms in the cryptomarket that would entail a mindset-changing decision-making-process — and that is our biggest problem!

Usually, if such market failures arise, governments react with bans or overregulation (e.g. China). A lot of empowered politicians are people filled with fears to lose their power. The one and only country — however — that has set the right direction with its development is Switzerland, or as it is nowadays sometimes called ‘Crypto Nation Switzerland’, referring to Swiss Federal Council Johan Schneider-Ammann’s speech at the Crypto Finance Conference in St. Moritz at the beginning of this year.

How to build an ecosystem beneficial to sustainable crypto startups.

Switzerland is building a unique ecosystem, consisting of the well-experienced crypto valley and its communities with their central hub in Zug and branches reaching throughout the Swiss landscape, a prudential regulator (‘FINMA’) embracing the new technology movement by providing the appropriate legal breeding ground for young entrepreneurs to develop their potential, and Switzerland’s innovative power expressed by its cutting-edge education system. Of course, there are further valuable add-ons such as crypto rating agencies which can help the market to regulate itself or seasoned lawyers complementing this environment.

Why does Switzerland’s behaviour constitute such a role model? As being part of the distributed world, you need decentralised market mechanisms that boost long-term sustainable blockchain projects rather than a centralised regulator with jurisdictional boundaries. The abovementioned ecosystem exactly entails such decentralised market mechanisms and an open-minded Swiss regulator.

Why some confederates in the Alps choose to fight a detrimental cryptomarket. © Mohsen Kamalhzadeh

In spite of all the positive news surrounding this development, there is one problem that can also be observed in Switzerland, that is, Blockchain-purists aiming to boost the innovative power of the distributed ledger technology clashing with business people sniffing big profits by trying to monetise anything conceivable in this ecosystem. This is best observed in the numerous non-sense blockchain conference events springing up like mushrooms where participant’s (predominantly poor startups) pay a lot of money to listen to wannabe experts.

In any case, organising blockchain conferences is becoming a major business — a very troubling development. What is more, anyone who has ever heard the words “ICO” and “marketing” now seems to be an expert in one of them, or even better, in both. Let us not forget, quantity rarely foster quality, which is not to say that there are also high-quality events, such as the Crypto Finance Conference, among others, or advisors that can bring projects forwards with their expertise. Nonetheless, less talk and more focus on #BUIDL would certainly do no harm.

To consolidate my reasoning, Switzerland exhibits the optimal foundations to become the number one leader in blockchain and cryptocurrency innovations, and as a consequence, can also contribute in countering the current non-sense development globally. To do so, all the relevant stakeholders need to work together for a jointly crafted win-win solution such as propagated by the FINMA with to well-diversified ICO working group. These solutions will however only succeed if people do concentrate on creating real economic and societal value rather than just playing the bullshit bingo game. And this is also valid for Switzerland.