Home » Latest Buzz / News Consumer Demand for Greater Transparency to Shape the Blockchain & Cryptocurrencies Industry Latest Buzz / News Consumer Demand for Greater Transparency to Shape the Blockchain & Cryptocurrencies Industry 4810 Views

In 2019, transparency has become a make-or-break factor for both Blockchain-based projects and communities that plan to bootstrap a digital economy using Cryptocurrencies. One of the most appealing aspects of distributed ledger technology is the degree to which transparency and privacy can coexist in a decentralized network — such networks which are set to fuel the next iteration of the internet.

Today startups in the blockchain domain are beginning to realize that putting too many veils on a company’s operations, so be it to hide ‘trade secrets’ or discrete practices as this can have nasty repercussions if done suspiciously even if their hands are clean. The idea of project founders and their preference to remain secretive has backfired in an industry tainted by exit scams and scandals. While Bitcoin’s origin story remains shrouded in mystery, it’s slowly becoming commonplace for start-ups to strive for greater transparency.

In part due to the trend at which millions of dollars get raised by token investors over the recent years, a number of projects (and bright one’s too) are becoming more aware of the fact that running a blockchain-based platform involves a great degree of transparency. Much so that in the near future, lack of transparency in a number of areas would inevitably mark you as the negative outlier among the crowd. Though currently, awareness (and regulation) is still catching up so the heat isn’t enough for a portion of projects to take action.

‘’As in every relationship, trust is key’’, this especially applies to startups that are keen on bootstrapping a virtual crypto-economy using DLT. More so in decentralized networks as it is rooted in Crypto culture that ownership of assets must be a direct one and that the layers of intermediaries in between should be zero to none — seeing that rent-seeking behaviour from middlemen have largely attributed to the growth of this industry.

The transparency of a blockchain stems from the fact that a publicly distributed network is open to viewing, where all participants are allowed to see the holdings and transaction of each public address anonymized behind a transaction hash (txid). Taking traditional banking into consideration, we can tell that Blockchain technology is providing us with a level of transparency and security of anonymity that has not existed with financial systems before. That is until we reach the stage where AI and oracles deployed onto blockchain explorers become powerful enough to make relational inferences that could breach privacy.

Now one of the main reasons on why people have been turning to digital currencies is in part due to the idea that cryptocurrencies have been designed to cut out the middleman and shift the power of control from central authorities, to the hands of its users — a key reason on why Bitcoin is so popular today. While the nascent technology itself has been designed ideally to be decentralized in nature, the industry as a whole remains plagued with shady characters and a myriad of toxic exit scammers. For now, the majority of projects aren’t facing significant legal pressures yet, though this is subject to jurisdiction of operations. Thus, many actors in the space have proven to be incompetent and irresponsible in their actions and this has drastic implications towards their genuine stakeholders.

Pioneers and visionaries behind each idea need to not only deliver a functional product and realize their goals on time, but more so maintain a good relationship with their stakeholders. Therefore it’s often expected for startups to be as transparent as possible with the general public on their situation and steps. To a degree of course. Transparency in business matters nowadays, as the prospects of blockchain technology fueling a trustless economy has got a lot of people excited. Despite it being often thought of a ‘’corporate’’ requirement, only a handful of projects are committing themselves to embrace transparency. This is due to the sheer fact that little to no legal clarity exists and often times, blockchain startups are not required to disclose any sort of sensitive information unless requested by the higher authority (worse case scenario). Real companies are accustomed to industry practices in traditional markets, such as how listed companies on a public stock exchange have to disclose sensitive data on a quarterly/yearly basis, through reports. Transparency concerning publicly traded companies is essential for the proper function of capital markets. Investors need reliable and timely information about the business performance and the assets of the companies they’ve invested in.

Founding teams need to embrace transparency as it benefits startups at a cultural level, helps a project differentiate itself from the competition, and creates positive public perception. Since the industry is plagued with bad actors who prefer ‘’the Wild West’’ by staying anonymous, it would be counter-productive (and intuitive) to not instill trust in your stakeholder. It’s time that Blockchain-based startups, especially those that claim to be decentralized in nature, to become more transparent with their token holders. By issuing out reports on a regular basis, and perhaps, even reaching out to reputable auditing services for public screenings are ideal steps to not just improve stakeholder confidence, but further industry confidence as this becomes common practice. When traditional market sentiment and confidence on digital assets rise, so do the investments coming in.

Teams spearheading these projects are expected to be as transparent as possible (with confidentiality in activities that require it of course), especially when it comes to disclosing necessary information. Keep in mind that startups may intentionally bloat their figures in hopes of stirring up positive sentiment or to influence the price of its token.

To date, only a handful of projects are publishing reports and in this Article, we will give more insights on 3 notable Projects that believe in and have gone beyond Transparency

Vechain

A project that plans to utilize blockchain technology to enhance supply chain management. Being a Blockchain-as-a-Service (BaaS) platform, Vechain is attempting to disrupt large-scale supply chain management operations and appeal to enterprises that want to improve their day-to-day business operations. Vechain’s main proposition is to help businesses set up real-time tracking of products and processes, utilizing tamper-proof DLT to store, record, and track goods. This solution provides businesses a secure way to keep tabs on real-world products from production to delivery.

To date VeChain’s team has released up to 6 Financial Executive reports, consisting of a 2 month reporting period that discloses particulars such as: Supply Overview, Expenditure Details, Partnerships/Collaboration Announcements, and Project Updates. Published reports often reveal the latest major developments, expenditures, and additional notes that provide greater insight surrounding the project’s latest developments

The Latest Report: VeChain Financial Executive Report Vol. 6

Aergo

An enterprise-focused blockchain that intends to bridge private & public blockchain, allowing businesses to deploy a unique architecture on a hybrid network. One that benefits from both the perks provided by a public & private blockchain. Being a Samsung-backed venture and strategic partner of Blocko, a leading South Korean BaaS operator, Aergo is collaborating with several top 100 Forbes companies who are keen on exploring private & public blockchain solutions. Their founders are members from Blocko, and in 5 years of being in the business with over 25M users in South Korea using their private blockchain, Coinstack, enterprises have been demanding for a public network integration. After over 23 deployments in South Korea, they learned that the next iteration for Coinstack is a hybrid blockchain. Aergo is a hybrid network built to deploy tailored solutions that suit the highly regulated enterprises and open up the benefits of data interoperability through permissioned Git-like access.

The upcoming startup has been releasing quarterly reports that provide a deep dive on areas such as: Token metrics, Financial Statements, and Latest Developments. Aergo is but another notable project that does not lack the resiliency in releasing full comprehensive quarterly reports that cater to the greater need of transparency towards its stakeholders and ecosystem, seeing that past government POC’s has led them to the path of being regulatory compliant for more upcoming national initiatives. The team covers rather sensitive commercial insight despite there being no obligation to do so. Set to be one of the most transparent projects in the space, their coined “QPU” (Quarterly Project Update) goes in detail on how Aergo further plans to allocate funds that have been raised and to address stakeholder concerns.

Latest Report: Aergo Q2 2019 Quarterly Project Update

Ripple

By connecting major Banks, Corporations and Financial institutions, RippleLabs seeks to leverage Blockchain technology as an efficient and effective means of transferring value around the world. This Blockchain project serves as a real-time gross settlement system, currency, and remittance Network, that’s essentially tailored to the likes of financial payment services.

Ripple has released a native digital currency token known as XRP and runs an independent payment network whilst also offering various payment protocols. Banks that look to remain relevant in the future are partnering up with Ripple as to gain better insights on how blockchain technology can be used to conduct near-instant settlements. For Ripple to grow its clientele, a high level of transparency needs to be instilled as this startup faces the challenge of dealing with highly regulated companies, corporations, and institutions from the traditional Finance sector. These financial institutions are wary of the risks associated with digital currencies, thus Ripple needs to meet all the requirements for compliance according to the standards set by financial institutions, capital markets, and the government. RippleLabs regularly publishes quarterly Market Reports as part of their ‘Ripple Insights’ report series which summarizes XRP sales, Escrow Activity, Market Commentary, and Analysis.

Latest Report: Q1 2019 XRP Markets Report

It’s a good practice for startups to be more transparent with the general public, especially since decentralized technologies are all about creating a trustless environment. Early contributors, who believe in the vision and goals of a particular project, play a vital role in bootstrapping a digital economy. In the Crypto Space a number of problems will arise as a result of ‘’lack of transparency’’, especially in regards to how raised funds are being managed. It’s hard to argue that someone can contribute more value to a company by knowing less, therefore having unhindered honesty will benefit projects in many ways, especially once founders embrace the idea that certain type of information should be made accessible by everyone. When it comes to a nascent new asset class, being transparent is more than just being honest as it can instill confidence & build trust amongst Stakeholders

While upcoming Blockchain-focused startups don’t need to become Security auditors, it’s important that teams spearheading these projects realize the critical benefits of when being fully transparent. Startups should remember to keep in line when it comes to Transparency, as it builds trust and makes stakeholders feel that they’re working on a project with higher ethical standards.

Even if you’re running a big corporation, that prefers to remain secretive about the billions you’re earning. Among startups these days, there’s a growing belief that sharing this information can yield benefits in a variety of ways. This is especially true for an industry plagued by shady characters, exit scams and false promises, resulting in investors losing Billions of dollars. It’s time for Blockchain-based Startups & Founders to embrace Transparency, as it should be the norm for decentralized projects to thrive in a trustless environment where all the necessary information is made available & accessible to stakeholders.