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Cryptocurrency Transparency Is Essential In Marketing A Coin

By Steven Krohn · July 27, 2018

“We have an opportunity to reform the financial system, to turn it into the public utility that it’s supposed to be—a level playing field that everyone can indiscriminately use in their bid to get ahead. Let that be the standard for the coming age of cryptocurrency.” 
― Paul Vigna, Challenging the Global Economic Order

Cryptocurrency startups have raised millions of dollars in the last couple of years. Very few industries have shown such phenomenal growth in such a short time period.

Success of ICO projects can be attributed to best practices implemented by new fin-tech companies. Cryptocurrency ventures are defined by their use of cutting edge technology to bring vast improvement in processes.

This includes creation of publicly accessible networks that benefit the exchange of information.

The most critical practice for success is cryptocurrency transparency. Offering information to investors, platform users and regulators builds trust. It makes a project more reliable and increases acceptance many times over.

Here we will discuss ways in which crypto platforms can be more transparent.  We will also cover pitfalls that need to be avoided.

Cryptocurrency Transparency In The Digital Domain

There are at least three areas where crypto can be more open and transparent.

First, each crypto team should be open about the assets of the business. Most crypto projects start out small with few assets to show.

The team members often take on multiple responsibilities. The potential for growth at this stage is huge.

In order for investors to take interest, the holdings of the business must be clearly identified and communicated.

A crypto use case usually holds the following assets during its existence.

  • Tokens
  • Fiat Reserves
  • Equipment and Machinery
  • Real Estate and Property
  • Automated Smart Contracts

We all have seen examples of crypto that simply does not account for these assets when determining the value of the project. This is also prevalent during ICOs and future coin launches.

Crypto developer teams should willingly publish asset reports on a routine basis, similar to financials reported by main stream companies. The crypto team should also invite auditors to review their accounts for consistency.

This would be a step in the right direction by providing two benefits for coins. It would make the investment more attractive to larger investors while improving regulatory compliance.

The second area where cryptocurrencies can improve is cost reporting. Crypto teams spend a lot of resources in developing a fast, global infrastructure to ensure platform accessible globally.

Major expenditures include the following.

  • Setting up network nodes
  • Developing the code to run the blockchain
  • Legal fees and regulatory expenses
  • Marketing and PR costs
  • Technical development and improvement costs

Most cryptos fail to publish any report regarding their expenses. Without a detailed report about assets and expenses, it is difficult for investors to determine the true value of any coin.

We need cryptocurrency transparency.

For new crypto tokens, it is imperative that expenses are clearly spelled out in the whitepaper. This simplifies the process where investors assess the profitability or economic viability of a project.

Hiding or failing to report expected costs shows either inexperience or deception.  Both set a bad precedent for the entire market going forward.

Recording transactions is the third area where cryptocurrency transparency is important. Serious investors prefer to see that the majority of coins are not concentrated and not held by a small group of people.

When a developer, and team, holds the majority of its own coin, the price is ripe for manipulation. What that means is that a few can artificially raise the price through controlled trading.

This is often called a “pump and dump” scam.

There are very few crypto coins that take the well being of investors seriously. Crypto developers see investors as wallets of quick cash who will simply look for opportunities with artificially inflated ROIs.

Rarely do you find crypto assets, expenses and capital reported in a transparent fashion. Cryptocurrency transparency is basically non-existent.

In The End:

We believe that this must change for crypto markets to be seen as serious and reliable business models.  You simply cannot have a business, crypto or otherwise, which fails to share basic information about its income, expenses and assets.

If we don’t want the markets to collapse under their own weight, we must have more open, transparent and reliable information for everyone.

We must have cryptocurrency transparency.

 

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Evelyn
Guest
Evelyn

Without a detailed report or recorded transaction about assets and expenses, it is difficult for investors to determine the true value of any coin. And this is not going well for the market because developers would lose out at some point.

Dammy
Guest
Dammy

We need cryptocurrency transparency no doubt. I think there should be a law or something where any developer team that does not provide a record of some sort would not get investors. We really need to do something about it.

Jane Nicholas
Guest
Jane Nicholas

True Krohn, we have an opportunity to reform the financial system, to turn it into the public utility that it’s supposed to be. But how will that work if we don’t support the reformation ourselves and doing what’s right?

Pearl
Guest
Pearl

We believe that this must change for crypto markets to be seen as serious and reliable business models. No genuine business would not share records especially when investors are involved.

Barclay Bob
Guest
Barclay Bob

You simply cannot have a business, crypto or otherwise, which fails to share basic information about its income, expenses, and assets. This is a red light to investors but it is still on the increase.

Ella Oscar
Guest
Ella Oscar

Cryptocurrency startups have raised millions of dollars in the last couple of years. This is a great feat but they still take this for granted and don’t do what’s expected of them for people to trust them better.

Smith Oliver
Guest
Smith Oliver

Now a few people can artificially raise the price through controlled trading.. This is not fair but I think when there’s a financial transparency then all these would end.

Brittany
Guest
Brittany

The most important ingredient for success is transparency and when cryptocurrency startups aren’t doing that, it becomes a major problem for them to gather legit investors.