When it comes to expansion, the crypto industry isn’t necessarily suffering from a lack of interest. Crypto’s freedom and potential offer a lot of appeal to entrepreneurs. But even those who are natural risk-takers may hesitate in the face of the nebulous nature of crypto, which lacks the regulatory guide rails, long-established professional groups and educational establishment of traditional industries.
Pinpointing crypto’s needs and helping newcomers find the direction they’re looking for is a task best tackled by those who have already established a footprint in the industry. Here, 14 members of Cointelegraph Innovation Circle discuss the issues that may be keeping newcomers to the industry from jumping in, as well as what can be done about it.
Confusion around the space versus the appeal of decentralization
I get a lot of DMs from people with a variety of concerns. Many do not know where to get started, do not know whom to trust and do not know which projects to get involved in without taking on too much risk. While the situation is getting a little bit better now with more regulations, obviously adding more regulations comes with its own issues. Indeed, one of the reasons the cryptocurrency category is interesting to so many is its decentralization and lack of regulation. It’s something of a double-edged sword. – Kiana Danial, Invest Diva
Complicated and unsupported online and cold wallets
Entrepreneurs who are not from the crypto sector can feel that investing in, accepting and trading crypto is alien and overwhelming. Downloading a MetaMask wallet and then entering a 26- to 34-number address can be a lot for people; if they make a mistake and their money is lost, there’s no customer service and no helpline, and that’s scary. To make crypto more accessible I think there needs to be a big education push by the online and cold wallets to help people understand the importance of their services. As we make the process of moving crypto around the world easier, we will see a dramatic increase in the number of entrepreneurs using crypto for their businesses. Though many businesses want to accept crypto, it is still too hard to turn crypto into fiat. – Tim Mangnall, Capital Block
The need for simple educational materials
The most common barrier I find is the knowledge gap. The technology is very nuanced, and there is a lot of noise (and a lot of disreputable projects) that can confuse entrepreneurs hoping to enter the category. Just as with the advent of the internet, we are at a stage where tremendous focus and energy must be spent to help new users and builders overcome the anxiety of venturing into something so new through clear and simple educational materials. There is no easy path or shortcuts; it’s simply the work that must be done on a daily basis. – Mark Soares, Blokhaus Inc.
Not having personal experience in the space
Not understanding the crypto landscape and vernacular can be a definite barrier. The best advice I can give other young businesspeople in this space is to try to execute a sale or purchase on any reputable platform. Trying to explain to someone how this all works without them actually going through it is like trying to explain to someone how to fly a spaceship. What’s really helpful to the growth of the community and ecosystem is consistent, reputable educational resources made available and pushed for all new users and collectors. – Chloe Janicki, Seven20 Entertainment LLC
Crypto’s cultural differences from traditional industries
The biggest barrier to entry is understanding and embracing the unique culture of the crypto world, which is vastly different from the traditional business world. For example, many great crypto projects were started by teams working from home even before COVID-19 struck. Those teams are decentralized across the world, and a team’s leader could be a young, talented developer instead of a senior business executive with a fancy CV. Given these differences, it is difficult for entrepreneurs to identify and partner with the right people and team to bootstrap a new business. To make crypto more accessible, entrepreneurs should look for a trusted investor/advisor with experience and industry resources in the crypto space to help them navigate this new and challenging world. – Jason Choi, Chiron Management
Minimal regulatory guidance
There’s no shortage of exciting ideas in crypto; however, the path toward building a business that meets legal, regulatory and market demands is vague. With little regulatory guidance, new teams tend to either handicap themselves early on by rushing through the legal incorporation process and needing to do damage control later on or overdoing it with over-engineered, expensive and complex incorporation strategies. In reality, the space is complex and moves quickly, so the sooner builders can get the business standing up and begin raising funds (if necessary), the sooner they can build toward their vision. Finding the right mix of caution, prudence and decisiveness can be difficult, especially for young and inexperienced operators. – James Moreau, Jet Protocol
Few social spaces to discuss crypto
The crypto space is still in the early stages of adoption. People don’t always understand the entire story about how it works and how they can buy or hold crypto, and they don’t always have somewhere to ask questions and talk about it. I think that social investing is a way to overcome these challenges. We need to create communities where people can chat and discuss the different relevant topics and make smarter decisions on how to invest in and hold crypto. – Shiran Herzberg, eToro
The difficulty of implementing Web3 projects
Decentralization — or better put, Web3 — can be a barrier for many because it is difficult to implement in practice. There is an attractiveness about Web3 and creating something, whether it be a blockchain innovation or solution, a decentralized autonomous organization, or a nonfungible token project that helps curate the next generation of community that can be decentralized or accessed apart from the current list of major tech players. That’s why it’s important for us, at Sweet, to help brands, sports teams and creators not just create an NFT project but give their consumers and fans — who may not be fully up-to-speed on all that Web3 is and offers them — a Web3 on-ramp that comes in the Web2 packaging they are used to. – Betsy Proctor, Sweet
The lack of grant funding and dedicated educational tracks
Since crypto is a new technology, there simply aren’t enough qualified engineers out there. For entrepreneurs looking to start a crypto company, it can be hard to find people capable of actually building their products. The solution is more involvement from companies offering grants to aspiring engineers and supporting open-source work, as well as universities and education providers getting their act together when it comes to crypto engineering tracks. – André Neves, ZEBEDEE
Inability to set up bank accounts
In Australia, a barrier to crypto could be as pedestrian as access to banking. It is extremely challenging to obtain a bank account for anything related to crypto — this includes the debanking of small retail investors. This issue has been raised at the Senate level, with a recent select committee report dedicating an entire chapter to the problem. Without access to the banking system, the industry is being funneled toward a small handful of payment providers, whose services can be costly to new businesses. These restrictions significantly limit competition and market access. If we want to make crypto more accessible, bank accounts are a good place to start. – Caroline Bowler, BTC Markets Pty Ltd
The lack of resources or connections
A common barrier we are seeing with the smaller startups and entrepreneurs in this space is a lack of resources or connections. We are in one of the most collaborative times in our lifetime right now, though. If your firm is struggling to get connections or resources to help advance your product or business, I would heavily advise reaching out to as many people as you can. LinkedIn, Discord, Instagram, Twitter and industry conferences are all becoming hot spots for this ecosystem. – Dean Wilson, Seven20 Entertainment LLC
A focus on fads instead of potential
You can come into Web3 from any angle. I love seeing property insurance experts work on real estate-related projects because of their knowledge. I love watching attorneys building out decentralized autonomous organizations and working on tokenomics. My advice would be to not get tripped up by the Web3 fad of the day. Instead, focus on what makes you excited, and look for people in Web3 who are working on the same thing. Twitter is a great way to start finding meaningful connections in the space. – Gary Riger, HeyLayer
Scarcity of skilled, affordable devs
I would say compared to other industries, barriers to entry to crypto are very low. There are so many open-source resources, so many users and so many protocols that we can innovate very quickly compared to other industries. However, we’re victims of our own success, and the main difficulty today is finding good, affordable developers when you’re starting out. For example, since Solana started hyping in Q4 of last year, most Rust developers have already been lifted from the market. – Amber Ghaddar, AllianceBlock
The rapidly changing lexicon
The lexicon changes frequently, and renaming makes things unclear and creates a deterrent for new competitors. Fewer changes to the lexicon would allow new entrepreneurs to better analyze performance, potential and use. This makes it easier for them to navigate the space with clarity and avoid confusion. – Mark Smith, Symbiont
This article was published through Cointelegraph Innovation Circle, a vetted organization of senior executives and experts in the blockchain technology industry who are building the future through the power of connections, collaboration and thought leadership. Opinions expressed do not necessarily reflect those of Cointelegraph.
Learn more about Cointelegraph Innovation Circle and see if you qualify to join.