Finding Your Fit in the Multi-Layered Cryptocurrency Ecosystem

***“There is legitimate value in the crypto ecosystem. You just have to find your fit.” ***

Bitcoin and other cryptocurrencies have gone from being a joke to being a legitimate investment, and in the process, made a lot of people extremely wealthy, resulting in the entire category becoming more difficult to dismiss than ever before.

Along the way, many assumptions are made about cryptocurrency users, such as that they are loud-mouthed, fantasists, geeks, scammers, idealists, and so on. Some of these assumptions are theoretically correct in some instances, but the reality is not always as simple as that.

Yes! There has been a dramatic change in the way we live, work, and transact – all largely driven by crypto. Cryptocurrency as an industry is gradually becoming increasingly simplified, yet complex and so it requires a spectrum of types and kinds of people in order to solidify the industry. Some of which those assumptions are currently filling. And with new tokens, blockchains, smart contracts and apps being introduced daily, this is what I wish I had access to some months ago when I spread my tentacles into the world of blockchain and cryptocurrencies.

While there are no blueprints for building a career in this industry yet, here are a few things to consider about what the FUTURE holds for this innovative crypto space, especially here in Africa. As Santiago R Santos wrote, “You’ll learn (and earn) more being 6 months in crypto than in 4 years of university. You’ll also likely make better friends along the way. Most stop learning once they graduate, but in crypto, the learning curve never stops across disciplines.”

Everyone has a role to play, but everyone will need to find their fit.

Google Trends
Google Trends

Using Nigeria, the largest black country in the world as a case study, data from search trends show that crypto interest is growing rapidly in Nigeria, and similar patterns are observed across different African countries. From the data, there was a crypto interest spike in 2020 that crossed into 2021. In Nigeria, that growth was shunted by some regulatory events. But the trend seems to be back again.

Published originally in the CryptoHub 2021 Report
Published originally in the CryptoHub 2021 Report

Based on general research, and a bit of trendspotting, here are the 6 layers of people within the crypto ecosystem.

Layer 1 - BUILDERS

For every coin, wallet, DAO, NFT marketplace, DeFi, exchange, game or crypto asset, there is a group of individuals who built them. This category of people consists of founders, core team, developers, coders, designers, engineers, miners, validators, etc.

A builder in the crypto ecosystem is someone who is a part of a crypto startup conceptualizing, creating, developing and optimizing blockchain protocols, concepts, ideas and data. Sometimes this set of people craft the architecture of blockchain systems and develop smart contracts and applications that live on blockchain technologies. They build features and interfaces, as well as client and server-side applications, and develop secure blockchain technology.

Dapper Labs, the NFT company and creator of the Flow blockchain is a good example here. The company, made up of co-founder Roham Gharegozlou and persons like Mack Flavelle, Dieter Shirley, Kim Cope, Layne Lafrance and others, came into existence in 2017 when they thought to put a cat in the blockchain, and quickly set out to build the first blockchain entertainment company, powering a consumer-focused Flow blockchain that supports digital collectibles. This was how CryptoKitties was created.

Recently, there's begun an exodus of Builders opting out of big tech companies to found, co-found or join the building of crypto projects. The vice president of Amazon Cloud Computing, for example, left to join Unstoppable Domains, the startup selling blockchain website addresses. The head of the crypto division at Meta (Facebook parent company) left too to start his own crypto project.

Coming to our African crypto space, a lot still needs to be done. In the past, there have been quite a number of crypto projects and startups. While some are doing well, some are almost non-existent at the moment, and unfortunately, many have fizzled out. Kobocoin, Muna, Quidax, Busha, etc. were started by different Nigerians, Golix Coin was initiated by a Zimbabwean, DafriXchange and SafeBank are both South African-based crypto projects.

As crypto becomes mainstream across Africa, there would need to be a lot of people playing in this layer as Builders, creating companies and startups, forging the frontiers of crypto development across the African continent.

Skills required: To be able to play in crypto as a builder, you need to be able to at least conceptualise ideas, have some technical capabilities, know-how the technology behind crypto works, or have some coding and software development skills. You also need to be highly security-aware and have knowledge of smart contracts and debugging. Knowledge of cryptographic protocols, public-key cryptography, elliptic curve signatures, cryptographic hashing and Merkle proofs are also useful.

What you can expect at this layer: As a builder, you will mostly be involved in developing crypto protocols (how they should be, feel and look like), the design of consensus protocol and other high-level decisions and development related to blockchain technologies. Part of which may involve building decentralized applications, software or companies. You are a builder, building things for crypto would be what to expect.

Layer 2 - BACKERS

This layer encompasses a lot of financial capital. This is where you find VCs and companies focused on funding and investing in crypto projects. For this category, a huge capital base is their biggest advantage. Andreessen Horowitz (a16z), Sky Mavis, Digital Currency Group (DCG), Titan Ventures, CryptoLife Capital etc., are some examples of backers.

When a crypto startup isn't ready to go public, it usually seeks VC funding. One significant advantage of receiving venture funding is that it lends legitimacy to the crypto startup. This legitimacy has the potential to attract additional funds from retail investors.

Once a project is conceived, depending on how large it is or needs to be, it is often required that some funds are pumped into that idea or project in order for it to go from ideation to execution and adoption. Venture capitals come in handy here.

Messari, CoinList, Blogs
Messari, CoinList, Blogs

A recent analysis of 15 different top crypto projects shows that Backers made up 33% of overall funding, suggesting projects gain good from having Backers.

It is important to note that crypto venture capital is not the same as traditional venture capital because all parties involved do not always fully understand crypto or blockchain. There are numerous existing tools, software, vendors, and providers in the normal VC world. Many of these solutions do not yet exist in crypto, so Builders will still need to develop many of the tools for Backers to manage their venture capital operations.

The African cryptocurrency industry is still in its earliest stages, and there is plenty of room for expansion. Many venture capital firms recognize that crypto is the future, and they don't want to miss out on what could be the greatest investment opportunity of our time, so they are beginning to bet on crypto startups.

However, if a crypto company decides that venture capital is not the best funding option for them, they can look into STOs, ICOs, IEOs, and IDOs. Initial DEX Offerings are the most recent fundraising tool for crypto startups. Decentralized exchanges (DEXs) of course are the foundation of decentralized finance (DeFi).

Skills required: VC fund managers spend considerable time reviewing thousands of projects to determine growth potential. In that sense, to play here, you need to be money-savvy, have some smart researchers, look at the hiring process of crypto startups, if they have a solid business model, and of course, their marketing.

Layer 3 - BENEFICIARIES

Initially, I called these people “BACKSTAGERS” - because they get information on a project earlier than the majority of people. Later on, I decided to name them “BENEFICIARIES” because they simply are the first movers of any crypto project. These are people who get info on a project before it goes public and some rewards or parts of the project are allocated to them by the project team.

For this layer, let's partially describe them as pre-sale investors whose early access to information is their biggest advantage. And in some ways, they may influence the utility or production capital of a project. And sometimes, they come in as third-party developers who rustle the use case of the project.

This is where crowdfunding platforms help crypto projects. From DAOs to DeFi, these resources help projects bank on the crypto community if they cannot get Backers to back them. And there are platforms that exist simply to fill this gap.

What you can expect at this level: To play at this level of Beneficiaries, you would need to be able to make an early move on innovation. Beneficiaries, just like Backers, sometimes don’t have full information on crypto projects before moving in.

Layer 4 - BOOSTERS

When a project is about to go onto public sale, there’s usually a need for people who can bring attention and awareness to that project. I like to refer to these people as “Boosters”  — because they provide the initial momentum for that project to gain success.

An example is Bluezilla, which specializes in incubating and accelerating the commercialization of blockchain projects in their early stages. Interestingly, Bluezilla operates both as a Backer but with in-house developers, designers, marketers, influencers, traders, legal and launchpads which makes them a Booster (you see the combo?).

Some launchpads are pivotal to the success of many crypto projects. GameFi, ADAPad, Seedify, DAO Maker, BSCPad, Tronpad, OxBull, KSCPad, etc.

As crypto startups start to pop up in the African crypto space, there would be a need for crypto agencies like Bluezilla and these launchpads —  Boosters who will provide human capital, translate the useful applications of projects, or offer third-party developments, marketing and intellectual property protection for Builders.

As Chris Ani wrote, “If you can build a crypto marketing agency, you will make tons of millions in 2022 and beyond... It is a scarce niche, especially in Africa.”

Layer 5 - BROKERS

Traditionally, brokers are financial service companies that provide traders (the Businessmen layer) access to a platform for buying and selling cryptocurrencies. And in some situations, especially in this report, hedge fund managers, exchange-traded funds (ETFs) or OTC traders who exchange a token for a commission can be classed as Brokers. This layer includes lenders, holders, borrowers, and exchanges.

Two things worth mentioning about this layer:

Specializations: Crypto will be so multidimensional in 2022 onwards that there will be a strong need for specialization among experts in each field. The days of “being in crypto = knowing everything” are numbered (Zaheer). Brokers will need specializations to distinguish themselves from the crypto herd.

Economies of scale: The magic power of crypto comes from it being an enabler of Massive Open Distribution of Economic Values -- i.e. MODEV. Bitcoin was the 1st MODEV project in that it allowed a community of people to claim values out of thin air & openly send/receive those values (Tascha). Economies of scale here, then, will mean an increase in Brokers’ levels of output.

Layer 6 - BUSINESSMEN

The everyday activity of any crypto project, especially the ones that have tradeable tokens are handled and influenced primarily by the “big” traders or “whales,” the professionals and the capitalists. The price of a project is their biggest advantage. They look for opportunities to buy low and sell high  — theirs is the mantra: trade and make money.

This layer is made up of crypto communities, traders, buyers, sellers, and liquidity providers.

Skills required: Fundamental analysis, use of crypto apps and interfaces, technical analysis, etc.

What you can expect at this level: This is where you need to trade and make money. It can be a great entry into crypto. But as it’s now obvious, this layer is at the base of the ladder. So, if trading is currently your focus and you have the necessary skills and intelligence to climb up the ladder, then you don’t need to waste time at all. Just do well to grow as fast as you can.

BUILDERS AND DEVELOPERS WILL CHANGE THE WORLD. LITERALLY.

Just scroll up and take a look at the layers of people in crypto again. At the top are the Builders - developers, designers and the likes. Those who create the projects. They will never run out of fashion as long as blockchain exists. While other layers of the ecosystem may change over time as ideas in the crypto space develop, I can confidently tell you that BUILDERS will remain. This is because almost on a daily basis, you would hear about a new blockchain project from different parts of the world. This is just like any other industry; you hear about new startups every now and then.

As the tech and parameters required for this ‘brave new world’ continue to evolve, our future will most likely be shaped by developers - be it software developers, idea developers, tech developers, product developers, platform developers, and the likes.

Furthermore, your ability to utilize crypto will be determined by the ease, intelligence or clumsiness of such developers. This makes me ask: when can you begin to contribute?

WEB3, NFTS & THE INTERCONNECTED MULTIVERSE

First, let’s take a look at this scenario: As a researcher, creator and coach, let's say I decide to host a class to teach everything I know about creating massive transformations in your life in a short time and I decide I only want a certain number of students in my class per session.

As we know, before now I would have to ensure my students pay using one of these payment methods; bank transfer, USSD code, credit or debit cards. And even after payment, they would still need to create an account online in order to access the class.

Today, everything is easier and I could simply create “access tokens”, which serve as financial incentives for my students. More importantly, this method takes advantage of their existing digital identities so they won't have to go through the stress of creating a NEW account just to be part of my class.

Since there would be a limited number of access tokens, the price could increase, just as expensive as the class itself could be priced.

And, if I decide to take on a larger number of students, there would be more tokens accessible for them but the price may be lowered as there would need to be more people involved.

Think about that.

Now, what if I decide that once a student enrols using that access token, they submit the tokens back to me at the end of the class in order to receive their graduating certificates, which are also recorded and stored on the blockchain. In addition, this would also mean that there can't be counterfeit or more than one similar certificate.

Again, think about that.

In other words, the identities of the students are only known at the level of certificates, their privacy is totally maintained, and there is no heavy dependence on the local price of the students’ fiat currency. It is all whatever price the access token is valued at the time of enrollment.

This idea summarily is what NFTs (Non-Fungible Tokens) and Web3 mean for education (now emerging as ‘learning DAOs’): A decentralized, non-fiat-dependent way to access and do stuff on the blockchain without having to be subjected to unnecessary loss of privacy, a curriculum that does not excite participants or rigorous activities post-study.

Furthermore, Theodora Chu adds, "Imagine a scholarship fund where the donors to the fund lock up their donations in the smart contract. You each then vote on who should receive the scholarship, and the outcome of the vote automatically splits the funds and sends it to the winners without anyone needing to interact with the other donors, verify the vote, or wait for everyone else to finish voting to manually write the checks."

HOW TO FIND YOUR FIT IN THE CRYPTO & BLOCKCHAIN EVOLUTION

Credit: Sergey Vasin, Medium
Credit: Sergey Vasin, Medium

For every aspect of tech and change, there is now a rapidly-growing blockchain technology competing for that market share. Many legacy businesses and brands are already seeing significant shifts from the normal way people interact, live on and use their platforms.

Historically, the internet reached a tipping point of explosion when it got to 1 billion users worldwide. Since the number of global crypto users reached only about 106 million as of January 2021, the global blockchain market is projected to go up to $23.3 billion by 2023 as more adoption happens. The market cap of all cryptocurrencies is expected to go up to $5 trillion. With these projections, now is a perfect time to start thinking of how to play a bigger game in this space as it grows. Start thinking of the tech that will be needed as adoption continues. Crypto will become so multidimensional that specializations will begin to emerge. Think of your specialization ahead.

Think in terms of:

  • Social connectivity on Web3 and the metaverse: Indorse, Foresting, Choon, Me We, Steepshot, DTube, Steemit, Experty, Springrole, etc.
  • Decentralized Finance Systems: Compound, Maker
  • Precious metals: Bitcoin, Chia
  • P2P Payments: Libra, Celo
  • Messaging platforms and apps: MobileCoin, Me We, 3Box
  • Crowdfunding: Coinlist, Republic
  • Hardware: Trezor, Ledger, SafePal, Mining Hardware ASICs, VR headsets, etc.
  • Collectibles: OpenSea, CryptoKitties,
  • Identity: 3Box, DKYC,
  • Distributed Database: Graph
  • Marketplaces: CryptoCribs, OpenSea, Rarible
  • Crypto Exchange and Wallet Service
  • Domain Name Services: ENS, Unstoppable, PolkaDot, Handshake
  • Browsers: Brave, Metamask
  • Research and Analytics
  • Learning and education (even in the metaverse)
  • Decentralized Storage: Filecoin, Arweave, BTT
  • The list of developments can be very long… This is to get your thinking caps on.

How Do You Get Started? 2 Quick Ways.

  1. Get a job or offer a service in the area of your expertise. There are lots of non-technical roles in crypto too. One that comes to mind is content marketing. Let’s say you already create content in some form, a smart way to get into this ecosystem is to become a crypto content creator, either as a service or to launch a business. Social media and internet growth have opened the door for participants to share their thoughts and expertise globally. Virtually anyone can learn vast amounts of information about the crypto space through YouTube, Twitter and other methods, and then add their own expertise to the equation by providing their unique content. In case you need to know, Vitalik Buterin started out as a content creator for Bitcoin magazine before he began to challenge the improvement of Bitcoin, which led to the creation of Ethereum (classic).
  2. Transfer your skills and disciplines into crypto. If you have professional background and disciplines such as legal, taxation, accounting and regulatory services, start creating solutions for crypto companies. Help them register in non-regulated zones, become a compliance officer, become a crypto lawyer, accountant, legal adviser, tax officer, or Web3 attorney. There is a huge need for legal expertise as it pertains to blockchain and digital finance, but very few people with the knowledge and qualifications to meet the demand. You can even start as a Community Management Service for crypto as you manage the community of crypto projects.

Let me know how helpful this article has been to you, and if it ignited some new ideas in you, please share with me. You can tweet at me @iamdayosamuel on all Twitter.

PS: This is my first public article on Mirror and crypto generally. I wrote this fall of 2021, but I’m making it public in 2022. I will like to continue to write here, consider coming along.

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