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Crypto communities: why they matter more than ever
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I recently spoke to Dong Sun Lim, Community Manager at Nonce in Seoul, and Koji Higashi, CEO of HashHub in Tokyo. They shared their insights on crypto communities in Korea and Japan respectively, and why building from the bottom up is the only way forward.
“Community Development Manager." What does the term even mean?
Dong Sun Lim explains how his role at Nonce, Korea’s biggest blockchain co-working and co-living space, encompasses anything and everything to do with creating a value-driven blockchain community.
That’s quite a mouthful. Let’s start with unpacking the phenomenon of blockchain communities, and why the trends we’ve seen over the past year or two are promising for the industry as a whole.
It’s said that the only advantage humans have over our counterparts in the animal kingdom is the ability to collectively organize. It’s instinctual to form groups based on common identity, shared values and mutual interests. The mid 2000s saw the rise of community-led marketing, where big brands started leveraging the power of social networks to improve search engine optimization and organic customer feedback. This shift in behavior fundamentally changed the relationship between businesses and customers. Effective marketing has become a bottom-up approach where the best brands are the ones we build, together.
Effective marketing has become a bottom-up approach where the best brands are the ones we build, together.
In the crypto industry, we’ve seen the power of network effects achieve both good and bad. The ICOs of late 2017 showed the world that venture capital, too, can be decentralized. Theoretically, anyone can fund any project in the world without ever meeting its founders, or even their fellow investors. In true Silicon Valley style, this has sped up the pipeline to capital and increased access to innovation for everyone. At Liquid, we saw this when we raised over USD105 million in just a matter of days. Our community, spanning over 50 countries, is what made that success possible.
On the other hand, networks can also spread contagion. Thousands of people have been the victim of scams. Countries like Korea suffer from an industry dominated by herd mentality, where people are willing to be directed in how they invest based on information coming from a single source.
This is where communities like Nonce come in. Nonce “connects trustworthy people building trustless technologies”. They’re a co-working and co-living space that brings together people from diverse backgrounds - artists, developers, entrepreneurs - who are involved in blockchain projects.
“Technology doesn’t solve problems - people do,” says Dong. He believes that far too much emphasis has been placed on the revolutionary promises surrounding blockchain technology and cryptocurrencies, yet the reason we’re seeing so few of them actualize is that we don’t spend enough time cultivating the kind of communities that do more than just talk - the kind that collaborate and actually create.
“Community is about ownership - feeling not just that I am part of something bigger than myself, but that I have some skin in the game. It doesn’t matter so much whether that stake is economic or not - in fact I think non-economic stake (e.g. reputation) can be a much bigger motivator.” ~ Lane Rettig, Independent Ethereum Core Developer.
Dong points to the Korean market as an example. People are very quick to jump on the bandwagon, but few of them question what they’re really signing up for. If it isn’t following the promise of quick monetary gains, then they’re lured in by talk of “decentralization” and “trustless systems”.
“When cryptocurrencies shot up in December 2017, Korean exchanges were sometimes trading at 40% above the global price. Do you know what people were saying? The sentiment was that this was a good thing because Korea was ‘leading the world’; the mania was to be celebrated because for the first time, this was an industry where we were ‘number one’. The rhetoric was ridiculous!”
The biggest issue in the Korean market is information asymmetry. “Unfortunately, our society listens to those in the majority. Avarice is hard to eradicate.”
The Korean market is a perfect example of what happens when networks are extremely tight, yet their connectivity also leads to the rapid spread of contagion.
Regulation in the crypto space
Koji Higashi, on the other hand, is struggling with another problem: the lack of community, or more specifically, the lack of targeted communities. Regulation is a hot topic in both the Korean and the Japanese markets.
“People ask themselves, ‘Is what I’m building even going to be compliant?’. There are many obstacles to small developers and entrepreneurs in Japan - they must consult lawyers, accountants and tax officers while overcoming the language barrier. We need to learn to share resources more efficiently or we are not going to be able to compete with the global industry.”
HashHub is located near the University of Tokyo and has a similar model to Nonce. They are trying to get more university students involved from an early age and provide mentoring and business support to the projects that work with them. Furthermore, HashHub is building its own products on the Bitcoin Lightning network.
“We want Japan to become a crypto hub. This requires more synergy between big companies, developer communities, and the public in general. The big guys who are trying to enter the space will struggle if they try to do it alone - they need help from crypto startups.”
Helping to bridge the gap between big companies, developer communities and the public in general could be where a company like Liquid comes in.
Koji and Dong both agree that the biggest challenge of running a crypto community is balancing an efficient business with sending a clear message to the public. These are more than just co-working and co-living spaces - they are community development models that are trying to solve some very real problems in the blockchain industry: abstraction, inefficiency and lack of deliverables.
At Liquid, we’ve seen how the most successful ICOs are always the ones with the strongest communities, because these networks are the foundations of good governance and faster innovation. It’s time to collectively evolve beyond perceiving value in just monetary terms. The economic, social and political implications of this technology can be huge. If we want to start enjoying the fruits of these promises, it’s time to collaborate and create.