Cryptocurrency and ICO related scams have been on the uptick, in the first 5 months of 2018 alone, $1,61b was lost to scams and hacks. This results in two major issues for the cryptocurrency and ICO space:
- Governments are paying closer attention to cryptocurrencies with the intention of finding a way to regulate them.
- Scams are driving crypto newcomers away from the market
If the issue of scams and bad actors is not addressed by the crypto market internally, regulation will likely become the go-to solution for solving these problems. Since the current best practice steps presented to token buyers are very basic (research the team, read the whitepaper, check the roadmap & token metrics, and join social accounts) it doesn’t allow true novices to safely enter the space without risking that they might fall into a scam.
Regulation has tended to be reactive as opposed to proactive; and with no end in sight on the resourcefulness of scammers, the cryptocurrency space is at risk of being heavily regulated or worse, forgotten by the public as soon as a big enough scam occurs. We are in the business of not only keeping crypto alive — but thriving to include the mainstream audience — people who stand to greatly benefit from what crypto and blockchain have to offer.
Government attempts at token regulation have proven to be flawed. Firstly, because tokens are built with technology that is specifically designed to be resistant to censorship, an outright token ban isn’t possible if it’s properly decentralized. Secondly, there is no precedent for crypto: governments should allow technologists in the industry and the market itself to self-correct and offer solutions to evolve the market. If regulation happens too quickly, the industry risks having its potential growth stunted.
Simply put, the SEC attempting to regulate tokens is like the FCC trying to regulate email.
Since governmental solutions don’t work, and novices relying on the trustworthiness of businesses, tweets from ICO’s, analysts or money-driven influencers isn’t reliable, the best solution to combat these problems is to use the power of the blockchain technology itself to create a safer ecosystem for everyone.
Token Curated Registries (TCR’s) are a potential solution to this because they provide immutable data where the organization behind the registry is incentivized to maintain a popular, reliable and high-quality list. Simply put, using blockchain; companies, experts, and others acting in the space can create a trackable, traceable “Reputation” on the Blockchain.
Menlo One, a framework for building decentralized applications is applying this concept of Token Curated Registries by creating an ICO marketplace which uses TCR’s in the Guilds aspect of their platform, the first known use-case of TCR technology.
Guilds are a type of DAO (Decentralized Autonomous Organization) that are incentivized by the platform and upcoming ICO’s to conduct due diligence and incentivizing experts to assess the credibility of a project and give feedback to the group. Over time, Guilds (and their experts) earn reputation (based on Menlo’s Proof-of-Reputation algorithm) which allows them to earn more Menlo Tokens for their input and opinions — provided that their output is fair and reliable, as voted by the community.
While this is not a new idea, the application and inclusion of measuring performance with proof of reputation create the foundation for people and groups to build a verifiable reputation while earning money. It also provides solutions to its users; allowing users to distinguish reputable opinions from untrustworthy ones. Here’s the best part: the POR and TCR technology used in Menlo One’s platform is open source and can be used by developers to build any new decentralized application (dApp). Imagine a decentralized music marketplace, or restaurant review & booking site where users get paid in crypto to upload their content and to leave reviews, the use cases are limitless.
While these technologies are only a small aspect of the Menlo One ecosystem, the stack presents a solution to a path of resistance in the adoption and acceptance of tokens and decentralized applications. By presenting self-regulation and governance tools that protect users from bad actors, Menlo One aids the entire blockchain and crypto space itself in the process of going mainstream.
Check out their stack, which is currently available on GitHub.