How You Can Assess the Social Value of a Crypto Project – A Three Factor Model

Bitcoin quickly grew due to a fundamental reason: Bitcoin had a high social value. Bitcoin was governed by Math while all official currencies were governed by human politicians. When Bitcoin saw the light for the first time, at the same time a novel system of governance was born that, one that we have only recently begun to understand: decentralized governance. This type of governance has changed our way of comprehending the world in such a broad and essential way that we are now rethinking all our political forms, all our economic paradigms and all our ways of organizing social life.

Bitcoin was only a first application for the technology of the decentralized Blockchains. This technology has the outstanding characteristic that it allows people to make agreements, to communicate, to coordinate actions and to make decisions with the full confidence that all participants will respect the rules, and will carry out actions that benefit others and will never betray the rules just to procure their own benefit to the detriment of the welfare of other people.

Bitcoin represents the first application of such trust technology. Later, other Blockchains were born, such as Ethereum, who began to apply the mathematical algorithms to give sustainment to socio-political and legal organization by basing them on top of the Blockchain, in order to lay the foundations for new forms of decentralized institutions. Ethereum project itself functions as a mega-corporation within which hundreds of multi-million dollar corporations live. And its governance is decentralized. An human being, indiscriminately, can participate in Ethereum, without distinction of ethnicity, sex, gender, religion or political party.

Currently the number of projects that constitutes the universe of the Blockchains is already at the level of thousands. If you count only projects that have their own currency or token enrolled in the CoinMarketCap index, you get a number of more than 2 thousand projects and 2 thousand coins, in which the citizens of the world can invest. For millions of people, however, it is extremely overwhelming to try to evaluate all those thousands of projects. People follow analysts. But most analysts try to be objective and not to influence potential investors too much. This, however, can contribute for crypto novices to feel even more lost or disoriented.

One of the various fundamental questions that investors should consider when studying a project – in addition to the classic question of whether the price of an asset is going to rise or not – is the following: what is the social value of this project? Or, in other words, in what way does this project serve to improve people’s lives? Starting from this fundamental question, in the following paragraphs we will explore a simple model of evaluation based on three major factors to take into account when judging a project’s value for real life: the philosophy of solution-development, the vision of mass adoption and the solid understanding of Decentralization.

1) FACTOR I: The philosophy of solution-development – Is the project developing new Blockchain technology and implementing new solutions for real world needs?

The first question that an investor, novice or senior, will always want to consider when exploring a project to know about its fundaments, is the following: is this project or its ecosystem developing new solutions that benefit the lives of people? In other words, every sincere investor who is interested in the progress of its own society and its own world, will be concerned about the potential that a project has to solve real problems for real people through a new product or a new service.

A project may seem excellent. It might even have good ideas to provide services to people. However, it also has to prove capable to pass through some filters in order to be considered a “crypto project” or a “Blockchain project”. One crucial question here is this: is the project conscious of the nature and importance of decentralized Blockchains and how their disruptive technology offers opportunities to benefit humans around the world? It is not enough for a project to use the word “Blockchain” frequently. It is important that the mission and the vision of the project be based on an understanding of the value of decentralized technologies for human societies who have been subjected to a millenary history of centralization.

If you are studying a new project and you are interested in itsr proposals, then study this project with the ambition to find answers for the following questions too. Is the project actively thinking to purse the development of the Blockchain for the benefit of humankind? Are the core ideas of decentralized Blockchains part of the identity of the project and the Team? It is important to study all the written materials, videos and audios that a project publishes. Each text and each phrase that this project publishes represents a manifesto of the project towards all humanity. In these manifestos the project demonstrates its mentality and its quality. Likewise, it is essential to visit the official channels where you can talk with the team. The contact with the team is very valuable too to be able to answer these questions.

2) FACTOR II: the vision of mass adoption – Is the team understanding the importance of Mass Adoption of all good Cryptos for the benefit of people around the world?

It is one thing to understand that the new information technologies represent a substantial probability of earning a lot of money. And it is another profoundly different issue to possess the higher ability to understand that decentralized technologies such as Blockchain and cryptocurrencies are generating never-before-seen new opportunities for billions of people who live without hope all over the world. The social value of a project is not the same if it has no tangible social awareness on the potential of the Blockchain to benefit the less fortunate. A project that only understands that its currency will reach 20x or 100x within a period of time, leaves a lot to be desired. Deserved gainings are always welcome and worth celebrating. But, social value is above the happiness of a few.

For this reason we have to prepare serious questions for projects, such as the following. Does this project have, as an essential ethical aspiration, that more and more people around the world use cryptocurrencies as a means to distribute wealth, because these new electronic currencies can empower these people in many ways? Does the project understand how decentralized cryptocurrencies have a clear potential to benefit billions of people who have limited access to financial assets because of the unfair distribution of wealth? If the predominant narrative of a project is centered only in promises for big profits, maybe the project is not really seeing the big picture of how people can be benefited by using the most modern types of money.

It is, above all things, advisable that we make a critical analysis of each project. To each one we have to ask: is this project consciously and actively pursuing mass adoption of crypto? Is this project even conscious of how much mass adoption of crypto can benefit millions of people who are victims of the inequality typical of centralized economies? Is this project capable to see how the legacy financial institutions have created a pyramidal system where only a very few humans on the top are born with plenty of opportunities for a successful life? Is the value proposition of this project linked somehow to solutions to the essential socio-economic necessities of thousands of people?

3) FACTOR III: the understanding of Decentralization – Does this project speak natively the language of decentralization?

Does the project understand how open, public, censorship-resistant, immutable, tamper-proof, trust-less Blockchains are the solid foundation for a new kind of decentralization and how decentralized communities can produce much more wealth for their members than traditional centralized human groups? This question is a must. We should use this question as a filter when we are studying a project and trying to discern if it is a positive project or if it is not. A kinder way to ask the same questions would be: is the project engaged in a serious reflection on what Decentralization is and why it is important for humans around the globe?

Let’s not save time in this aspect. This is a crucial aspect. If you believe in crypto and you want our new generations to be able to live with more hopes for the future, then you would be interested in asking to each project: does this project pursue decentralization in a conscious and active way? Does the project give clear signs of understanding decentralization in a serious insightful way? Is the project making efforts to represent some advancement in the field of Decentralization at the philosophical and social levels?

If I invest a little of my time in studying the WhitePaper of a project, in analyzing the business proposal, in observing the form of governance that the project has, in studying the project code in GitHub or directly in the Blockchain; or if I invest my time in studying the software of the project and in seeing if this software exhibits some degree of decentralization, or if the project only constitutes a traditional private company disguised as a decentralized structure, I am going to become a powerful filter against false projects that aren’t really decentralizing anything. The projects that do not embrace the goal of reaching some level of decentralization, are false crypto-projects. They do not create real opportunities for people. Either they are ponzi-typed pyramid schemes or they are simply scams.

This article has explored a three-factor model that enables any person — regardless of the level of knowledge about the cryptocurrency market and regardless of the degree of comprehension of technical details about the Blockchain —, to assess the level of social value of any crypto project, in general. Since 2009, with the birth of Bitcoin, human beings from all over the world, can say that there exist new legitimate hopes and new opportunities for the immense wealth of our planet to be distributed in a more equitable way. Blockchain and Crypto represent global hope. Political systems for centuries have generated a very high level of inequality and iniquity. Blockchains and cryptocurrencies might become an important part of the solutions. But we all must be diligent and judge each project, one by one, in order to be sure some are not just wolves in sheep’s clothes.