You’re smart - really smart - and you’re hungry to disrupt the financial world. You’re a brilliant coder. You see the obvious gaps within the crypto industry and seek to improve scalability, speed, and security. With the right adjustments, a few long nights, and the right lines of script it all comes together.
You have just created a coin.
But it’s not very different from 19,900 of the 20,000 coins that already exist… so what’s next?
This is the problem.
It’s a common tale, the genesis story of 99.99% of coins on the market. It’s the story that has proliferated in our space. A brilliant coder or group of coders collect their brainpower to create a solution in search of a problem.
I am not an entrepreneurial genius, nor can I create $SCOTT coin, but what I do know is that one of the necessary principles of cracking into any industry is finding a real problem and then creating a tailored solution - not the other way around.
Here’s an example:
If you have kids, you have probably seen firsthand how crafty they can be. Maybe they drew something unique, mashed up some Play-Doh into a weird shape, or tied a bunch of sticks together into an imaginative weapon. They can be creative little devils, but these aren’t life-changing innovations. What they made melts or falls apart by the end of the weekend. They made a cool toy and then went looking for a way to play with it.
The same principles ring true for many of the coins in our industry. When a creative genius sparks a weird concoction of code and out pops a coin with a clever name, it’s cool. But it’s not going to change the world, because it has no real purpose and it sure as hell isn’t built to last.
So here’s a question I pose to you.
Is the coin you love a solution looking to find a problem?
Or did the problem come first and your coin is the solution?
The former is going to fail 99% of the time, while the latter stands a chance to make a lasting impact. Bitcoin was designed to solve a particular problem and so was Ethereum. But can the same really be said for a random altcoin?
I doubt it.
As a long-term investor, all research should start and end here. It is the true litmus test for the possibility of future success. Most coins will be wiped out, largely for this simple reason. As creative and attractive as a coin may be, don’t fall in love with a solution looking for a problem.