This post diverges from my normal format. It’s long form (as in refill your cup of coffee now.) And became a bit of a brain dump, but it’s an honest peek into the reality of working in a crypto startup.
Cryptocurrency is a technology (and now) an industry born out of the 2008 financial crisis.
Bitcoin was the first, which brought to life the blockchain.
A blockchain is a database. Yes, really, that's all it is. You don't need to care how it works for this post.
Throughout the rest of the article I'll use "crypto" to encapsulate blockchain, cryptocurrency, and web3.
I was "lucky" enough to join the industry right at the end of the COVID bull market. Then things took a nose dive. So you can blame me for the current and continued bear market.
After 18 months, I am leaving crypto (for now) and returning to the world of traditional startups.
I'll detail why you should and should not work in crypto. And also why I left.
Disclaimer!
I worked in a tiny ecosystem. Crypto has TONS of them - look at CoinMarketCap and doom scroll. The biggest are Bitcoin and Ethereum (duh). I did not work directly in Bitcoin or Eth worlds, athough I dipped into Eth here and there.
So this post only details a tiny slice of the crypto pie.
Each ecosystem is different and I'm unsure how much you can generalize my experience across the entirety of crypto.
The Elephant in the Room: Crypto = Scam?
Crypto has a stigma.
The equation: Crypto = Scam
And ponzi schemes, rug pulls, crypto bros, Jake Paul, and (the worst by far) Kim Kardashian.
This stigma existed well before the fall of FTX and Sam Bankman-Fried. But FTX's fraud made it worse because mainstream media loved it. My god, Shaq and Tom Brady were investors! A journalist's wet dream.
In my 18 months of crypto, I never once encountered a team trying to scam people. They genuinely wanted to improve the ecosystem and push the technology forward.
Nevertheless, the stigma is there. My company wanted to hire an SRE. I reached out to some good people in my network. The response? "I don't do crypto."
So the stigma is here to stay, I'm afraid. The harsh reality is there are people who will never accept it as a legitimate industry.
So if you're thinkng of starting a crypto company or hiring for one, you will have a limited talent pool. (On the flipside, this could be good for you. More on that later.)
The good news: Working in crypto did not blacklist me from traditional startups. I still had recruiter interest, although in interviews, they were more interested in my experience before crypto.
Get paid to work on open source
This was my favorte perk. You are paid to work on open source. Even if you're not contributing to a blockchain, there's plentiful opportunity to build tools around them. Tools that make it easier to index and search data or run and monitor infrastructure, for example.
Who pays for OSS?
Many blockchains have foundations or treasuries. When a blockchain comes online for the first time, some tokens are set aside. Or, the foundation takes a percentage of all rewards as the blockchain processes transactions.
This model is a unique feature of crypto. The money you get is a grant. You don't hand over shares of your business. You keep full control.
There are downsides, of course. Namely, is this model maintainable long-term?
It's not guaranteed the foundation will renew a contract. No guarantee of recurring revenue. You are forced to:
Think of new features for existing projects
Create new open source projects
Who controls these funds? Well, funny you ask. It's still humans. Not algorithms. Not exactly the spirit of decentralization.
And what happens when a few humans control a lot of money? Politics naturally.
Remote is the norm
Crypto startups are remote and distributed almost by default. Makes sense given the decentralized nature of the industry. I collaborated with people in Europe and as far as Indonesia. (I'm based in the US.)
So you won't find return to office mandates because there never was an office in the first place. (And I saw tons of innovation with teams spread across all sorts of timezones. So the argument of "you need people together to innovate" is a pile of horseshit.)
I, for one, never want to return to the office. Working in cryto almost guarantees it.
More recruiter outreach
Another benefit is more optionality.
Soon after I added my crypto job to my Linkedin, I saw an influx of blockchain recruiters hit my inbox. I never used to draw attention from blockchain people.
And, even in the bear market, crypto salaries are high. I saw minimum $200k base. A couple were $250k and even one was $280k total TC. I don't know where this wealth comes from. The bear market decimated many coins - many lost >90%, some dropped to 0. My only guess is a leftover stash from the COVID bull market.
Keep in mind, the above is subject to the availability heursitic. I'm basing this observation on my limited personal samples.
The most common job descriptions wanted protocol engineers. I'll touch on protocol work later.
And such is the advantage of a smaller talent pool. A blockchain engineer has higher demand, thus driving up salaries.
Who wants to be a millionaire?
I know two people who earned millions during the COVID bull market. I'm sure I worked with more. One of them was making $25,000/day (yes PER DAY) yield farming at the height of the bull market. (Google "yield farming". It's like real farming except you grow magic internet beans nobody can eat.)
I admit, the financial upside was enticing. (Then the bear market reared its ugly head.)
And here's another important difference between crypto and traditional startups:
Instead of vesting stock options for equity, some companies offer tokens.
Tokens are better than options. (That's not a typo.)
Options are illiquid. They're worthless until a liquidity event - an acquisition or IPO, for example. Tokens list on an exchange somewhere, not Coinbase usually, but a decentralized exchange. You can trade and sell as soon as they land in your wallet.
Options fall into preferred or common stock. Investors get preferred stock. When a startup sells, preferred stock holders get paid first. Us lowly employees get common stock. We get the leftovers. There's no such distinction with tokens. A token is a token.
Options are subject to black magic accounting. (Well, black magic to me.) I once had a startup sell. (Hooray! We made it!) But every common stock holder got zilch. (WTF?) Again, a token is a token. The economics are transparent. You can find inflation rates, total supply, total value locked, etc. Of course, a blockchain could screw up its economics, but it won't happen behind closed doors.
Academics are idiots
I am borrowing from Nassim Nicholas Taleb, that many academics are idiots. (See his definition of IYI, Intellectual Yet Idiot, from his book "Skin in the Game.")
The type of academic is people who are "book smart", have fancy degrees, know "theories", and speak in big words.
And indeed, my ecosystem was full of them. They knew the theory of blockchains, cryptography, and distributed systems. And they knew it well.
But they had no idea how to write production-grade, maintainable software. And yet, they were in charge of writing production-grade, maintainable software.
And you can't tell them they don't know what they're doing because these PHD-types think they're smarter than you.
And guess what? They are smarter than you. Crypto is humbling because there are many brilliant people...when it comes to cryptography and blockchains.
When it comes to mature software, that's a different story.
My ecosystem contained two core libraries you must use. You had no choice.
This is like forcing a musician to use a single guitar. Except, a PHD in music theory, who has never once played in front of an audience, designed this guitar. And you, dear performer, must use it. No other option.
These libraries were alpha-quality at best - inconsistent logging, random panics, convoluted test suites, missing test coverage, confusing serialization/deserialization primitives, questionable design patterns, and non-idiomatic code. Overall, piss poor DX. An ocean of tech debt.
My standards are high, though. If you compare these libraries to other software in crypto, it's probably "good" software. But if you zoom out and compare it to all OSS libraries, it's trash.
What's worse, I was powerless to fix it even though they were open source. Disparate tribes were in charge. You must convince the tribe in charge of any changes. And the chiefs were usually academics, not veteran software engineers.
Crypto engineering
In my brief tenure, I saw 2 main types of work:
1. Infrastructure
2. Protocol
These aren't the ONLY categories, but they dominated my ecosystem.
I'll address infrastructure first because it's easier to explain. All blockchains rely on network effects. In fact, a blockchain is a literal network - disparate servers connected to each other via peer-to-peer connections. Unlike traditional web companies, you rely on others to host your software.
Like any server, somebody has to host, monitor, upgrade, and maintain it.
The second is protocol work, which is akin to product work in a traditional startup.
What, pray tell, is a protocol?
In crypto, the mantra is "rules not rulers." Algorithms drive everything. That's why you don't need 3rd parties. If I put money in a slot machine, I trust the casino (the 3rd party) to pay me if I win. But there's nothing stopping them from saying "Congrats on your jackpot. We're not paying a dime." Sure, I could sue them and write an angry tweet, but that's a lot of hassle for me.
Instead, a protocol engineer implements a Slot Machine Protocol. I submit a transaction for a "slot pull." A smart contract executes some code. The result is 777 - a jackpot! The smart contract deposits a bunch of token into my account and records the new state in the blockchain. It's all algorithmic. Code cannot change its mind at the last second. What's more, most smart contracts are open source and viewable on a blockchain. So you can inspect it and ensure the fairness.
Unfortunately, my reality: Protocol work was glorified programmer madlibs. Some academic writes the protocol spec and you, code monkey, must fill in the blanks. Not much room for creativity.
Crypto is still about finance
The dream of blockchain is a beautiful one that has nothing to do with finance. A free internet, where you own your data. Anyone can take part in the network. No gatekeeping by Big Tech or government or spoiled billionaires.
But, crypto is still much ado about finance: earning interest, lending, exchanges, arbitrage and the like. And, hard as I try, I'm not interested in that type of work. I know, finance makes the world go round. But building products that move money from point A to point B isn't exciting to me.
Volatility
In 2023 the SEC went full court press at all crypto (except Bitcoin). Ethereum is a force of nature. I went to an Eth conference and it was packed with people wearing unicorn onesies and vendors selling software products I didn't understand one bit. (But hey, they handed out free swag with cute mascots.)
But if the full force of the US government comes after you, do you survive?
This is NOT FINANCIAL ADVICE, but Bitcoin is the only one safe from the SEC. It has nothing to do with the technology. Bitcoin's founder, Sathoshi Nakamoto, vanished without a trace (or he never existed in the first place). The SEC's power is they can sue you into the next ice age. But with Bitcoin, who do they sue? There is no central entity they can target. All other coins (especially Ethereum) there is a founder, foundation, development company, or some other entity the SEC can sue.
The future is, as always, uncertain. In the US, Republicans (for some reason) love crypto. And if a Republican is the next US President, who knows how 2024 and beyond will look.
Crypto as an industry is will be fine. But maybe absent from the US one day.
You will have to embrace volatility.
A crypto startup is pretty much like any startup
I was sad to discover crypto startups act mostly like regular startups. One of the chief reasons I went to work in crypto was the hope: "This time it will be different."
At the end of 2021 (the dusk of the bull market), I saw a company raise millions without sacrificing a single share of their company. They pulled off what's called an IDO - Initial Dex Offering. Or, Initial Decentralized Exchange Offering. It's like an ICO - initial coin offering, but the coins land on a decentralized exhange immediately. (ICOs attributed to scams because founders pinky sweared they'd list on an exchange "soon.")
Anybody could invest (I threw in a couple hundo), not only VCs. (My investment is now worth less than a half-eaten ham sandwich. But let's not dwell on that.)
My point is a company was able to raise capital without groveling at the feet of a Silicon Valley, 2-comma club soy boy (aka a Venture Capitalist). No term sheets. No dilution. No board meetings.
But, turns out, I witnessed the exception, not the rule.
VCs, stock options, Series A/B/C, and so on are common with crypto startups too.
So should you work in crypto?
I'm going to give you an engineery answer: It depends.
You will thrive if:
You have patience for immature software.
You can stomach extreme volatility.
You have patience in general.
And why did I leave?
First, I was doing too much infrastructure work. (I'm not a DevOps engineer, but I play one on the internet.) Doing DevOps fulltime is not my jam.
Second, I love to build products. Give me a problem and let me solve it. Don't tell me how. Let me use building blocks that I think are best. Unfortunately, I was prescribed the building blocks. And they sucked, and I was powerless to change them.
I'm not anti-crypto now by any means. I may return one day. I was simply not a good fit for the environment. A fish out of water. A Bezos out of his yacht.
I'm also grateful for my time in the industry. I had to live in an environment with many stressors, little control, and somehow ship code. It changed my perspective. And I was lucky to meet and work with many talented, kind people.
But, for now, I want to get back to the product work that I love, which is why I'm returning to the traditional startup world. It's far from perfect, but it's where I belong.
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