Cryptocurrency Crash breaks Dream of Independence of Software Startups

Cryptocurrency Crash breaks Dream of Independence of Software Startups

December 7, 2018 Off By Maheen Hernandez

Several entrepreneurs in the software development field have been building a dream of independence around traditional financial institutions and related systems.  The software development community has believed that they are helping the rest of the world get out of the control of centralized authorities by creating thousands of digital coins over time.

ETCDEV has announced that they are closing operations due to funding issues.  Of note, it is the startup that led to the development of Ethereum Classic, the top 20 coins with a market capitalization of nearly 400 million.

ConsenSys, the largest of the crypto-related startup are reorganizing, and they are reducing their workforce by 13%.

Most of these crypto reliant companies are struggling because they kept their funds in the digital asset portfolios.  The digital assets that these companies held were mostly Bitcoin and Ether. These coins are served as a preferred means of exchange in the crypto world. However, when the prices collapsed the value of these digital assets thinned out, and several developers were able to see that they were not able to raise additional funding.

The founder of ETCDEV stated in an interview that they are a part of the trend.  He also noted that a few things happened at the same time.  He said that if the same thing happened a year ago, it might not have been a problem because there was a lot of free money in the market.  However, when it comes to the bear market, there needs to be a change.

In the past week, it was a financial crunch, and ETCDEV was not able to raise funds.  Artamonov, the co-founder further added that about 12 of their workers were searching for jobs and a few of them, he stated were already recruited by a rival company.

Well, this is not the case with just this company. Steemit Inc, in late November, is a company which will pay their content contributors using cryptocurrency, laid off nearly 70% of their employees. This is also the case with adult entertainment companies like SpankChain, which downsized from 12 workers to 8 workers.

Several venture capitalists have funded nearly 1,180 crypto startups ever since 2012.  This amounts to more than $5.6 per coin desk.

Several other companies raised more than $22.5 billion by issuing tokens to accredited investors through ICOs.

About $158 million was raised in the past year by Sirin Labs to create a mobile phone, which permitted users to trade using crypto. With the same story repeating in different forms in several companies, crypto cash should act both as an awakener and as a motivator.

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