Trust and Reputation: Is Crypto Helping Blockchain Adoption or Hindering It?

Trust and reputation have always played a complex role in blockchain adoption

While blockchain technology offers the promise of transparency, decentralization, and security, the crypto market occasionally reveals more contentious aspects.

The Rise and Speculative Nature of $TRUMP Memecoin

A recent example is the emergence of the $TRUMP memecoin, which epitomizes speculative trading without practical utility, raising questions about whether such trends advance blockchain adoption or shadow its reputation.

On January 17, 2025, the $TRUMP token was launched on the Solana blockchain and quickly gained traction. As of January 18, the global crypto market cap stood at $3.6 trillion, a 1.49% decrease in 24 hours. However, despite the broader market decline, $TRUMP experienced a meteoric rise, surging 400% shortly after issuance. Some traders sold their Bitcoins and other crypto to buy new memecoin, so there was no inflow of capital into the crypto market; instead, it was a rebalancing of current crypto investments.

$TRUMP continued to rise thereafter, with less than 500,000 investors trading the 200 million tokens in circulation.

Critically, 87% of the circulating supply — representing 20% of the maximum possible number — is controlled by just ten holders. This concentration underscores the speculative nature of such tokens, where price movements are heavily influenced by a few “crypto whales.”

The value of $TRUMP is rooted in a phenomenon now referred to as the “Gamestop Effect”— a practice where individuals on social media platforms coordinate to collectively invest in a particular stock or token, driving its value up sharply. This artificial surge often benefits those who manage to capitalize early by fixing a profit, while later participants may face significant losses once the hype subsides.

Regulatory Challenges and the Need for Responsible Market Practices

This speculative frenzy highlights a fundamental problem in the crypto market. Unlike traditional financial markets such as in the U.S., Europe, or the Gulf Council Countries, where regulatory frameworks and market makers create stability, the crypto market remains largely unregulated. Without such safeguards, it becomes a playground for speculative tactics that exploit the decentralized nature of blockchain.

Governments and regulators in traditional markets have taken steps to curb such speculative practices. For example, roadblocks have been implemented to prevent price manipulation. However, the crypto market, with its lack of established market-making mechanisms, remains vulnerable. The absence of robust oversight enables “crypto whales” to dominate, often to the detriment of smaller investors and the broader blockchain ecosystem.

Tokens like $TRUMP, which currently lack clear real-world utility, may attract significant short-term interest but could pose challenges to building the trust and reputation required for widespread blockchain adoption.

To unlock its full transformative potential, the blockchain industry would benefit from focusing on meaningful applications and fostering responsible market practices. Addressing controversial trends like $TRUMP can help ensure that the true benefits of blockchain technology remain at the forefront, supporting its long-term growth and credibility.

Sure, there is room to consider various trading methods to earn money for clients, but it’s important to bring strategic long-term value to brokerage services and provide them with a sustainable mix of risk-taking and profit. I advocate for meaningful trading and socially responsible trading tactics.

Security Risks and Investor Protection in the Crypto Market

What I'm concerned about is that security risks remain persistent in the crypto sphere. Even some cold crypto wallet providers have overlooked the outflow of sensitive personal information, which can put at risk the usual lives of some ultra-high-net-worth individuals (UHNWI) and HNWHI investing in crypto.

There have been cases arising on social media regarding almost any non-custodial wallets, where, in some cases, clients of almost any chosen wallet face ultimately unexplained drains of their crypto assets even if they don’t use this wallet as an Android or iOS app for months, don’t connect it with any site, don’t open any links, and hold the seed phrase written only on paper, without exposing this phrase to risk by typing it on any kind of online or offline computer or smartphone notes.

If we speak about accounts opened at crypto exchanges, then there is a well-known motto: “no keys, no crypto.” It means that an investor holding cryptocurrencies on centralized crypto exchanges (CEX) faces the risk that their assets can be “frozen” or hacked.

What can be done in this case to defend investors’ interests? Investors tick boxes in the “Terms of Use” or “Terms of Service.” But this “agreed” contract means in many jurisdictions almost nothing without a paper document or an electronically government-approved signature.

Risks and Vulnerabilities in Centralized and Decentralized Crypto Exchanges

A crypto exchange can alter this dubious digital contract at any moment, so an investor could realize that the rules of the game have fundamentally changed in an instant manner. Moreover, most CEXs don’t reveal their physical address and location where disputes can be legally resolved. Some of these CEXs boast about the “blockchain nature of their activities,” trying to use this thesis as an explanation for why investors can’t find their physical office (“we work in a decentralized manner”), but this explanation is irrelevant and works against the interests of clients.

In most cases, there is no traditional insurance coverage for such activities, and legal investigations into “hack incidents” are rare. As a result, there is often no concrete evidence to determine whether these incidents stem from malicious activities by individuals outside/within cryptocurrency exchanges or even their owners. Similar concerns apply to interactions with crypto wallets.

But what about decentralized exchanges (DEX)? While DEXs are generally less prone to large-scale hacks, they are not immune to vulnerabilities such as bugs in smart contracts or poorly vetted projects. While this provides more control, it also increases the risk of loss due to investor error. For example, when an investor sends crypto to the address of another blockchain or makes a mistake when copying an address or faces address spoofing by a virus.

Investor Protection and the Future of Crypto Finance

Some experts argue that crypto is the “future of finance,” but this future is here, and this situation is not so favorable to investors in terms of defending their rights compared to legacy institutions such as banks, brokerage houses, and investment funds. Many in the crypto sphere used to criticize these institutions and promoted the thesis that Bitcoin was invented by Satoshi Nakamoto to address the insufficiencies of classical finance. However, the crypto reality looks not so bright as many people envisioned.

Moreover, crypto can create risks for Bitcoin and Ethereum ETF providers. Currently, they invest money they receive from investors into BTC and ETH respectively, but I see a more sophisticated way for them to achieve this exposure: buying regulated Bitcoin and Ethereum options from reputable entities. However, this advice requires amendments in the regulation of ETF issuance and circulation.

The beginning of 2025 shows us that there is a significant job ahead for broadening crypto inclusion, such as creating wallets for individuals with disabilities, including blind people and those who have difficulty typing or can manage their transactions only by voice.

Meanwhile, all the drawbacks and loopholes of using decentralized ledger technology (DLT) have predictable ramifications. Although a fully developed alternative financial system to the US dollar has yet to emerge (if it ever does), any irregularities or shortcomings in the global investment landscape will continue to drive demand for safe options such as USD and USD-based stablecoins. However, even these stablecoins carry inherent risks associated with the crypto sphere.

Anyway, it’s time to reconsider how people buy, sell, and hold cryptocurrencies. This is a discussion about the future of blockchain.

Blockchain Beyond Crypto: AI and the Future of Decentralized Finance (DeFi)

We need blockchain outside just crypto and memecoins, NFTs, and tokens. As I stress, the “crypto case” will be more suitable for AI robots working in IoT. Of course, human interaction with such AI assistants in crypto and tokens will be valuable, but the most intensive financial communications will likely occur on an AI-to-AI basis.

Blockchain needs to be considered beyond crypto and taken as a fundamental innovation to advance AI evolution sustainably. The future of AI financial implications lies in DeFi.

Almost all on-chain transactions in DeFi will be initiated by AI assistants; DeFi will be the financial support sphere for AI robots so that many DeFi protocols may not even have an interface for humans. However, the most effective AI work in the financial sphere will be realized when most operations are conducted by AI traders.

Fully autonomous assistants will not emerge until the large language models (LLMs) on which they are based (or the automatic verification of their proposed actions) become reliable enough. Currently, the work of an AI-assistant requires a human to verify their decisions. Such AI-assistants will only be useful to professionals in their field (and they may only prove useful in a relatively narrow class of tasks where verification can be scaled during training).

Currently, AI assistants are not only unreliable but also — except for a few instances (which have other issues) — unsafe: susceptible to all kinds of manipulation through specially crafted prompts.

The choice of the most suitable blockchain to drive AI evolution is being made now. In considering Ethereum, BASE, Solana, Substrate framework utilizes a system called FRAME (Framework for Runtime Aggregation of Modularized Entities), among others.

So, to recap, the crypto landscape, while promising a financial transformation, has exposed significant investor protection gaps, a stark contrast to traditional finance. This necessitates a serious regulatory reckoning, not just for crypto itself, but for related products like crypto ETFs, demanding a more sophisticated approach.

Beyond individual investors, broader inclusion, like accessible wallets for people with disabilities, remains a critical, yet largely unaddressed, challenge. While crypto aims to disrupt traditional finance, the enduring strength of the US dollar, even amidst stablecoin risks, underscores the continued demand for safe-haven assets. Ultimately, the future of blockchain isn’t just about crypto, but its potential to fuel a new era of AI-driven financial services.