On Monday, the team behind Dentacoin announced that its system would be the first to use Civic’s Civic Connect, a decentralized identity-verification protocol. The announcement is striking, not so much in substance, but because Civic and Dentacoin inhabit such wildly different segments of the crypto landscape.
Civic is a high-profile effort towards one of the most compelling applications for blockchain technology—a decentralized, user-controlled identity tool that could help keep your personal data out of the hands of Facebook. Civic’s CEO Vinny Lingham is a partner at respected crypto VC firm Multicoin Capital, and a cast member of Shark Tank South Africa.
Dentacoin, on the other hand, is…well, it might be the biggest punchline in cryptoland. The project gets regular, offhand pummeling from Coin Center spokesman Neeraj Agrawal (“dentacoin: endorsed by 0 out of 5 dentists”). Redditors casually refer to it as a ‘scamcoin.’ It featured prominently in the very first episode of Aaron Lammer’s excellent Coin Talk podcast, in the company of the ill-conceived Kodak Kashminer. Dentacoin even made it into The New Yorker’s recent deep dive into Ethereum and the ICO bubble, cited alongside Bananacoin, Jesus Coin, and Long Blockchain Corp. as an emblem of uncontrollable crypto-hype.
After absorbing those casual references for the better part of a year, I’d come to assume that Dentacoin was a simple scam: just a shoddy white paper, a slate of fake advisers, and a pre-booked flight to the Bahamas. But the partnership with Civic (which has been independently confirmed by Civic, in case you’re wondering) successfully piqued my interest, and after a bit of basic sleuthing, I discovered something shocking.
Dentacoin is a real project, full of real people doing real work to bring an idea to fruition.
Dentacoin’s founders are quite publicly visible. Philipp Grenzebach has given direct video updates on the project’s YouTube channel, while Jeremias Grenzebach recently pitched Dentacoin to a TEDx event in Bulgaria, the project’s apparent home base. The testimonials on its website are from real dental services: Eva Sadej, the CEO of New York-based dental-hygiene platform Flossbar, confirmed that they’re really working with Dentacoin, though they’re “still in the education phase, with a little bit of implementation given other company priorities.”
Moreover, the shitcoin’s shitcoin actually has multiple functioning products, including a dental-reviews platform called DentaVox and a dental-care training app called Dentacare. I tried out DentaVox, and the Civic integration is already up. Dentacare has a smattering of mostly-positive reviews on Google Play. Both pay out Dentacoin to participants, part of the project’s effort to create a semi-closed economic system for dental care. According to Dentacoin, DentaVox has already paid out 279,445,554 Dentacoin, with a total current value of just over $62,000.
All of that adds up to more real achievement than plenty of ICOs can claim. So how did Dentacoin earn its bargain-basement reputation? In part, thanks to a number: at the height of crypto fever, the total value of Dentacoin’s circulating coins sailed north of $2 billion dollars. For many, that number alone became a convenient emblem of the silliness and unsustainability of crypto-mania.
But it was at least slightly misleading: nobody gave Dentacoin $2 billion to build a dentist-review site and a toothbrushing app. According to statements from Dentacoin community manager Petar Stoykov, the amount of money raised during the Dentacoin presale and ICO was roughly in the neighborhood of $3 million. To paraphrase Waylon Jennings, that might be crazy, but at least it’s not insane.
Dentacoin flies a few other red flags, particularly in its communications. There’s frequent crowing about coin price and exchange listings, and generally shoddy web design and promotional content. For instance, there’s this testimonial video featuring a guy who says he’s from Pune, India, and stiffly reads talking points about DentaCoin being a “top 100 coin” that “is helpful for dentist and customer…Dentacoin’s growth is fast. There are opportunity to buy more and more Dentacoin…” It looks like a paid endorsement bought from Fiverr.
Some more incidental features might also have ginned up negative sentiment. Dentists themselves are hardly a pleasant thought. Dentacoin’s team features both Eastern European names and fancy titles. For some, that might evoke the recent crypto scam OneCoin and its weirdly charismatic fake-doctor figurehead, Dr. Ruja Ignatova—also, probably coincidentally, based in Bulgaria. There has even been direct speculation about shady dealings at Dentacoin, including one set of claims that Dentacoin saw fit to publicly address.
None of that is working in Dentacoin’s favor. But the most important factor in Dentacoin’s shoddy reputation seems to be the widespread belief that a blockchain currency offers no real improvement to dental services. The best summary of that point came from Izabella Kaminska at The Financial Times, a notorious anti-crypto stopped clock who nonetheless had a fair point when she wrote that Dentacoin is “at its best—and that’s us being generous—a gift voucher” that introduces an extra layer to dental payments. Commentators far and wide have echoed that skeptical take: in the words of YouTuber Crypto Zombie, “Do you really need your own coin? I just don’t get it.”
That gets to much broader debates about so-called utility tokens. The claim that blockchain tokens will gain value through demand for use within closed ecosystems underpinned much of the ICO frenzy, since most ICOs—including Dentacoin’s—don’t give token buyers any stake in a company or a claim on its revenue. But economists and investors have grown increasingly skeptical of the basic utility token premise. More broadly, the entire idea of “token economics” is in its earliest stages, making it hard to really judge whether Dentacoin’s big idea is viable.
The Civic partnership doesn’t necessarily imply faith that it is. According to JP Bedoya, Civic’s VP of product and design, Civic wanted to launch Connect with “partners who had a functioning app and were ready to integrate Civic Connect immediately,” and thought that identity verification would help Dentacoin stop fraudulent use of its apps by bots. Civic isn’t saying that its deal involved any deep due diligence, despite Dentacoin’s unflattering status as a shitcoin meme.
Dentacoin, at least officially, won’t cop to any hurt feelings about being a joke. “Our response to skepticism is expressed in hard work and tangible achievements proven by facts and figures,” the company said in a statement. “The numbers speak for themselves: Just a year after our ICO, we have three up-and-running software tools used by 80,000 individuals and 4,000 dentists, 180,000 community members, 40,000 token holders, 170,000 recorded DCN transactions, [and] 71 operating businesses accepting payments in DCN.” Another notable accomplishment, before the bubble and the memes, was the company’s purchase of a $92 million dental clinic, using, according to the company, only Dentacoin.
All this leaves us in an uncomfortable place that might be crypto’s version of the uncanny valley. Japanese roboticist Masahiro Mori coined the term in the 1970s to describe the discomfort caused by a robot that seems almost human, but falls just a bit short of realism. Similarly, Dentacoin looks like a company in many ways, but like a scam in others. It’s a widespread problem generated, like our ambivalence towards robots, by the shock of the new, and by the slow process of establishing new norms for things like financial disclosure and performance. The bones and sinews of blockchain are still taking shape, so it’s hardly surprising that its teeth are a mess.