Few weeks after the massive $500 Million Coincheck hack, the company has come forth with a novel excuse which caused the issue: Lack of experienced engineers. With the blockchain and cryptocurrency space growing each day, demand for high employees is following close behind.
Shortage of Skilled Labour
In the days following the Coincheck fiasco the company came forth and blamed the short-staffed situation in its risk mitigation division that led to the hack.
Koichiro Wada, Coincheck’s C.E.O, explained that while the company was aware of the staff shortage, primarily in its internal controls, management, and risk division, they couldn’t do much about it as the market seemed to have an acute shortage of skilled professionals in general.
This insight adds yet another point to the growing list of concerns that the industry faces, including lawsuits, government regulations, thefts, negative media coverage, bank crackdowns, amongst others. All this in a country that arguably the most progressive when it comes to cryptocurrency adoption.
Japan legalized bitcoin in April 2017, making it amongst the first country to do so. As such, the state has a vibrant cryptocurrency sector, with 30 regulated exchanges, blockchain startups, and several other cryptocurrency payment businesses. Furthermore, a 100 different companies have approached Japan’s Financial Service Authority (FSA) for a certificate, as reported by Reuters.
Understaffing a Major Concern
Quoine’s C.E.O, Mike Kayamori, added his own statements that give conformity to those of Coincheck’s:
“The FSA is breathing down necks on security, compliance, and risk. And if you don’t hire, you won’t be able to survive.”
Pascal Hideki of Descartes Search said HR firms and placement agencies “cannot keep up with demand for crypto talent.” The company is part of the Japan Blockchain Association and specializes in tech recruitments. Surprisingly, 60 percent of the firm’s recent head-hunts have been for crypto-related businesses.
Salaries in the sector are above average as well, as per Reuters. To entice engineers, companies are offering fat bonuses, increased base pays, and more money in case the candidate is experienced.
Such a phenomenon in business is called the “$/knowledge ratio,” which calculates the cash pool of available income to the number of skilled employees.
Japanese Culture a Possible Deterrent
Japanese “Salary Man” culture also comes into play. In Japan, employees take great pride in their position and often work for one company all their life. Putting this aspect into the blockchain industry is a further worry, as this would cause experienced individuals to forego the jump.
In the words of Blockchain Daigakko, a blockchain engineering firm, “Majority of Japanese that do understand blockchain and cryptocurrency already work for companies as lifetime employment, and have never considered the thought of changing jobs.”
“Such a scenario could possibly put a brake on everything,” thinks Alexander Jenner of Computer Futures.
“The sector’s growing so quickly, and the better exchanges are surviving. But many of them will fail, blunting the country’s early competitive edge.”
Skilled Labour Shortage a Worldwide Concern
Based on more in-depth research in the matter, BTCManager reported on a study by TopTal, which stated that “January 2017, the demand for blockchain engineering talent on Toptal has grown 700 percent, and 40 percent of the fully managed software development projects requested in the last month require blockchain skills.”
This data shows the demand in blockchain developers, and cryptocurrency conversant employees is not limited to Japan.
The topic has also been touched upon by Vitalik Buterin, founder of the Ethereum Foundation:
“Core developers and researchers should be employed by multiple companies or organizations [and] the knowledge of the technical considerations behind protocol upgrades must be democratized, so that more people can feel comfortable participating in research discussions and criticizing protocol changes.”