Forget the Great Reset. Members of the industry known as “crypto” (or “blockchain,” “digital asset” or “distributed ledger technology?”) attended the World Economic Forum this week under the influence of the crisis known as “FTX” spurring the big one. rebrand.
After the bankruptcy of the Bahamas-based exchange, “crypto” and “NFTs” (non-fungible tokens) have become buzzwords for skeptics who dismiss this technology as useless hot air – just like the “blockchain” seen in 2018 around coin offerings initial (ICO) bubble, while, in the well-known case, the The Long Island Iced Tea company is famously named Long Blockchain Corp.
Therefore, there is talk of a new lexicon (now we are stuck with “crypto”) as business leaders try to convince policymakers attending the talkfest in Davos, Switzerland, that there is a need for constructive regulation or seeking agreement, involvement or just acceptance. by mainstream corporate leaders who have also become powerful.
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I’m sure many readers of this column will recoil at this effort. Some may see it as a centralizing power grab.
Maybe that’s fair. This annual group in the Swiss Alps, often cited for hypocrisy, empty talk and elitism, is a lightning spread among those who believe in the potential for cryptocurrency and blockchain technology to raise the existing and unjust global economy. You don’t have to share conspiracy theory views about WEF founder Klaus Schwab “Good reset” the idea has concerns about many Davos member companies and institutions whose business models perpetuate an exploitative, centralized power structure.
But it is also clear that “crypto” is now widely associated with “happy-stay-poor” crypto bros and what MIT Digital Currency Initiative Director Neha Narula calls “token casinos.” The word now makes squeamish policymakers and executives a barrier to progress for crypto industry leaders who want to get involved.
It may not be a bad idea to find words that do not sound foreign or threatening, words that encapsulate more universal and positively recognized ideas.
Brynly Llyr, head of blockchain and digital assets at the World Economic Forum, suggests “decentralized systems” as a phrase that accurately describes the function played by this technology without risking a negative association with crypto culture.
Watch: Crypto Outlook at the World Economic Forum
Others are simply resurfacing “blockchain,” hoping it will be more appealing to businesses that want to use the system to manage their company’s needs. (One concern here is that the word is associated with the “permissioned” blockchain system once favored by business consortia, a system that is decentralized and no real value is added as a result. Now, with businesses increasingly building Web3 strategies on permissionless layer 1 protocols such as Ethereum, the retrograde connotations of “blockchain” may not be a bad thing.)
Improper language
The industry language problem goes beyond the negative connotations of “crypto.” It is also that the catchall word lacks precision and important nuances.
For example, there are different types of tokens. These include commodity tokens like ether (ETH) that power public blockchains; store-of-value assets such as bitcoin (BTC); payment tokens such as USDC; and NFTs, which are essentially tokens of rare digital objects. All are often lumped together under the label “cryptocurrency,” which makes associations with the traditional idea of ”currency” and has distinct legal and political connotations.
Read more: What is Cryptocurrency?
This error creates problems for participants in this industry when negotiating rules or terms of service with each other and with policy makers and non-crypto businesses.
“We really want to talk through each other,” said David Treat, senior managing director of Accenture’s blockchain practice. “People use arguments about one domain that don’t work with all the others.”
Treat is looking for a taxonomic framework that “allows us to see the interaction between the tokenization of identity, money and objects so that we are not sucked into one of these myopic aspects and miss the broader and important conversation.”
Obsessing over words in this way may seem beside the point when the most important thing is to create protection against the type of malfeasance that causes FTX to collapse. But amid reports that compliance officers are now giving blanket instructions to banks to block services to entities exposed to “crypto” – if taken literally, a group that includes Microsoft, Starbucks and, ironically, BNY Mellon – it’s clear that we are all. should be clearer with our words.
Read more: CoinDesk’s Crypto Glossary
Who decides, though? It is not a central marketing department or a chief brand officer who can dictate what brand labels should be used in this industry. The market will decide which words to use.
So, for now, we’re stuck with “crypto.”
