Forget the Great Reset. Members of the industry known as “crypto” (or is it “blockchain,” “digital assets,” or “distributed ledger technology?”) attending this week’s World Economic Forum under the shadow of the crisis known as “FTX” are spurring a big rebrand
In the wake of the collapse of the Bahamas-based exchange, “crypto” and “NFT” (non-fungible tokens) have become catchwords for skeptics who dismiss this technology as useless hot air, just as “blockchain” was seen. in 2018 around the initial coin offering (ICO) bubble, when, in one notorious case, the The Long Island Iced Tea company infamously renamed itself Long Blockchain Corp.
So there was talk of a new lexicon (we’re stuck with “crypto” for now) as business leaders tried to convince lawmakers attending the talk fest in Davos, Switzerland of the need for constructive regulation or deals sought. , commitment or simply acceptance. by the leaders of the major companies who had also come forward in force.
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I’m sure many readers of this column will recoil from this effort. Some may even see it as a centralizing power grab.
Maybe that’s fair. Often cited for hypocrisy, empty words and elitism, this annual gathering in the Swiss Alps is a lightning rod among many who believe in the potential of cryptocurrencies and blockchain technologies to change the existing unequal global economy. You don’t have to share the views of conspiracy theorists on the thinking of the founder of the World Economic Forum, Klaus Schwab. “Great Reboot” the idea of having concerns about the many member companies and institutions of Davos whose business models perpetuate the centralized and exploitative power structure of that system.
But it’s also clear that “crypto” is now widely associated with “have fun-being-poor” crypto bros and what MIT Digital Currency Initiative director Neha Narula calls “token casinos.” That the word now makes policymakers and executives apprehensive is a barrier to progress for any crypto industry leader seeking to engage with them.
It might not be such a bad idea to find words that don’t sound as strange or threatening, words that encapsulate more universally and positively recognized ideas.
Brynly Llyr, director of blockchain and digital assets at the World Economic Forum, suggested “decentralized systems” as a phrase that accurately describes the role this technology plays without risking a negative association with cryptoculture.
Others are simply reviving “blockchain,” hoping to make it more acceptable to companies that want to use these systems to manage business needs. (One concern here is that the word became associated with the “permissioned” blockchain systems once favored by trading consortia, systems that were not truly decentralized and did not add any actual value as result. Today, with companies increasingly building Web3 strategies on permissionless Layer 1 protocols like Ethereum, the retrograde connotation of “blockchain” may not be so bad.)
The industry’s language problem goes beyond the negative connotations of “crypto.” It is also that general words lack precision and vital nuance.
For example, there are multiple types of tokens. These include commodity tokens like ether (ETH) that power public blockchains; store of value assets like bitcoin (BTC); payment tokens like USDC; and NFTs, which are essentially markers of rare digital objects. They are all often lumped together under the label of “cryptocurrencies”, which fosters an association with the traditional idea of ”coins” and carries different legal and political connotations.
Read more: What is cryptocurrency?
This imprecision creates problems for participants in this industry when negotiating rules or terms of service with each other and with legislators and non-crypto companies.
“Too often, we talk to each other,” says David Treat, senior managing director of Accenture’s blockchain practice. “People make an argument about one domain that doesn’t really work with all the others.”
Treat is looking for a taxonomy framework that “allows us to see the interplay between identity tokenization, money, and items so that we don’t get caught up in a myopic facet of this and miss out on the larger important conversation.”
Obsessing over words in this way may seem out of place when the most important thing is finding protections against the kind of embezzlement that led to the collapse of FTX. But amid reports that compliance officers are now giving banks blanket instructions to block services to any entity that has touched “cryptocurrencies,” if taken literally, a group that includes the likes of Microsoft, Starbucks and Ironically, BNY Mellon, it’s clear that all of us need to be clearer with our words.
Read more: CoinDesk Crypto Glossary
Who decides, however? This is not a central marketing department or brand director who can dictate what brand labeling this industry should use. The market will decide which words to use.
So for now, we are stuck with “crypto”.