Forget the Great Reset. Members of the industry known as ‘crypto’ (or is it ‘blockchain’, ‘digital assets’ or ‘distributed ledger technology?’) attending the World Economic Forum this week in the shadow of the crisis known as “FTX” spur a big rebrand.
Following the Bahamas-based exchange’s collapse, “crypto” and “NFT” (non-fungible tokens) have become trigger words for skeptics who dismiss the technology as useless hot air — just like the “blockchain” was considered in 2018 around the initial coin offering (ICO) bubble, when, in a notorious case, the Long Island Iced Tea Company Infamously Renamed Itself Long Blockchain Corp.
Consequently, there was talk of a new lexicon (we’re stuck with “crypto” for now) as business leaders tried to convince policymakers attending the talkfest in Davos, Switzerland, of the need constructive regulation or the search for agreements, commitment or simply acceptance. by mainstream business executives who had also turned out 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 right. This annual gathering in the Swiss Alps, often cited for its hypocrisy, hollow talk and elitism, is a lightning rod among those who believe in the potential of cryptocurrency and blockchain technologies to disrupt the existing inequitable global economy. You don’t have to share the conspiracy theorist opinions of WEF founder Klaus Schwab “Great Reset” idea to have concerns about the many Davos member companies and institutions whose business models perpetuate the centralized and exploitative power structure of this system.
But it’s also clear that “crypto” is now widely associated with “have-fun-to-stay-poor” crypto bros and with what Neha Narula, director of the MIT Digital Currency Initiative, calls “coin casinos”. That the word now makes policy makers and executives disgusted is an impediment to progress for any crypto industry leader who seeks to engage with them.
It might not be such a bad idea to find words that don’t sound so alien or threatening, words that encapsulate more universally and positively recognized ideas.
Brynly Llyr, head of blockchain and digital assets at the World Economic Forum, suggested “decentralized systems” as a phrase that accurately describes the function this technology plays without risking a negative association with crypto culture.
Others are simply resurfacing “blockchain”, hoping it will be more palatable to businesses that want to use these systems to manage business needs. (A concern here is that the word was associated with “authorized” blockchain systems once favored by corporate consortia, systems that weren’t truly decentralized and added no real value as a result. These days, as companies increasingly build Web3 policies on permissionless Layer 1 protocols such as Ethereum, the retrograde connotation of “blockchain” might not be so bad.)
The industry language problem goes beyond the negative connotations of “crypto.” It is also that catch-all words lack precision and vital nuance.
For example, there are several 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 markers of rare digital objects. All are often grouped under the label of “cryptocurrencies”, which promotes an association with the traditional idea of “currencies” and carries distinct legal and political connotations.
Read more: What is Cryptocurrency?
This vagueness creates problems for participants in this industry when negotiating rules or terms of service with each other and with policymakers and non-crypto businesses.
“Too often, we talk to each other,” says David Treat, senior managing director of Accenture’s blockchain practice. “People apply an argument to one area that doesn’t really work with all the others.”
Treat is looking for a taxonomy framework that “allows us to see the interplay between the tokenization of identity, money, and things so that we don’t get sucked into a myopic facet of this and miss the conversation anymore. large and important”.
To obsess over words in this way may seem out of place when the most important thing is to find safeguards against the kind of malfeasance that led to FTX’s collapse. But amid reports that compliance officers are now giving banks broad instructions to block services to any entity that dabbles in “crypto” – if taken literally, a group that includes Microsoft, Starbucks and, ironically, BNY Mellon – it’s clear that we all need to be clearer with our words.
Read more: CoinDesk Crypto Glossary
But who decides? It is not a central marketing department or brand manager who can dictate what brand labeling this industry should use. The market will decide which words to use.
So for now we’re stuck with “crypto”.