Exploring transformation of value in the digital age
By Michael J. Casey, Chief Content Officer
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This edition of Money Reimagined comes from the World Economic Forum in Davos, Switzerland. Yes, that ridiculously over-the-top, perhaps way-too-self-important gathering of business and political leaders. In many respects, with its strong representation among the centralized financial establishment, the WEF is the antithesis of the decentralized spirit of crypto communities.
But whether crypto communities like it or not, the decision-makers who come to Davos have great power to shape the direction of crypto and blockchain technologies. And that’s why many who work on those technologies are eager to get beyond the negative sentiment that is shaping views toward “crypto,” including trying to abandon the word altogether. That’s the subject of this week’s column.
Bad Vibes from the Word ‘Crypto’ Have Some Calling for a Rebrand
(solidcolours/GettyImages)
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 great rebrand.
In the wake of the Bahamas-based exchange’s meltdown, “crypto” and “NFTs” (non-fungible tokens) have become trigger words for skeptics who dismiss this technology as hot air with no utility – much as “blockchain” was viewed in 2018 around the initial coin offering (ICO) bubble.
It’s also clear that “crypto” is now being widely associated with “have-fun-staying-poor” crypto bros and with what MIT Digital Currency Initiative Director Neha Narula calls “token casinos.” That the word now makes policymakers and executives squeamish is a barrier to progress for any crypto industry leader looking to engage with them.
Hence, 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 for constructive regulation or sought deals, engagement or just acceptance by leaders of mainstream companies who’d also turned out in force.
Brynly Llyr, the head of blockchain and digital assets at the World Economic Forum, suggested “decentralized systems” as a phrase that’s accurately descriptive of 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 enterprise needs.
The industry’s language problem goes beyond the negative connotations of “crypto.” It’s also that catchall 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 such as bitcoin (BTC); payment tokens such as USDC; and NFTs, which are essentially markers of scarce digital objects. All are often lumped under the label “cryptocurrencies,” which fosters an association with the traditional idea of “currencies” and carries distinct legal and political connotations.
This imprecision creates problems for participants in this industry when they negotiate over rules or terms of service with each other and with policymakers and non-crypto businesses.
Obsessing about words in this way might seem beside-the-point when the most important thing is to come up with protections against the kind of malfeasance that led to the FTX collapse. But amid reports that compliance officers are now giving banks blanket instructions to block services to any entity that’s touched” crypto” – if taken literally, a group that includes the likes of Microsoft, Starbucks and, ironically, BNY Mellon – it’s clear that we all need to get clearer with our words.
Who decides, though? This is not a central marketing department or chief brand officer that can dictate what brand labeling this industry should use. The market will decide which words to use.
The lesson, everyone at Davos seemed to be saying, was that the industry needs to rid itself of its obsession with token prices and focus on real-world applications.
For some, however, that will have proved to be difficult this week, given that last week was the best for bitcoin in a year and that the price has held above $21,000 as we close out this week. The green, for many, will be welcome.
The Conversation: Climate’s Crypto Case
Speaking of real-world applications, after this trip to Davos I’m more convinced than ever that the applications with the most potential to refocus this industry away from “number go up” speculation toward viable, real-world use cases revolve around climate and energy solutions.
In that spirit I hosted a Twitter Spaces conversation with some key players in the industry working in this area, including Ava Labs founder and CEO Emin Gun Sirer; HBAR Foundation’s vice president for sustainability and ESG, Wes Geisenberger; Filecoin Green Project Lead Alan Ransil; International Emissions Trading Association Director of Digital Climate Markets Alasdair Were; and Dave Ford, a partner at Eqo Networks. You can find the recording here.
Relevant Reads: Davos Gems
CoinDesk sent a team of reporters and TV producers to Davos. Here is a selection of their output.
In two reflections, one as a news analysis piece, the other for his State of Crypto newsletter, Nikhilesh De, managing editor for global policy and regulation, offered a moderately optimistic take on how the crypto community in Davos remains undaunted by the FTX fallout and on how world leaders seem capable of looking past that fiasco as well.
Sandali Handagama reported on the Dutch Central Bank chief Klass Knot taking aim at jurisdictions whose lax regulations enabled “bad actors,” such as FTX, to operate.
Advit Nath, the controller and director of the United Nations International Fund for Agricultural Development, penned an op-ed for Consensus Magazine in which he made the case for blockchain as a data-management tool for social impact.
