Companies Shying Away from the Term “Blockchain” Due to Hype
Cryptocurrency, Blockchain–It appears the ongoing bearish market of 2018 is finally having an impact on companies that once sought to capitalize on the hot button buzzword “blockchain.”
On Nov. 6, Fortune published an article detailing a report out of Forrester Research, claiming that the term “blockchain” has become so saturated and stigmatized that companies are not shying away from using it in relation to their technological development and promotional materials. While a year ago companies were rushing to label themselves with blockchain or otherwise indicate that they had found ways to integrate the popular technology into otherwise mundane processes, 2018’s depressed cryptocurrency market has led investors to be desensitized to the development. In place of Blockchain, companies are turning to the trendy sounding “distributed ledger technology,” with Fortune writing,
According to Forrester, firms are ditching the b-word in favor of “DLT,” which is shorthand for distributed ledger technology—a more descriptive, if less catchy, term.”
In addition, the report states that companies are afraid of the “wild west connotations” associated with cryptocurrency, making the assumption that labeling their brand or product with blockchain will also denote a similar inclination towards price depression. With the crypto markets approaching the final month of a year that has been overwhelmingly disappointing for investors, companies fear that any association with cryptocurrency, even through the central technology of blockchain, will negatively impact their brand–a vast turn around from last years land-grab to integrate blockchain into the marketing of tech companies.
The most ridiculous example came in the form of beverage company Long Island Iced Tea Corp. shamelessly changing its name to Long Blockchain Corp. in an attempt to capitalize on the crypto boom of last December. The name change, in addition to the company switching from beverages to investing in Bitcoin mining, appeared to bring about massive short-term returns as investors flocked to buy into a new “blockchain” product. However, with the subsequent decline in Bitcoin pricing, the move proved disastrous for the company and culminated in Nasdaq Stock Market de-listing Long Blockchain Corp. in April due to low market capitalization.
While the report chastises companies who are only tangentially related to blockchain adopting the name, it does report a cautious but optimistic outlook for the development of distributed ledger technology,
“The networks that are live or under development vary greatly and frequently lack key characteristics that many regard as essential components of a blockchain…On the tools and services side, we’ll witness steady but cautious progress. “Cautious” because DLT hasn’t proven to be a significant, reliable revenue stream for software and service providers, and 2019 won’t be any different.”
The report goes on to predict that innovation in the field of blockchain will largely be driven through the tokenization of assets, a future some have reported inevitable following the rise of initial coin offerings and the ability to create blockchains independent of price volatile cryptocurrencies. Forrester Research goes on to give the example of tokenization in the real estate sector, a process that is gaining traction for the use of blockchain without outright creating new currencies.