The SEC and Goldman Sachs have recently tackled the over-and often misleading-usage of the word “blockchain.” To remedy this perhaps, companies are banning the use of the word “blockchain,” instead using the term “Digital Ledger Technology,” or, DLT for short?
Blockchain is a type of Digital Ledger Technology and has for some time been the preferred lingo of industry experts in the space. Not only is the term “blockchain” questionably legal, it is also, arguably, passe.
This week, Goldman Sachs warned its high net worth Private Wealth Management clients (worth $10+ million in assets) about the dangers of investing in cryptocurrency and blockchain as a whole. The authors of the 108 page “(Un)Steady as She Goes” outlook heavily associated “crypto-mania” with companies that add the word “blockchain” to their name resulting in blind reaction from investors:
“The mania surrounding cryptocurrencies is probably better illustrated by the price surges in companies that announce some sort of affiliation with blockchain technology and cryptocurrencies.”
Exemplifying this is the surge in stock price (500% in pre-market trading) experienced by Long Blockchain (LBCC), formerly Long Island Iced Tea Corp when it added “blockchain” to its title in December. Another example occurred in November, when a biotech company, formerly known as Bioptix, changed its name to Riot Blockchain and announced a focus on crypto. The penny stock nearly doubled after the announcement.
The stock surges of companies only vaguely tied to blockchain make it clear that the powerful buzzword must be used with caution. Recently, the SEC permitted two blockchain ETFs (Exchange Trading Funds) to launch on the New York Stock Exchange. A major caveat? The term “blockchain” could not be used in their names. Complying with this, ETFs Reality Shares, NexGen Economy (BLCN) and Amplify Transformational Data Sharing (BLOK) were listed mid-January.
Given the caution surrounding blockchain rhetoric, it is surprising that the term DLT “Digital Ledger Technology” has not begun to serve as its replacement. Perhaps this is because the term would provoke little reaction from green investors with a limited vocabulary (and understanding) of crypto-lingo. Experts in the space, including Blythe Masters who ironically helped put ‘blockchain’ on the map when she donned the cover of Bloomberg Markets in 2015, have long been over the term.
Emphasizing “DLT” over ‘blockchain’ at the Singapore Global Fintech Festival in November 2016, Ms.Masters and fellow experts on the “Blockchain and Distributed Ledgers” panel quipped about the word’s over-usage. This includes the rise in the number of jobs with the word “blockchain” in the title over the past year (2016). More than a year later, from December 2016 to 2017, this has increased further (200%).
Perhaps “blockchain” has become overly mass market with companies “knocking off”/or cheapening the real meaning of the technology similar to a street dealer of a Prada handbag. However, when we hear the term Digital Ledger terminology, we know who’s really in the “scene”.