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Does Blockchain Need Reputation Management?

July 19th, 2018 Posted by Blockchain 0 comments on “Does Blockchain Need Reputation Management?”

2017 was the year cryptocurrency truly carved out its space in the public consciousness. Thousands of articles were published on the topic, and Forbes proclaimed it “The Year of the Bitcoin.”

Communities formed, passions ignited, celebrities weighed in.

Percolating around the edges of the crypto-frenzy was a shallow awareness of the existence of blockchain — the technology upon which Bitcoin, and most* cryptocurrency, is built.
*Conversely, IOTA (for example) uses a directed acyclic graph, or DAG, instead of a blockchain to store its ledger.

While this revolutionary technology has always been the real hero, Bitcoin was the trendy face, with its dramatic price fluctuations piquing the interests of the media, government, and Wall Street alike. Thus, the two became conflated; to speak of blockchain was to speak of cryptocurrency, and to speak of cryptocurrency was to speak of risk, gambling, market fluctuations, and unrecognizable, uninviting communities of enthusiasts and “miners.”

The irony of this is blockchain is by its very definition a stable and steady structure.

It is a process of data encryption and validation which ensures the validity of exchanges such as coin transactions, contracts, or any other transactional method through a virtually unhackable process of mathematical encoding.

It is also revolutionary; the use of smart contracts allows for a universal system of fraud-proof exchange, creating an immeasurable opportunity for society and business alike.

And therein lies the real tragedy. Those who follow the technology understand the myriad possibilities the distributed ledger technology represents, with applications and implications far beyond currency trading, but the public at large still associates it with instability and risk.

Challenges in Internal Communications

Furthering this communications conundrum, particularly for marketing professionals working for blockchain companies and tasked with touting the benefits of blockchain for industries outside of the exchanges, is that blockchain companies often use initial coin offerings (ICOs) to raise capital.

ICOs create a particularly unique challenge for these professionals stuck between promoting their own coin offerings and their actual product. For example, Factom’s Harmony, a blockchain solution specifically for the mortgage market, also issued Factoids, a cryptocurrency, in order to raise capital investment for their product.

Essentially, they have two value props appealing to two very different markets – capital investors and crypto enthusiasts – simultaneously.

But blockchain doesn’t need reputation management simply to make life easier for these few (but growing) companies and their marketing departments. As believers in this technology, it is imperative that the public has a positive view and correct understanding of it because blockchain solutions will not blossom if consumers don’t demand them.

This is because it is expensive to transition an entire company away from one way of doing business to another, and many companies do not have the financial incentive to do so without public pressure demanding it.

It is up to blockchain communicators in this space create that public demand by touting its efficacy.

The tendency to downplay the importance of abstract technological problems has never been more prominent than in the cybersecurity realm. Safety and security are customer-relations issues. Mitigating these risks has much more to do with PR than it does with actual data protection, and many companies would be happy to spend as little as possible on important things like cybersecurity.

We see it all the time; when companies like Experian, Facebook, and Target get hacked or manipulated, they seem to care more about improving public perception of secure data than the actual practice of it.

External Communications Challenges: Thinking like a Computer

Aside from communications challenges, there are also psychological ones.

In blockchain, there is no centralized system. This concept alone is almost antithetical to human ideas of safety and security. We have always looked to a unified person or state that represents elements of trust. Our homes are safe; they are where we keep all of our stuff. We can look over it, preside over it, gather it up in our arms. We like our things together in one place. We like homes that keep our stuff secure and are comforted by the locks on our doors.

Blockchain Security

Problem is, once someone breaks in, all of your stuff is there for the taking.

Logically, the best way to keep a thief from taking all of your stuff is to hide it in a thousand different places. Yet that is antithetical to human existence because we have evolved in a particular way; namely, to be as efficient with our energy as possible, and to place the most trust in things we can see and touch.

But this is not how machines think. The fact that trust is now better explained by decentralization represents an erosion, but also an evolution, and such evolutions have always reshaped society in dramatic ways.

Take the aviation industry, for example. An airplane shaped like a bird was never a viable option for human flight, precisely because the things that nature needed to solve for — namely energy conservation and preservation — was not the problem facing humans once the internal combustion engine was invented. An airplane’s fuel consumption equilibrium is much different than a human’s; it does not need to stop and eat at the same frequency. Once we stopped trying to replicate nature and instead focused on harnessing the power of the machines at our disposal, we were able to take to the sky.

Blockchain is similar in its seemingly contradictory but revolutionary nature.

The Next Revolution

We use the term “revolutionary” because blockchain solutions outside of cryptocurrency have the potential to have a substantive impact on society as a whole.

  • Smart contracts and instantaneous data verification provide potential solutions for many of the world’s problems. Sierra Leone just held the world’s first “blockchain election.”
  • Ethereum’s co-founder, Joseph Lubin, touted the benefits of its application to the music industry at SXSW.
  • Startup eHarvestHub seeks to reduce the cost of fresh produce by making it easier for farmers, distributors, and retailers to buy and sell goods in real time.
  • Swytch seeks to use smart contracts to buy and sell energy tokens, potentially revolutionizing the energy industry.

Indeed, any industry that has an exorbitant amount of mediation and middlemen is ripe for improvement with this technology. This will, in turn, make goods and services much cheaper and faster.

It is, therefore, the responsibility of communicators in this space to communicate effectively internally and externally; to expand the public scope of understanding of blockchain beyond cryptocurrency; to break the mental association between currency and blockchain.

Not only that — it is incredibly important to the viability of the industry that it does so.

Because of the overwhelming possibilities of blockchain applications for everything from voting to finance, it is more significant than simply a minor annoyance shared by a small group of blockchain marketing professionals. Right now, we are doing this incredibly valuable solution a disservice and, as a community, we must do a better job of remedying that.