Sex, iced tea and kittens: why blockchain has a bad name

Like oysters and the movie “The Last Jedi”, blockchain is a topic that divides opinion. 

Some see blockchain as the biggest technological development since the Internet, while others dismiss it as over-inflated hype to fool the gullible. Granted, there are perfectly valid reasons to be skeptical when someone uses the word “blockchain” in their sales pitch: when the crypto bubble burst, billions were wiped out. This was followed soon after by plenty of stories of how fraudulent crypto companies bilked investors. Clearly, we’re fallen off what Gartner calls “the peak of inflated expectations”, and into the depths of “the trough of disillusionment”.  

That’s a problem if you’re a legitimate business looking to leverage blockchain in your communications. How can you communicate the benefits of a potentially-game-changing technology without running into the wall of cynicism surrounding blockchain today?  

So, before you draft that press release, here’s what you need to ask yourself: 

 1. Is the ‘blockchain story’ your company’s main reason for existence? 

Eyebrows were raised when the Long Island Iced Tea Corporation – on the verge of entering the pink sheets - announced it was rebranding itself as Long Island Blockchain Corporation. This strategy worked for a little while: Long Island stock skyrocketed 500%, which helped the company stay on the NASDAQ. Unfortunately, it wasn’t enough: the stock price followed crypto’s dive, and the company was eventually delisted in April 2018.  

In Singapore, crypto trading fund Hashtag Capital found that over 634 cryptocurrency and blockchain-based companies were registered in Singapore between 2016 and 2018. A quick scan of the websites of many of these companies reveal landing pages containing nothing more than a vision statement (the words “democratize”, “revolutionary” and “disruptive” appear frequently), a roadmap infographic, and a downloadable proof-of-concept whitepaper - but no real product. The lack of a product certainly didn’t deter investors at that time, who collectively threw US$8.3 billion at these companies through ICOs. That’s not going to happen today.  

If you’re launching a new blockchain-based company, don’t lead with “blockchain” as your raison d'être. Instead, lead with a working product or service. Explain why your product is needed, and how it will help the people and businesses it’s targeted at. Tell them how you’re going to be different. Tell them how you’re going to be profitable. Basically, if you start with the fundamental stuff that makes for good, sensible and sustainable business, your communications strategy will follow suit.  

2. Does your product even need blockchain to work? 

Long Island wasn’t the only one trying to cash in on blockchain hype. Even venerable companies like Kodak jumped in feet first with the launch of KodakCoin, a cryptocurrency token that was supposed to help aspiring photographers monetize their work on Kodak’s photo-sharing platform. (The company also licensed its brand to a crypto startup that eventually collapsed in acrimony, but that’s another story).  

However, there are existing platforms that function perfectly well to help aspiring photographers monetize their work, without the need for blockchain.  

Yet another example: Dutch blockchain company Legal Thing developed a blockchain-based smartphone app, Legal Fling, that allows adults to – in the company’s own words - “more easily give explicit and formal consent to sex”. Consenting adults enter into a binding smart contract, which the company formalizes and records as a blockchain, so that no one can claim after the fact (or act) that consent wasn’t provided.  

Again, it’s questionable why blockchain is essential for Legal Fling to work, when existing encryption and secure storage techniques could do just as well. Early adopters have learned the hard way that blockchain comes with its own set of problems; not least of which is its implementation complexity and the hard cap on the number of transactions it can concurrently process.  

Here’s our advice: don’t crowbar the word “blockchain” into your product or service announcement in the hope of gaining investor attention, buying interest or press mentions. The market and the media are a lot more discerning, and you’ll probably end up with hard questions you’re not prepared to answer.  

3. Does blockchain have any communications goodwill left in its tank? 

Take CryptoKitties, a blockchain-powered game where users purchased, collected, bred and sold various types of virtual kittens. While the use of blockchain here was specifically for leisure, the app arguably diluted the real value of using blockchain to encode and preserve information. It even had the unintended effect of congesting the Ethereum network, crowding out users who needed payments or business transactions processed. 

Bananacoin is another notable story. Founded by several Russian entrepreneurs and a Thai agronomist who own a banana farm in Laos for the past three years, Bananacoin is an Ethereum-based altcoin that’s pegged to the export price of – wait for it – one kilogram of bananas. As an added incentive, each Bananacoin investor is given the right to “personally visit the company’s banana plantations in the Vientiane province”.  

You don’t have to look hard to find plenty of examples draining whatever goodwill that’s left in blockchain: special tokens for members of emotional support groups, tracking the amount of beef steaks you eat via blockchain, or the huge number of scams (and growing) that’s associated with crypto.  

So given the current climate, it’s debatable whether the use of “blockchain” in your company’s communications would help or hinder. It wasn’t too long ago when many companies liberally used words like “online” or “digital” in their mission statements – hardly anyone with credibility does that now. It’s our belief that blockchain is rapidly heading down the same path.