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Yesterday, April 17, the Enterprise Ethereum Alliance (EEA) announced a new initiative called the Token Taxonomy Initiative aimed at clearly defining a token in easy to understand language. By clearly defining a token and making the definition accessible to people across a variety of industries the hope is that more people can better understand how tokens and blockchain can air their business.
The press release states:
“The purpose of this initiative is to clearly define a token in non-technical and cross-industry terms using real-world, everyday analogies so that anyone can understand them.”
Bitcoin may have been the trendsetter for cryptocurrency, but in the last decade we have seen the industry skyrocket with new tokens gaining popularity all the time. Over the last two or three years, digital tokens have become a multi-billion dollar market. While Bitcoin remains popular, most new tokens are Ethereum-based (ERC-20-compliant).
Blockchain has widespread uses that businesses are starting to wake up to and become excited about but in order for tokens and blockchain applications to become scalable, a clear understanding of use cases, taxonomy, terminology, and specification is needed. That’s what the EEA is trying to do here, make the technology more widely accessible.
The EEA will establish a common set of terms and definitions, clearly define a token in non-technical and cross-industry terms, create a Token Taxonomy Framework (TTF), and define meta-data to aid the generation of visual representations useful to understanding tokens.
Businesses can’t decide they want this new and exciting tech if they don’t know how it works or even at the most fundamental level, what it is. Enterprises, governments, regulators, and entrepreneurs need a common understanding of what a token is if we are to see its widespread adoption.
EEA Executive Director Ron Resnick said:
“Standardizing tokens to work anywhere could hold the key to one of the greatest economic opportunities in modern history. Just like standards that led to the rise of e-commerce on the internet, applying standards to tokenization will enable the enterprise to use tokens to serve as, or provide access to, a set of goods, financial assets, securities, services, value or content through enterprise blockchain applications.”
It’s too soon to tell what impact this initiative will have, but there’s a good chance it will help accelerate the blockchain revolution we expect to see in the next decade, with more and more businesses finding ground-breaking ways to incorporate the technology.