When Bitcoin and Ethereum were the only games in town, the issue of token standards and interoperability was not even on the radar screen, but today, with thousands of crypto development programs and tokens to match, it is time to “address the need to universally define tokens and how their implementation can occur, interchangeably, across platforms.” The Enterprise Ethereum Alliance (EEA), an Ethereum member driven consortium, has now announced an initiative to achieve that purpose.
The EEA has dubbed their project the “Token Taxonomy Initiative”, and as the name implies, the objective is to design a set of standards, a rubric, if you will, that will permit the classification of tokens across different blockchain platforms and industries “by defining tokens in non-technical, cross-industry terms”. The initiative has already garnered the support of several high profile partners, including JPMorgan Chase, Santander Bank, and the global consulting firm Accenture. ConsenSys, Intel, Microsoft, and IBM are also said to be joining the group, as well.
The press release states that:
While some form of tokens and tokenization have existed throughout time, blockchain-derived tokens have the potential to transform business models for goods and services offered by distributed or decentralized applications – even if they are built on top of different blockchains. 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.
The need for standardization has always been talked about, but no forum has existed to drive a consensus that could be adopted unilaterally. Perhaps, a venue now exists:
With the rise of cryptocurrency from its industry beginning in Bitcoin, to the thousands of coin projects that now fill the space, the variety of tokens has created a conundrum for classifying and sorting purposes. The EEA believes that their Taxonomy Initiative will ease the burden of defining coin projects based off a set of standardizations. Despite previous attempts and existing models of coin taxonomy, the press release reports that the industry is currently “lacking a venue for all participants to work together.
With major companies across the globe developing blockchain applications in house, as evidenced by the recent Forbes’ “Top 50” list of large corporations engaged in blockchain activities, the need for simplification and categorization of new and existing tokens becomes paramount. Standardizing tokenization can only help with eventual crypto awareness and adoption in the consumer marketplace, as well.
As EEA Executive Director Ron Resnick summed it up:
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.