A double-edged sword? Once-famous brands are getting into crypto
There is no denying the fact that the crypto adoption wave sweeping the globe right now has resulted in a growing list of defunct brands making their way into the digital asset market in recent months.
Just two weeks ago, once popular music platform LimeWire announced that it is going to be making a comeback, albeit as a marketplace for nonfungible tokens (NFTs) rather than a file-sharing service.
LimeWire’s return seems to largely be hinging on its once-held brand power backed by the company’s belief that its early 2000’s fame will allow it to make its way into the competitive Web3 ecosystem. In its new iteration, the platform will be posturing as an alternative to popular NFT marketplace OpenSea, focusing on music-related collectibles.
In this regard, it is worth mentioning that LimeWire recently announced a partnership with the parent firm behind Algorand, while also revealing its plans to release its very own token LMWR for mainstream commercial adoption in the near term.
In fact, the last few months have seen a whole host of other old and beloved brands make comebacks of a similar nature. That said, while LimeWire’s revival definitely has a feel-good undertone to it, many in the industry believe that the move may simply be an attempt to piggyback on the file-sharing site’s reputation in the hopes of a quick payday.
Revivals galore
In line with what LimeWire is doing, there have been at least half a dozen other old-school names that have tried to forge a resurgence of a similar nature. For example, WinAmp, a popular media player for Microsoft Windows that was sold to AOL in 1999 for $80 million, is now entering the NFT fray, albeit with much public ridicule.
It is incredible how you took decades of good will nostalgia and removed it with a single tweet.
— Eric Bailey (@ericwbailey) March 16, 2022
Winamp will auction off its original and iconic skin as a one-of-one NFT on OpenSea, with bidding all set to commence mid-May, as part of the move. The project also plans on selling more than 20+ of its popular artwork, with each of them being replicated a total of 100 times so as to create a total of 1997 NFTs — a nod to the year the music service entered mainstream circulation. Each of these NFTs comes with a price tag of 0.08 Ether (ETH), bringing the cumulative total of the 1997 NFTs to approximately $527,000 at the time of writing.
Similarly, RadioShack, a major electronics store that went bankrupt a few years ago, announced that it will be re-entering the market once again as a decentralized cryptocurrency exchange. In its present form, the RadioShack website runs a basic derivative of Uniswap with a radio-based graphic interface, allowing users to swap various Ethereum-based tokens including ETH, USD Coin (USDC), Tether (USDT) and Polygon (MATIC), among others.
MoviePass was a venture that gained widespread notoriety back in 2018 thanks to its offering, in which subscribers could gain access to unlimited movie screenings for a paltry sum of just $10. As a result of its business model, the company had to close shop just a year later. However, and it is now looking to mount a comeback by incorporating blockchain and crypto-enabled technologies into its setup.
What’s in a brand name?
To gain a better idea of whether the entry of these once prestigious brands into the crypto sector is a serious proposition or just a quick cash grab scheme, Cointelegraph spoke to Pavel Bains, CEO of game-fi blockchain ecosystem Bluzelle. He pointed out that most of the companies in question don’t even have their original owners onboard anymore, adding:
“It’s just people who want to make some money riding this wave and thinking that using a recognized name is the way to do it. Where they fail is that the youth has no connection to these brands. I don’t think unrelated brands will have any impact as people will just shrug them off and go on. Crypto and NFTs are past the point of having some bandwagon jumpers deter its image.”
A similar point of view is shared by Chase Layman, CEO and co-founder of blockchain gaming studio Attack Wagon, who told Cointelegraph that while some of these companies may have long term intentions of jumping into the blockchain space, a majority of them are simply in it for the quick media coverage and are most likely to drop their projects after making some money.
Elliot Hill, director of communications for Verasity, a protocol for esports, video entertainment and digital content management, is a little less skeptical. He told Cointelegraph that most brands are organically waking up to the huge opportunities put forth by NFTs and other blockchain-based assets. He added:
“In the case of traditional peer-to-peer companies like LimeWire entering the space, there are certainly benefits of exploring a blockchain or NFT based solution, and this has already been proven to an extent through BitTorrent’s hugely successful relaunch and token issuance on the Tron network back in 2019.”
He further opined that blockchain, at its core, is a decentralized database technology. Therefore, any company, business or organization which uses centralized databases could conceivably use them for enhanced security, reporting, traceability and transparency.
Lastly, Piotr Zalewski, CEO of Euronin, a cryptocurrency trading and payments platform, told Cointelegraph that no forward-looking company wants to be left behind, especially those firms that are associated with the music sector. “Most firms see that music has just passed its evolution in sales as vinyl, cassettes, CDs, MP3s and now NFTs. I think this is a will to be part of the future and not a temporary hype job.”
Is all publicity good publicity?
As the saying goes: “all press is good press.” However, Lyman believes that when big brands make a mockery of what real developers associated with this industry are trying to build, it deters and distracts from projects that actually have the potential to someday change the world for the better, adding:
“While we need more eyes on blockchain tech, we also need more people to also take it seriously. If these big brands would back strong crypto projects instead of introducing what looks like a gimmick, then the belief and fervor for blockchain could increase globally.”
In his view, most of these old-school brands have yet to fully grasp the possibilities presented by crypto tech and are, therefore, in it for the short term. “I don’t see their efforts helping the legitimacy of the blockchain,” he said.
Hill, too, is of the view that there are certain types of endorsement that reduce the credibility of the crypto industry in the eyes of the public. In this regard, he pointed to projects that have paid heavily for glitzy celebrity endorsements solely to increase token sales. That said, he noted that enterprise adoption is fundamentally different from such hype-driven cycles, adding:
“We’re seeing real businesses, with real customers and clients, adopt blockchain or cryptocurrency technologies to advance their business needs and improve their processes. There will be a time in the future when companies using a blockchain-based solution will be as commonplace as companies using the internet. It won’t require endorsement because it will be an obvious business need to have some blockchain-based component.”
In Zalewski’s opinion, there is no such thing as “bad publicity or adoption,” at least in the grander scheme of things. He believes that the errors of unrelated previously famous companies that do not know the nitty gritty of this space will help shape the direction of the market in the long run. “The fact remains that the mistakes made by these companies will allow others to learn and therefore enable faster, more efficient adoption.”
While there seems to be a healthy amount of debate regarding the entry of defunct brands entering the crypto fray, there is no reason to believe that consumers will instinctively trust a project like LimeWire 2.0 just because it has some historical prominence attached to its name. Therefore, it will be interesting to see if this trend continues for much longer and if so, how it impacts the digital asset industry at large.
