Why I like the term, “Cryptoassets”

Summary

The author prefers the term "cryptoassets" over alternatives to describe digital assets secured by cryptography, emphasizing its broad applicability and potential for mainstream acceptance.

Abstract

In a 2016 paper, the author, along with Adam White, argued that bitcoin represented a new asset class. Initially, they were dissatisfied with the term "cryptocurrency" because many of these assets do not function strictly as currencies. They considered various naming conventions, ultimately settling on "cryptoassets" as a term that balances familiarity with specificity. The author justifies the use of "crypto" due to its connection to cryptography, a foundational security mechanism comparable in significance to the invention of packet-switching for the internet. The term "assets" was chosen for its broadness and to avoid alienating readers. While "cryptoassets" may be favored by enthusiasts, the author speculates that "tokens" might become the preferred term for the general public, similar to how "stocks" are more commonly used than "equities" in finance.

Opinions

The author and Adam White disliked the term "cryptocurrency" because it doesn't accurately represent the diverse functions of digital assets beyond currency.
They explored alternative naming conventions such as "cryptomark," "cryptobit," "cryptostamp," "ledgermark," and "consensobit," but found them lacking.
The author appreciates the term "crypto" as it relates to cryptography, despite some mainstream aversion due to its association with the word "crypt."
"Assets" was chosen as the second half of the term for its inclusivity and to prevent confusion among readers.
The author acknowledges that "cryptoassets" might be more appealing to crypto enthusiasts, while the broader population may gravitate towards "tokens" and "token markets."
The author values public input on the terminology, recognizing the collective role in shaping the industry's language.

Why I like the term, “Cryptoassets”

In May of 2016 I released a paper with Adam White of GDAX detailing why we felt bitcoin was ringing the bell for a new asset class. At the time, we knew we didn’t like the term cryptocurrency — as many of these assets aren’t currencies in the strict sense — but didn’t know what else to call the asset class.

We resorted to the following, “In our opinion, it may be better to consider other naming conventions, such as cryptomark, cryptobit, cryptostamp, ledgermark, or consensobit.” All of these were pretty bad, but the thinking was as follows: the first half of the word should refer to a mechanism that secures these assets, while the second half should refer to a unit of account within the aforementioned security mechanism. Hence the hodge-podge of ideas.

I like crypto as the first half of the word, even though some people hate it — particularly the mainstream. I think the mainstream hates crypto because of its nearness to the term crypt, a vault where dead people are buried. Not the most becoming association. But crypto is short for cryptography, and specifically, the invention of public key cryptography in 1976 is of the same magnitude of importance to cryptoassets as the invention of packet-switching in 1960 was to the internet.

Cryptography simply refers to a mechanism allowing parties to securely transmit information to one another across insecure channels. It’s the science of secure message passing, or in the case of cryptoassets, secure value passing. Every 8-year old understands the power of that. Consider the first half of the term put to bed.

Now, the second half of the term, which needs to refer to the unit of account within the security mechanism of cryptography. While writing Cryptoassets: The Innovative Investor’s Guide to Bitcoin and Beyond, Jack and I clearly settled upon “assets” as that second half. We did this because it’s sufficiently broad, and not so foreign as to cause an allergic reaction amongst readers. I like it, but don’t love it, because no other major asset class has the term “asset” within it. But is mark, bit, stamp or _______, better?

This is where I like the term token, and when I think about where the nomenclature of this space may go, I could see cryptoassets being akin to equities, while tokens are akin to stocks. Most people outside of finance don’t use the term equities, they prefer stocks, or the stock market, while finance geeks lean towards equities and its derivatives. Similarly, I could see cryptoassets growing into a term used by crypto geeks, while the broader population aggregates towards tokens and token markets.

I’d be curious to know what you think, too, as the beauty of this space is we get to define it together.