There is an article that was published to Coindesk.com today entitled "Killing 'Cryptocurrency': Why It's Time to Retire the Term"
The article is written by Tim Enneking.
Tim Enneking is managing director at Crypto Asset Management, which oversees Crypto Asset Fund, a regulated US cryptocurrency trading fund.
In this opinion piece, Enneking argues that the term "cryptocurrencies" is now outdated, and that new terminology is needed to describe the innovations being imagined and built in the blockchain industry.
Read the article below and my thoughts at the end.
"Killing 'Cryptocurrency': Why It's Time to Retire the Term"
By Tm Enneking
"No, that headline is not a mistake.
It’s not the cryptocurrencies themselves that should be killed off, but rather the term (hence the quotation marks). Labeling everything going on in the crypto world (space, ecosystem, universe: pick one) "currencies" is dead, passé, OBE… You get the idea.
Two questions logically arise: First, why is the term dead and, second, if it's dead, what should replace it?
As to the first, that's easy. There are two problems with applying the phrase "cryptocurrency" to what's going on in the space traditionally known by that name. First, the "coins" are acting less and less like coins and more and more like something else, perhaps equities.
In fact, for my fund, we divide the cryptocurrency space into "blue chips," "large caps," "mid caps," "small caps," "pennies," ("penny coins" seemed redundant) and "NLT" ("no longer traded").
(Now, before you think I am trying to tout my fund, please realize that we decided to name it "Crypto Asset Fund" for the same reasons as those I'm citing here. For the record, my prior fund was indeed called the "Crypto Currency Fund" – so we are following the same evolution as the crypto ecosystem itself.)
Related to this shift is the fact that, when bitcoin was effectively the only game in town, aficionados touted it as a "dollar replacement", or at least a supplement – but the target was clearly displacing, to one degree or another, fiat currencies. Now, however, with the emphasis on blockchain, ethereum contracts, Ripple bank transfers, etc, etc, cryptocurrencies are becoming more a transaction enabler than the transaction itself. Their use as currencies, per se, is clearly decreasing.
So, cryptocurrencies are rapidly migrating away from being a medium of exchange (one of – probably the most critical of – the purposes of a "currency") into enablers of exchanges.
ICOs, tokens, tethers, exchange lending, the (slowly) growing crypto-derivatives market: all reinforce the strong secular shift of cryptocurrencies to crypto "assets."
What are they?
Which leads us directly to the second question: What should we call all this stuff?
We have voted with our pens and opted for "assets" – a nice, all-encompassing fiat word that is sufficiently vague to cover just about everything that might happen in the crypto space.
Why does this matter? Because perception is reality. If we want to attract more investors and users to the crypto universe, then we need those investors to quickly and easily understand what the space offers. Mislabeling (or, at least, too narrowly labeling) the space doesn't help. The name also inevitably affects how those of us already in the space view it, and ourselves, as well.
Labels matter.
A real-life example: CNBC asked me to appear live on Capital Connection out of Singapore (the interview took place and was broadcast July 5) and to recommend "three cryptocurrencies". I declined to do so, countering with three much more varied investments in the crypto space: one lower risk (whatever that might mean), one moderate risk and one higher risk.
The first is lending (fixed income), the second is a coin (equities) and the third is an ICO (IPO or alts). The italicized terms are the fiat equivalent of these three investments, which, by no coincidence, cover the three "legs" of the typical fiat investment "stool."
So, let’s move to a much more accurate characterization of the space, ecosystem, universe, whatever (do I sense another opinion piece in the offing?) and call the sector (!) we’re working in "crypto assets" or even just "crypto", shall we?
I'd argue it makes much more sense."
Source Coindesk.com
My Thoughts...
I agree with Mr. Enneking in that we have a bit of an identity crisis in the crypto sector at the moment.
In an article I wrote a few weeks ago about cryptocurrency in the world of finance I explain how cryptocurrencies are evolving and breaking out of their original roles.
"In 2009, when Satoshi Nakamoto released his Bitcoin White Paper to the world, no one could have foreseen the powerhouse that Bitcoin has become in the last eight years. Even harder to fathom would be the massive wave of innovation and the financialization of digital assets to follow.Original cryptocurrency such as Bitcoin or Litecoin focused on being a tool for wealth preservation (Saving) and a tool to be a medium of exchange (Transacting). As the crypto space has advanced, the uses and types of tokens (digital assets) has become increasingly diverse. As the cryptocurrency sector continues to develop, there are a variety of crypto centric tools being built for investment, raising capital, delivering value and even preparing for retirement."
The challenge we face as crypto advocates and investors is to present the technology to the public in a way that they can easily comprehend. There have been many proponents of using the term "Smart Money" instead of cryptocurrency, but even that term is to constrictive. Many of the new tokens are providing utility in ways far beyond being a means of transaction.
"Digital Assets" is a more suitable term in that it is vague enough and casts a wide enough net to describe nearly everything we can build on the blockchain, at least for now. The problem with this however is that the lack of specificity will confuse the public and slow mass adoption.
I think the best approach is a division of asset terms based on use and token attributes.
"Smart Money" could be applied to coins used for everyday transactions ie Litecoin, Bitcoin, DASH.
"Gas" is a great term for tokens like Ether which "fuel" networks. Although this hasn't been brought in to public vernacular I believe it will in the future.
"Digital or Crypto Assets" could then be applied to tokens like PPY which offer what is essentially profit sharing or dividends.
Ultimately we cannot force terms or names in the industry, I think these things happen organically and on their own.
I think the more we see slang terms pop up in forums and news articles, it points to another level of social adoption.
For now, don't worry too much about what to call cryptocurrency, the industry will decide for itself as the tech develops and comes to market. Consumer behavior will drive how these assets are marketed. The fact we are even having this debate points to another leveling up of cryptocurrency in public consciousness.
What do you think?
What terms do you use or think we should use?
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