​Сrypto-currencies as a ‘new asset class’

​Сrypto-currencies as a new asset class

People have started thinking that crypto-currencies are a completely new thing, a ‘new asset class’ – and that if a business starts issuing tokens it will be able to make a positive transformation, as well as creating an ICO (Initial Coin Offering). BUT NO TOKENS OF ANY KIND ACTUALLY EXIST! Seriously, this is no joke! The items being called ‘tokens’ currently are just a conventional balance of some account or other – and this balance can represent whatever its creator wants it to. It could show a user’s reputation in a system (Augur); a deposit in US Dollars (Tether); the quantity of files saved within it (Filecoin); the balance of an internal currency system (Bitcoin); shares in a company… or in fact, almost anything at all. The term ‘token’ in computer technology conveys two of these concepts – either a gadget that gives authorisation to users (such as a special variety of thumb-drive); or a fixed series of characters which identify a user (such as an API Key). This isn’t any personal battle of mine to clean-up linguistic usage. However, people are getting muddled, and are starting to believe all kinds of twaddle. Calling things by their proper names makes it immensely easier to evaluate business ideas.​

Illustration by Katerina Krashtapuk

Pavel KravchenkoCryptographer, founder of Distributed Lab