Crypto Currency? No, Not at All. More like CryptoCoins! The Case for Crypto- as an Asset Investment, Not a Currency. (Originally published 12.24.2017)

The world of Crypto “Currency” continues to explode beyond imagination.

There are new well over 1,000 new listings on various crypto exchanges.

However, there is still (in my opinion) much confusion in the world “currency”.

I don’t believe the new crop of ICO’s Tokens are really a currency at all, but more like a collectible “Coin”.

Indeed, I think most of these new “asset” listings should not be called Crypto Currency at all, but Crypto Coins.

Even the ubiquitous Bitcoin, with it’s quasi currency features, is acting more and more like a speculative investment asset for most people, than it is as a new type of payment currency.

Perhaps Bitcoin, or a few other offerings may get to the fluid currency usage — -once you can figure out how to get past the speculative volatility that is incumbent to Bitcoin and others- but for most of the ICO’s, they were not created to be a currency at all.

Thus, I’ve “coined” then term — CryptoCoins.

Indeed, the very definition of the word Coin has a couple of meanings;

First, a Coin can be defined as “a flat, typically round piece of metal with an official stamp, used as money.”

In that sense, you might say that the Crypto offerings can be a coin as they are used as money. But, that would belie the fact that an actual “coin” is a horrible representation of a fluid currency. Anyway, want to try and buy a car with a couple thousand rolls of quarters?

I think not.

Indeed, coins in todays world are almost as nonfunctioning as a fax machine. They’re still around, but for how much longer?

However, many older, and at times more rare coins are indeed “collectibles”. This means a rare coin could have an inherent value, and that value could go up…or down…on two basic variables;

1- Supply (how many were made or minted), and

2- Demand (how many people want that particular coin).

Why is this relevant? Because to me, the new ICO’s are really a type of investment asset, that can go up or down based on supply and demand, and have little to no utilitarian function — ala being used as a form or currency.

So, in that vein is another definition of the term “Coin”;

“To invent, create, make up, conceive, originate, think up, dream up or conceive something new.”

Indeed, I want to “coin” the term” CryptoCoins as opposed to Cryptocurrency.

If you look at an ICO offering such as Ripple (XRP) or Tron (TRX), or pick any one, these are much more a new type of speculative investment asset than they are or ever will be a crypto currency.

If you think about this further, even the “symbols” of the ICO’s is much like a stock symbol (EOS, NEM, etc.) all of which one can buy and sell, but not really use as payment for much of anything.

When you look at the term “Currency”, it is defined as:

The first definition “a system of money in general use in a particular country”, somewhat fits the aspect of Bitcoin, except it’s not a particular country. Even Fiat currency now is “issued” by a particular country but is used ubiquitously throughout countries around the world.

The banking system has made fiat currency easy to use across countries, especially with debit cards (digital money) or even credit cards (borrowed digital money). The issue with fiat is all of the middlemen and transfer fees.

The second definition, much like the word “coined”, is “the fact or quality of being generally accepted or in use”. For instance; “the term gained currency during the second half of the 20th century”

So, for currency, it’s both a form or payment, and a creation of a word or term.

For currency as money, this means there is more ubiquity in the ability to use it for actually payment of goods and services.

Payment, in and of itself, was not the great leap forward for mankind as it relates to commerce.

In the beginning of man, the first form of commerce was actually Barter.

I’ll pay you in my Chickens or some of your Milk.

However, over time, that system breaks down as you need portability.

Enter “portable” money, or the Cowrie seashells of the South Pacific called Moneta Shells.

The ability to ascribe a certain value to a piece of a Moneta Shell, took the world from a one-to-one trading system, to a one-to-many.

A farmer could now give up his chickens (and if he didn’t want milk), could get in return a value of Moneta Shells, and take that value to another farmer to get grain to feed his chickens.

Over time the use of Moneta Shells grew into a new form of commerce which was at first printed coins, and eventually fiat or paper money.

The word “Money” is actually derived from the term Moneta- which was the first form of portable currency.

Over time, that paper money was replaced with a bunch of 1’s and 0’s on a ledger in your bank account.

For those people who think that new digital currency is “new”, should really consider that the same money sitting in your bank account, is nothing more than digital currency.

When you use your debit card, you are just transferring digital money from one account to another.

How did that money get into your account?

You deposited it.

Much like Bitcoin. How do you get Bitcoin? You “buy” some, and then deposit it into your account.

You may be acquiring Bitcoin as speculation as an asset you hope goes up. Or, you may want to use it to purchase other items — perhaps even use it to buy crypto coins from an ICO.

Thus, the difference between a Cryptocurrency (something used for potential payment) and CryptoCoins (something used as a stored value) becomes clearer.

This same discussion reminds me of the early days of the Internet- circa 2000 or so.

In those days, there was a rush of online platforms and they were all called “Exchanges”.

Esteel, PlasticNet, etc.

These news platforms were not exchanges at all. Instead they were nothing more than glorified auctions.

Yet, the word exchange was bastardized to all of these sites, where there became no real difference between an exchange and an auction.

This reminds me of the same argument above.

To link ALL ICO’s tokens/coins into the same field as a currency/payment solution, does a disservice to both.

Even further, it potentially taints this burgeoning industry as a whole.

There is so much excitement around the current crop of CryptoCoins, and the speculative trading is driving returns that are beyond approach (sometimes 100’’s of percentage points or more in a single day.

However, as sure as there have been and are current stratospheric success, there are going to be a few colossal failures.

When that day comes, I hope it doesn’t slow down the industry as a whole.

Think of the ill fated early web sites like Toys.com and Pet.com (I love you Bill Gross for trying), or ones like Webvan and Ubid. All great technologies, just ideas that may have been ahead of their time.

In that moment of the first internet bubble there was much consternation about the “future” of the internet.

Heck, even I was interviewed along with Jeff Bezos in 1997 on TV.com and the premise was that e-commerce would never take off.

Well, obviously the Internet grew and created new technologies, efficiencies, and industries that were both imaginable and unimaginable.

To that end, I truly believe that the underlying technology of Blockchain (which is driving Bitcoin and the ICO’s), will have that same impact and profound ways — some of which we can imaging (Hyperledger, etc.) and some of which we can only imagine (EOS).

Until that time, I need to go to CoinCap and check the balance of my CryptoCoins. 😊