Definitely Definite Definitions

While it is easy to be lured to statements that there are more than 3,000 cryptocurrencies, this is simply not correct. There are roughly 250 meaningful minable, distributed crypto coins. There are lots of dead ones that don’t trade but these are unlikely to ever make a comeback.

Ethereum tokens are not currency, they can be equity-like or bond-like or all sorts of permutations of financial instrument, but they are not bitcoin-like currencies unlike Ethereum itself. Tokens, created by Ethereum and other such token-creating blockchains, are different in almost every way to how a bitcoin-like blockchain operates. They should be considered separately from bitcoin and altcoins, in the same way as a Treasury bond or a stock certificate of Softbank should be judged differently from Japanese yen.

When it comes to crypto coins, there are also different types. There are centralized privately maintained coins that are issued privately. These coins have a central control and like a luncheon voucher or an American Express travellers’ cheque, they have an organization behind them that controls their supply. These coins may be the future, but the crypto environment was spawned by a permission-less, trust-free, distributed concept. These private currencies with their centralized methodologies run diametrically opposed to the whole bitcoin ideal and have an altcoin systemically structured to be the opposite of the original crypto creation, which seems to me, at least, to be problematical.

I choose not to put much trust in the centrally issued coins. You need huge piles of government regulation to even attempt to control the privations of predators in financial services. There is next to none for privately issued cryptocurrency. The only law in play is the so-called “law of code,” the way distributed crypto coins regulate themselves by code and consensus, which is tremendously powerful when cryptocurrency is not centralized. There is no law of code when the blockchain is privately and centrally controlled.

Where there are resources there are predators and while they strike at the periphery of bitcoin like all the other crypto instruments, none has penetrated the blockchain itself. The trouble with private blockchains, is this safety goes away, just as it does for any currency relying on a central authority for its safety.

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