When you hear the term cryptocurrency, what comes to mind? Maybe Bitcoin, Ethereum, Oyster, Ripple, or maybe even BitConnect. Jokes aside on that last one, but with the space having grown to over 1600 projects on CMC and new ones being added daily, are they really all cryptocurrencies?
Cryptocurrency incorrectly encompasses projects which are not currencies at all. They may share the same underlying blockchain technology to that of Bitcoin, but surely they do not aim to be a store of value, unit of account, and medium of exchange. Is Ethereum a currency? No. Ethereum is a decentralized smart contract platform that is powered by its native token, Ether.
Ether is a currency that is used to pay for the computations of dApps – decentralized applications – running on Ethereum. So then what is Ethereum? Chris Burniske, in Cryptoassets: The Innovative Investor’s Guide to Bitcoin and Beyond, defines this decentralized world computer as a cryptocommodity. The underlying dApps launched on this platform are referred to as cryptotokens – finished digital goods and services.
An example of a dApp running on such a platform would be the Oyster protocol. Users pay with its native token, PRL, in order to purchase decentralized storage solutions.
Overarching the many projects in this paradigm shift landscape is the term cryptoasset. Cryptoassets encompass the loose subsets of projects that are referred to as cryptocurrencies (BTC), cryptocommodities (ETH), and cryptotokens (PRL).