Crypto

Crypto is originally an abbreviation for crypto currencies, the currencies of decentralised money systems such as Bitcoin and Ethereum. In this context, crypto refers to the cryptography used in transferring such a currency. By adding a digital signature, the owner proves that he or she may transfer the digital asset to another person.

Nowadays, crypto is an informal umbrella term for all crypto-assets. These are digital assets that are not managed by a central party such as a tech company, bank or government, but whose ownership is noted in decentralised records and can be transferred peer-to-peer. As such, the term crypto identifies a new asset class.

New financial markets have emerged around these new assets, with thousands of companies forming a vibrant sector worldwide. The word crypto is also used to refer to this activity as a whole. Thus, people are employed 'in crypto', and governments worldwide are working to create 'crypto laws' that apply to the entire industry.

It is important to realise that crypto as an asset class contains a wide variety of assets. It started with bitcoin as independent digital money. Then new assets appeared, trying to apply what Bitcoin does for money to other kinds of digital assets. Think identity data, access cards, art. Or proof of ownership of a loan, or that you are part of a decentralised organisation.

A common mistake is to equate crypto with a specific asset or application within the category. One then gives the impression of absolute homogeneity, when the opposite is true. For instance, Bitcoin as the first and most decentralised currency is incomparable to the properties of a digital art object or a stablecoin issued by a central party.