The crypto lexicon is massive and largely incomprehensible to the untrained ear. It’s growing at a rapid rate, adding new words seemingly every week. Cryptocurrencies, digital currencies, decentralisation, tokenisation, coins, tokens, smart contracts, mining, proof-of-stake, gas… It’s difficult to keep up. Terms used in the cryptosphere are easily muddled and people tend to use words interchangeably without knowing the difference between them.

This is particularly true of crypto-assets and cryptocurrencies. In Mark Carney’s recent speech about the future of money he referred to cryptocurrencies as ‘crypto-assets’ throughout. The majority of policymakers do not consider cryptocurrencies to be true currencies and BABB is aligned with this view. We often see the terms cryptocurrencies and crypto-assets used interchangeably, confusing new users and regulators and stifling the discussion on the future of these assets.

So, what is a crypto-asset and how does it differ from a cryptocurrency?

Put simply, a cryptocurrency is just one type of crypto-asset. A crypto-asset is an umbrella term; the special sauce that powers most applications of blockchain technology. More specifically, a crypto-asset is a digital asset which utilises cryptography, peer-to-peer networking, and a public ledger to regulate the creation of new units, verify transactions, and secure the transactions without the intervention of any middleman.

Crypto-assets facilitate the decentralisation of industries, removing the middlemen through the use of cryptography and peer to peer networking and in turn reducing costs. Whether you’re making payments, file sharing or using the internet of things (IOT), you usually need a crypto-asset to make it happen.

As of April 2018 there are 1591 crypto-assets. There are four types: