‘Crypto’ is dead—long live the digital transaction era

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Using the word “crypto” to describe Bitcoin is an inaccuracy that comes from early misunderstandings and a false connection to distinctly different systems. As we move into an era where Bitcoin will begin to power the digital transaction economy, it’s time to let go and use more appropriate terms to describe this industry. So, “digital currency” it is.

On that note, “mining” also needs to go. Transaction processors play a far more important role than simply “digging up” new coins. “Mining” only applies to the disappearing block subsidy, which is only there to prime the pump—the true function of the nodes is transaction processing and this takes over as the subsidy dies. No more coal mine stock photos, or gold mining puns in articles, let’s give them the respect they deserve.

After 11 years of Bitcoin, we’re grown accustomed to seeing these expressions. But something never felt quite right about them. They seemed forced, bolted-on, a rushed attempt to describe a new industry using words people could relate to somehow. And over those years, “crypto” and “cryptocurrency” have also acquired the stigma of anonymity, crime, and get-rich-quick schemes like ICOs.

“Digital transaction” and “transaction processors”—get used to those expressions, because you’ll be seeing them a lot more often in the future.

‘Bitcoin is not like this’

Bitcoin creator Dr. Craig Wright described the need for more accurate descriptors, saying:

“Cryptocurrency is linked to a lot of discredited systems (right back to eCash) that are linked to black market and illegal use cases (drugs, money laundering etc). Next, Bitcoin is not encrypted. Blind cash systems such as Digicash used cryptographic constructs directly and are associated with encrypted transactions that cannot be traced. Bitcoin is not like this.”

“Bitcoin is sent in clear text. The hash is an index to the identity exchange between peers (people) but nothing is secret. It is private but not hidden.”

There’s another, er, key difference. Dr. Wright continued:

“With encrypted systems, the loss of the key means the inability to access data. Bitcoin is not encrypted. The transaction is published publicly. So, nothing is going to stop recovery if the nodes agree (nodes enforce rules and courts issue rules).”

“Even the NSA cannot force access to an encrypted file when the private key is destroyed, but, again… Bitcoin is clear text and public. So, losing a key doesn’t mean the transaction is lost.”

“I used digital signature algorithms in bitcoin, but this is still not cryptography. It is a system that uses the same maths in a new manner.”

He also noted that “Bitcoin was never a new technology.” In his 1996 piece, “The Wild, Wild Web,” Gregory Spears articulated web IPOs, which used tokens to raise funds. We now call these ICOs, but the difference is that a blockchain stops the Ponzi schemes from deleting logs. Dr. Wright said:

Token security offers and capital raising dates back decades. Bitcoin was never a new technology in this area.

In the Nineties…

“Cryptocurrency” is a word that comes from Dr. Wright’s favorite decade, the 1990s. Early allusions to the term run alongside “untraceable” and “anonymous” money—which has shown itself to be undesirable. Interestingly, some of the first published references come from those concerned with investigating its uses. There’s the NSA’s “How to Make a Mint: the Cryptography of Anonymous Electronic Cash” from 1996, also referenced in The American Law Review in 1997.

It’s a difficult word to say, and one that causes outsiders’ eyes to glaze over. If they can relate to it at all, their minds subconsciously connect it to more negative aspects of the past like scams, bubbles, and crime.

Writers also know it’s a difficult word to type. If you don’t believe us, search the web for “crypocurrency” and “crytocurrency” and see how many results you get.

We know you’ll check the whitepaper, so here it is

For the record, Satoshi Nakamoto‘s 2008 Bitcoin whitepaper does not refer to “cryptocurrency” or “miners” the way they’re commonly used in today’s discourse. There are just two sentences that allude to these terms. This one:

What is needed is an electronic payment system based on cryptographic proof instead of trust

 And this one:

The steady addition of a constant of amount of new coins is analogous to gold miners expending resources to add gold to circulation.

Bitcoin is “based on” cryptography, but it is not itself a form of cryptography and it doesn’t function the same way. Contrary to popular belief, it is not “secured by” cryptography either. Bitcoin has an economic model secured by incentives and costs—transaction processors do their job for profit, and hacking or taking over the network is prohibitively expensive.

Cryptographers themselves have never liked the word “crypto” for digital transaction networks. That abbreviation describes their field, and many have expressed displeasure at it being reapplied to just one specific application. And miners? Like Satoshi said, it’s only meant to be an analogy—a comparison to allow newcomers to more easily grasp what’s going on.

We’re happy for the real cryptographers to have their word back, and restore it to its proper meaning.

Bitcoin and the digital transaction industry are mature now. The industry is ready to move on to greater challenges, and in doing so must discard the expressions that narrowed its mission so much. It gives us great pleasure to announce that crypto is dead… long live the digital transaction era.