How the Crypto Industry Seesaws Between Assets and Infrastructure

How the Crypto Industry Seesaws Between Assets and Infrastructure

Morris Dancers on a seesaw in the Cotswolds, U.K.
(Tim Graham/Getty Images)

In the beginning, there was bitcoin. And with bitcoin, a new asset was invented. And with that new asset, the way we interact with capital was redefined.

Bitcoin achieved both of these things. It created a new form of money: one that needed neither central banks nor collateralization. One that was provably scarce and governed only by code and those who wrote and ran it. 

It also created a new model for ownership, trading and transacting. This new model required no third parties or middlemen. It meant that anyone could directly control their assets and could transfer them in a purely peer-to-peer manner. A new form of money. A new model of ownership. 

With , there was born a new industry. The cryptocurrency space. The blockchain world. The creation of bitcoin spawned thousands of new assets and just as many new ways to interact with those assets. And while these two forms of innovation – assets and infrastructure – have often occurred side by side and have frequently happened under the same banner, they should not be confused. New assets do not necessarily create new experiences of ownership and trade. Similarly, new models of ownership and trade do not always require new assets.

The fact that bitcoin marked the invention of both a new asset and new infrastructure has long been a source of confusion and has resulted in the conflation of the two. It’s time we started noting the difference.

The industry, while rarely recognizing it, has over the years between prioritizing the creation of new assets and prioritizing the building of new infrastructure.

The period from 2013 to 2015 saw the emergence of altcoins like zcash, monero, ethereum, Ripple, litecoin, dogecoin and a multitude of others. These represented new assets. Some of these new assets also offered users fundamentally new ways of interacting with their assets and with each other: privacy and programmability, for example. Others did not offer much that was new at all, besides branding. The cryptocurrency universe was left holding many bags it wasn’t quite sure what to do with.

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