The biggest misconception in the world of cryptocurrencies is that they are assets. More specifically, a monetary type of asset. This is a misconception for a simple reason: within cryptocurrency networks or systems, there is no resource that can provide a benefit to cryptocurrency owners. And it is precisely this ability to provide a benefit that defines an asset. Let's look at a few examples of assets to understand this.

With stocks, owners can benefit from the company's profits or capital. Profits can be paid out as dividends, and capital can be liquidated or used to repurchase shares.

With real estate, precious metals, oil, wheat, etc., the benefit comes from the things themselves. In other words, owners can use them for housing, making jewelry and electronics, obtaining energy or food, etc.

A somewhat more complex example of assets is fiat currencies, in which the benefit comes from debt. Namely, units of these currencies are created by lending to companies, individuals, and governments by commercial and central banks. This means they represent debt. People then invest goods, services, and labor in that debt by exchanging them for the units with the aforementioned debtors. However, since debtors must return the units to banks, current owners of the units benefit from this. This is because companies and individuals must sell them goods, services, or labor every time they need the units for loan repayments. And governments must allow them to pay taxes in these units. If companies and individuals do not make these sales, they will default. Then the unit owners will benefit by having the banks sell them the seized assets of those debtors to obtain the units for closing out unpaid loans.

Within cryptocurrency systems, there is nothing like that. There are only records.

For example, a few moments ago, one person gave another $58,396. In the Bitcoin system this was recorded as an increment of 1 to the number associated with the first person's address and a decrement of 1 to the number associated with the second person's address. Initially, people gave each other $0.001 for the same numerical record (+1/-1). Such records are also created when energy is spent to maintain a decentralized database with those records (blockchain).

Obviously, these numerical records do not represent the quantity of assets. That's simply because a person whose number has increased does not, as a result, have the ability to realize greater benefit from a resource within the cryptocurrency system. In the case with of shares or fiat currencies, such a person would be able to receive a larger dividend from a company or more goods, services, or labor from bank debtors. From this, only one thing follows: the aforementioned records are in fact log entries. This log tracks the activity of a scheme resembling a pyramid scheme where participants give each other assets in the hope of receiving more assets from new participants in the future. With each such giving, new entries are added to the log, and everything is stored on the blockchain.

Since cryptocurrencies are frequently presented in economic terms to the public, their owners believe they possess a monetary type of asset and use it to conduct transactions. However, since there is no asset, what they actually possess is the ability to add entries to the log. And their use of "wallet" applications is not about conducting transactions but about exercising this ability to add.