All files shall have a descriptive file extension name.

[postmodern]

Generally a good practice and helps with Windows support.

[straight-shoota]

I understand why people might reject this, but I think it's a good idea. It's relatively common practice to name the file just LICENSE without an extension, but naming the file with an extension is also popular. Even Github help states it's usually named LICENSE.txt or LICENSE.md (see https://help.github.com/en/github/creating-cloning-and-archiving-repositories/licensing-a-repository).

[RX14]

It feels different but I'm OK with it

[Sija]

If any, I'd use .md, since that's sth more usable these days than plain text.

[straight-shoota]

On second thought: While I still agree with this change, I'd suggest not to merge it before reviewing other aspects of crystal init as well. I think it needs some love and further improvements.
I don't like to stall this, but it's also neither a huge change nor very important.