With 8 billion people now occupying the planet, the population of the entire world has passed a significant milestone. The popularity of cryptocurrencies, too, is expanding significantly.
According to Singapore-based blockchain company TripleA, over 320 million people would be using cryptocurrencies globally as of 2022, with a global ownership percentage of about 4.2%.
Market research firm GWI suggests that as much as 10.2% of global internet users aged 16 to 64 crypto asset holders.
You would be wondering what are crypto-assets? Decoding what they imply would be certainly interesting to do
.
WHAT IS A CRYPTO ASSET?
Crypto assets are a digital representation of value that you can transfer, store, or trade electronically that relies on decentralized ledger technologies such as blockchain to secure, validate, and record transactions.
In short, Crypto assets can be used for three different purposes: investment, exchange, and access to goods and services.
WHAT ARE THE DIFFERENT TYPES OF CRYPTO ASSETS?
Crypto assets include not only cryptocurrencies, but also non-currency assets such as non-fungible tokens, security tokens, and utility tokens, which are all stored on a distributed ledger.
Cryptocurrencies: Crypto assets such as Bitcoin and Ether, which are native to their own blockchain network, are known as coins.
Coins are used as ‘fuel’ to carry out transactions on blockchain networks. For instance, to create and upload a smart contract on the Ethereum blockchain, a user will have to pay a small fraction of Ether to cover the transaction costs.
Non-fungible tokens are those that represent ownership of a one-of-a-kind tangible or intangible object, such as a song, video, or piece of designer clothing. Non-fungible tokens are those that cannot be traded for one another.
Security tokens are frequently sold or auctioned as part of an Initial Coin Offering (ICO) or Initial Token Offering (ITO), allows businesses to raise funds to fund a new idea or business model.
A stake in the project or additional rights, such as voting rights, are frequently included with the security token. Security tokens are digital, liquid contracts for fractions of any existing asset, such as real estate, a car, or corporate stock.
When investors use security tokens, they can expect their ownership stake to be preserved on the blockchain ledger.
Arca Labs’ Arcoin, which is registered with the SEC and represents shares in Arca’s U.S. Treasury Fund, is an example of a security token.
A utility token: Is a type of token that aids in the capitalization or financing of projects for startups, businesses, or project development groups. The ERC-20 token, for example, is based on the Ethereum blockchain.
Security tokens give you ownership in an ecosystem, whereas utility tokens are used within it. Tokens: Are crypto assets that do not have their own native blockchain network. Rather, they are used as stores of value for projects that are built on top of a blockchain.
About Author
Manoj Dharra
You need to login in order to Like
