What Are Cryptoasssets in Blockchain
So as you are aware of Blockchain technology and have of the basic idea of it, in this article we will be talking about the cryptocurrency part of the blockchain, more specifically about the crypto-assets. As we know, an asset is something that holds value, similarly, a crypto-asset is an asset that is based on cryptography. Mostly it is a virtual asset that is stored and maintained on a blockchain.
Before knowing more about the crypto assets, let me make you aware of the value of crypto assets in the present time. In May 2016, the crypto-asset market valued to $9 Billion. Isn’t it a huge amount, let me surprise you again. In the present time, November 2019, in almost 3 years, it has already surpassed the value of $420 Billion in size. Seems interesting right? This is the power of crypto and it is still not unleashed. The explosion of value in crypto-assets has surely captured the attention of the developers, entrepreneurs, media and the financial systems.
Coming back to crypto-assets, there are at least seven defined types of crypto-assets as listed below:
- Cryptocurrencies (Bitcoin, Zcash, Monero and Dash)
- Protocol Tokens (Ether, Icon, Aion, Cosmos and Neo)
- Utility Tokens (Golden, Bat and Spank)
- Security Tokens (Cryptoequities and Cryptobonds)
- Natural Asset Tokens
- Crypto collectibles (Cryptokitties and Rare Pepe)
- Cryptofiat Currencies and Stablecoins (Fedcoin Proposal, Singapore’s Project Ubin and MakerDAO)
Let us learn about each of them briefly, starting with the most widely used crypto-asset, The Cryptocurrencies and the biggest cryptocurrency is Bitcoin. After bitcoin was introduced, it gained value near 2015, when it crossed the value of a couple of billions and now it has a value of more than a hundred of billions.
Cryptocurrency is a digital currency which works on different encryption techniques and based on cryptography.
- Protocol tokens/coins are some sort of cryptographic coins or tokens provided by a platform to access the services the underlying protocol provides. They are different for all the different individual protocols.
- Utility tokens are digital tokens of cryptocurrency that is issued to raise funds for the development of that cryptocurrency and the owner can later use to purchase a good or service offered by the issuer of the cryptocurrency.
- Security token is a crypto-asset that pays dividends, profits, shares or interest or invests in any other asset that also generates profits. A security token is meant to invest in money, common enterprise or expects to make a profit from the effort of others. Utility tokens and security tokens are very similar with small amount of differences.
- Natural asset tokens are crypto-assets which aim to tokenize the physical assets of the world and promise to provide rewards to the industries and firms as well as other common public who help reduce pollution of the environment and help in maintaining sustainable development goals.
- Crypto-collectibles are crypto-assets that are unique digital assets based on cryptography and they require all the tokens to be identical, and each crypto-collectible token is unique or limited in quantity. Typically they are visualized as physical objects like pets or human avatars.
- Stablecoins are crypto-assets that are based on some “stable” asset and varies its value depending on the value fluctuations of the compared asset. They are redeemable in exchange to metals, cryptocurrencies or other exchange-traded commodities.