The whole cryptocurrency market is an asset class for investment. The world of crypto came into existence more than a decade back with the first cryptocurrency bitcoin. Over time, a lot of other cryptos have been created by several developers. However, the crypto asset market only meant Bitcoins for a long time for the enormous growth this particular crypto has to achieve. It was after the popularization of this coin that the asset market started experiencing an influx of other cryptocurrencies and crypto assets. Today the scenario is much different from what it was. Even the definition of crypto asset and cryptocurrency has changed and today they are much more different. Open account to start your bitcoin trading experience. This is what we will learn about in this write-up.
What Do Crypto Assets Mean?
When you think of it in depth, cryptocurrency and crypto assets are not the one and same. The crypto asset is the whole crypto market where people invest their money and on the other hand, cryptocurrency is just a type of crypto asset. There are several others.
However, it is also like the two sides of a coin: cryptographic currency and cryptographic asset. No matter which side you look at they are the same without any physical existence. Rather they are just digital assets. They are similar to what you would see on the balance sheets of a company in its traditional form.
Crypto assets are what the business house owns in the form of resources that are either tangible or intangible. They are one side of the balance sheet and it is the exact opposite of the liabilities side of the balance sheet. Crypto assets can either be in the form of fixed assets or current assets.
Characteristic Features of Crypto Assets
To understand crypto assets better you need to analyze their characteristic features to get a grasp on them. So, let’s know what they are-
- Crypto assets make use of cryptographic encryption technology.
- The asset is highly dependent on the distributed ledger technology of blockchain.
- A third party is rendered null and void when issuing crypto assets is concerned.
- Crypto assets are mainly used for three purposes namely as a means of exchange, to get goods and services, and for investment purposes.
How To Store Crypto Assets?
Digital assets or crypto assets cannot be stored in conventional banks or in safes in your homes. They need to be stored in the respective blockchain ledger. To get access to that blockchain ledger you would require a set of public and private keys that are saved in crypto wallets safely. So, you need a wallet for storing the assets.
So, in essentiality, a digital wallet is that stores the private keys that give you access to your assets while the blockchain ledger is where you store the assets.
The Various Types of Crypto Assets
When you think and talk of crypto assets chances are high that you will straight away think about Bitcoins. That is one of the most popularly known crypto assets across the globe. But if you care to delve deeper into that class of assets you will realize that there’s much more to it than Bitcoins. They are classed into 8 categories or types of assets:
Payment currencies or cryptocurrencies:
Payment currencies which are currencies like Bitcoin and Litecoin usually make payments using blockchain technology.
Blockchain economies function as blockchain technology intending to be more scalable, interoperable platforms, and sustainable. Good examples of these assets are Ethereum and Cardano.
It falls under crypto tokens which are a kind of crypto asset that has an extra set of encryption codes to keep all transactional information a total secret.
Utility tokens are used to increase the effectiveness of digital advertising. They are coins like BAT and ZRX.
Security tokens are represented as stakes in the blockchain and have fair enough chances of expectations of making profits. It is represented by BCAP.
Stablecoins are those coins that have pegged their values to some asset to reduce its volatility.
Decentralized finance is a service that gives access to all decentralized financial services with smart contracts.
These types of crypto assets are determined by their rarity.
So, these are all the crypto assets that you can purchase and own. But be careful to study further before making a move into the market.