Can you believe that in 2010, Bitcoin’s value was a mere $0.09? Eleven years later it hit a colossal $68,991 in November 2021!
Thanks to the unprecedented success of Bitcoin, we’ve now got an intricate and vast world of crypto assets. It’s clear that developers realize there’s an incredible amount of unlocked potential and value in the digital crypto realm.
But what are crypto assets? Are they different from cryptocurrencies?
The short answer is, yes, crypto assets and cryptocurrencies are not the same things. Let’s now delve a little deeper into what crypto assets are all about.
Forms of Crypto Assets
Since the world of crypto assets is relatively new, there is a lot of confusion on the web about how to classify them. In this guide we will keep things simple and explain to you four clear types of crypto assets that are in existence today:
- Security tokens
- Utility tokens
- Non-fungible tokens
So now you can understand that “crypto assets” is a blanket term for the four digital asset types above, and potentially others. We categorize them all as crypto assets because they all use:
- Digital cryptography
- Peer-to-peer networks
- Public ledgers (blockchains)
These three systems are key to the success of crypto assets. The cryptography aspect is important to keep an asset secure while peer-to-peer networking ensures that no centralized server is needed.
Public ledgers allow for transparent documentation of transactions and other information that nobody can change. The result is that crypto assets allow people to avoid using a middleman to verify transactions or other information.
Cryptocurrencies are the most well-known type of crypto asset. They act as a decentralized digital currency, with similarities to fiat currency.
People tend to use cryptocurrencies as money to purchase things, or they may invest in them. Some people, for instance, prefer to invest in Bitcoin while many others use it only to buy things.
Security tokens are a little like stocks and shares. They are investment assets that allow developers to raise capital for their crypto-related projects.
Developers might classify them as an Initial Token Offering (ITO) or an Initial Coin Offering (ICO). They will offer these security tokens or coins with extra benefits other than just as an investment. For instance, a developer may offer a stake in their project, profit sharing, voting rights, dividends, and more.
Utility tokens are issued for on-platform uses. They allow users who are members of a particular platform to utilize services or products available there.
The draw for people to purchase such tokens is that the platform will afford various privileges to them. You can also buy and sell utility tokens in many cases, so they are a form of investment for some.
A solid example of a utility token is Fantom FTM. Here you can learn the Fantom price.
Non-fungible tokens (NFTs) have been gaining some ground in recent times. Many see them as a new and popular way of investing in crypto assets. There are also many new ideas appearing about connecting NFTs with real-world products.
An NFT is digital data that someone stores in a blockchain, making it unique. People then trade these crypto assets. Some examples of NFTs include NFT art, music, and avatars, to name a few.
The Fascinating World of Crypto Assets
Crypto assets are becoming more and more fascinating as they develop. They leaked into mainstream culture with the rise of Bitcoin, and have grown into a huge multi-billion dollar market.
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