Bitcoin grabbed the world’s attention in 2017, and whenever people describe crypto assets, they assume the only crypto asset is Bitcoin. However, since Bitcoin’s debut in 2009, other types of crypto assets emerged as well. In fact, Bitcoin is a type of cryptocurrency, which is a type of crypto asset. Crypto asset is a digital asset that utilizes cryptography, a peer to peer network, and a public ledger, which is usually blockchain, that serves as a public financial transaction database. Some people think that crypto assets are mostly used to store value in the digital world, but the uses today had evolved into way more than just storing value.
Since cryptocurrency first launched, the market cap had exploded from $10.5 Billion in January of 2014 to $228 billion as of the time of writing. At one point of the peak of the market in 2017, it had surpassed $816 billion. The adaptation of cryptocurrency had led to a lot more development in the blockchain and crypto asset world.
Let’s explore the types of crypto assets:
- Cryptocurrency: They are native blockchain assets intended to store value and to be used as money. They usually do not have many features. Their main focus is just to define and transfer native blockchain assets. Some of these cryptocurrencies are more anonymous than others. They are normally decentralized, except for Ripple. Of course, this started with Bitcoin, but since 2009, there have been a lot more cryptocurrencies than just Bitcoin. The following are a sample list of other cryptocurrencies: Litecoin, ZCash, Dash, Monero, Stratis, Bitcoin Cash, Byteball, Bytecoin, Stellar, Decred, PIVX, Monacoin, Vertcoin, Digibyte, etc.
- Platform tokens: They are designed to act as a platform to support a wide variety of possible applications. They make thousands of other crypto assets possible with their utility. They are often used specifically to generate use of the platform. For example, holding NEO generates NEO Gas token. Other coins include: Aeternity, Aion, Wanchain, Ethereum, Ethereum Classic, New Economy Movement, Iota, EOS, Waves, BitShares, Lisk, Qtum, MaidSafeCoin, Cardano, Tron, Syscoin, Icon, Rchain, Zilliqa, Ontology, etc.
- Utility tokens: They are sometimes called Protocol Tokens, which provide users with future access to a product of a service. They are open networks but designed with a specific use-case in mind. Examples include Augur, Factom, Golem, Gnosis, OmiseGO, Kyber Network, Hcash, Siacoin, GameCredits, 0x, Populoous, Status, Storj, Aragon, etc.
- Security tokens: They represent an off-chain asset. They sometimes generate fees-for-service, and are mostly backed by company equity. For example, Binance coin promises all their coin holders a half off of the trading fee on their platform, and if a trader holds Kucoin, it pays dividends daily from the trading fees the platform collects from the users that day.
- Natural asset tokens: They are exactly what they sound like, which is converting real-world assets such as stocks, real estate, gold, oil, etc into token form. Traditionally, these assets are difficult to be traded, but with the aid of blockchain and tokenization, these could be more easily tradable. Currently, traders could turn to RMG, the Royal Mint, to trade physical gold.
- Cryptocollectibles: They are cryptographically unique, non-fungible digital assets. Each of the cryptocollectible is unique or limited in quantity. A great example would be Crypto Kitties! Cryptokitties took the blockchain by surprise during its launch in 2017 when it became so popular that it lagged the blockchain.
- Crypto-fiat currencies: Failing fiat currencies like the one in Venezuela that it is converting its currencies to state run cryptocoin. It might sound like a sci-fi scene, but since Venezuela’s fiat devalued by 95%, it is now pegging its currency to Crypto ‘Petro’, which is backed by oil.
- Brand tokens: They are tradeable digital assets for use mostly on one company or an entity’s platform. Sometimes, they become generalized utility tokens over time. Sample brand tokens include Basic Attention Token, Civic, Steem, Iconomi, Ark, TenX, Kyber Network, Komodo, Ardor, SALT, LRBY Credits, Metal, Binance Coin, Power Ledger, Loom Network, etc.
- Stablecoins: They provide a stable store of value. The only successful Stablecoin as of now is US Tether, which is a 1:1 from dollar to the Tether coin. Maker, Basecoin, and Digitx are also examples of Stablecoins.
With the mass adaptation of blockchain, people are starting to use it daily in very creative ways. The crypto assets listed above are just the beginning of the crypto asset revolution. Traders should expect more ways of adopting the blockchain into daily lives.
lllustration by Marina Demchenko (Mamihlapinatana Studio)