Get Ahead Of The Curve: A Guide To Different Types Of Crypto Assets

When thinking of the word crypto, the first few things to come to our mind are bitcoins, cryptocurrency, digital currency and such.

What is Cryptography?

Cryptography is the study of computed and encrypted messages between two or more parties and the practice of coding and decoding these messages. It means the messages can only be understood by the parties involved, keeping them secure.

Crypto assets are not just limited to crypto coins but can be subdivided into a total of 8 categories which further house hundreds if not thousands of crypto coins, tokens and more. click here

This section of the article highlights important points related to crypto assets; read on to know more in detail! 

Crypto takes its roots from the Greek word Kryptos which means hidden. In simpler words, cryptography allows the involved parties to make transactions with the added benefit of complete security. This security is possible only because cryptography does not fall under the central monetary and financial authority.

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What are Crypto Assets? An Overview

In simple words, crypto assets are digital assets that can easily store transferred and traded. All the crypto asset transactions are recorded in public ledgers that store this information to prove ownership. Examples of crypto assets include Bitcoin, Litecoin, Ripple and more.

Types of Crypto Assets

Since almost everyone knows about Bitcoin, it can be said to be the most popular form of crypto asset. But despite being the oldest form of cryptography, it is not the only one. 

Following are the different types of crypto assets:

Cryptocurrency

As the name suggests, these types of crypto assets are used as currency, i.e., to make payments. All the transactions made with cryptocurrency are verified, stored, and maintained by a virtual ledge called a blockchain.

Examples of cryptocurrency include Bitcoin, Tether, Dogecoin, and so many more.

Privacy Coins

Next in the discussion are privacy coins. They are known for their added privacy in crypto assets. They insert extra layers of encryption to conceal the name of the owners, the details of the transaction, and the balance in an owner’s account.

Examples of privacy coins include Monero, Zcash, Decred, Secret, and many more.

Stablecoin

These types of crypto assets are known for their stable price in the market. Generally, their prices are attuned to that of a commodity or a currency. The currency or commodity chosen for stablecoins has low fluctuation rates making them apt for stablecoins.

Examples of stablecoins include Tether, which is backed by gold and the dollar, USD coin, backed by dollar reserves, DAI, True USD and more.

NFTs

NFTs stand for Non-Fungible Tokens. These tokens are unique and can not be exchanged for another. NFTs can be both tangible and intangible.

In their digital form, they can be an e-game avatar, a drawing, a unique card, a tweet, etc., and in their physical form, NFTs can be clothing items, a painting, a ticket, etc.

DeFi

DeFi stands for Decentralized Finance. This allows trading, betting, exchanging, lending, and borrowing of crypto assets. This is an effective way of making passive income by lending, yield farming, and more.

The examples here are Aave, Synthetix, Cardona etc. 

Blockchain Economies

Blockchain economies are platforms that take the normal blockchain ledger system to the next level. These platforms allow the generation of crypto tokens and have their system.

Examples of blockchain economies are Ethereum, Cardano and more. 

Utility Coins

These tokens are used for a selected aim in a blockchain economy. These coins give the owner special rights and services. For example, a utility coin could allow an e-gamer to get a special skin for their weapon.

Examples of utility coins are Altcoins, Celo, Cartesi, Binance coins etc. 

Security Tokens

These are crypto assets in the form of tokens that are similar to financial investments. These are tokens for intangible assets like bonds and equity and tangible assets like property, machinery and such. 

Examples of security tokens are Sia funds, Science Blockchain, INX and many more.

Conclusion

Crypto assets are digitalized assets that are independent of the central authority of the country. They are categorized into 8 types of different coins and tokens each having a purpose of its own.