WHAT ARE CRYPTO ASSETS?
Learn about the three main types of crypto assets - Cryptocurrencies, Platform Coins and Utility Tokens.
Bitcoin was the first cryptocurrency but there are many others. You’ve probably heard of Ethereum, Ripple and Litecoin. But there’s a problem. Many of these aren’t currencies in the traditional sense, so they are more accurately understood as crypto assets. If you’re thinking of buying crypto, it’s good to have an understanding of the three main types of crypto assets; Cryptocurrencies, Platform Coins and Utility Tokens.
What are crypto assets?
Bitcoin was the first cryptocurrency but there many others. You might have heard of names such as Ethereum, Ripple or Litecoin.
But wait! There’s a problem!
Many of these aren’t currencies in the traditional sense, so they are more accurately understood as crypto assets. It sounds complicated but if you think of buying crypto, it’s good to have a basic understanding of the three main types of crypto assets:
Cryptocurrencies: Cryptocurrencies work like money, or as a medium of exchange. An example is Bitcoin. Bitcoin is a currency because you can use it to buy things.
Platform Coins: Platform Coins can be used to access services on a platform. An example would be Ethereum. ETH is used to pay for transactions on the Ethereum platform.
Utility tokens: Utility tokens are used as a unit of account or utility in a decentralised application: An example would be Basic Attention Token which is used as a unit of account on a blockchain-based digital advertising and content platform.
Another important point to understand is the difference between coins and tokens.
Coins exist on their own independent blockchain. So Bitcoin exists on the Bitcoin blockchain. Tokens exist on another blockchain platform. These platforms can support many different tokens. For example, the Ethereum platform supports hundreds of tokens including Golem, Basic Attention Token and Dacxi’s DAC.
There are a mind-boggling 1000 different crypto assets. But don’t worry - you don’t need to know all of them!
Each has a slightly different use case and many of them are speculative or experimental because the technology is still new. The applications and infrastructure needed to use them to their full potential is still being built but in the years ahead they might become an important part of everything from business, banking and finance, to voting and identity, to social media and gaming, to AI, to prediction markets, VR, the Internet of Things plus heaps of other ideas that haven’t been thought of yet!
Here on the Dacxi Exchange, you can buy and sell some of the best known crypto assets like Bitcoin, Ethereum and Litecoin.
We’ll start to learn more about these in the next video…