Types of Crypto Assets

Types of Crypto Assets

There’s more to cryptos than Bitcoin and Litecoin or other digital coins. Crypto comes in many forms that interested people can have as assets. Here are the different types:

Cryptocurrencies

Digital currencies utilize the blockchain for encrypting, verifying and regulating fund transfers. Perhaps the most popular is BTC or Bitcoin which can be easily acquired when you Click here, but there are thousands more alternative coins or altcoins in circulation. Cryptocurrencies are often used by people for payment or as a store of value. 

Stablecoins

As the name suggests, stablecoins pertain to digital currencies that are pegged to currencies that are well-established thereby reducing the amount of volatility. The stability can be attributed to its attachment to real-world assets, whereas the value can be as close to what it represents. Some are backed by fiat cryptocurrencies like the dollar while others by commodities such as gold. By tapping into this, stablecoins bring some consistency in the crypto ecosystem. 

Utility Tokens

This type of crypto asset is used for blockchain service operations. It’s meant to serve a particular purpose and fulfill a specific need such as handling transaction fees, or to give access to users to a type of service such as voting rights. You can think of it like a store coupon which you can exchange for something like a product, or use it to reserve future access to one that is still in development. 

Security Tokens

Similar to utility tokens, the security crypto asset is utilized for purposes but this time representing a stake in a project. For instance, it can be used in the crowdfunding process for a new cryptocurrency or project under the blockchain. The token comes with expectations for future profitability. Holder benefits may include profit shares, dividends or voting rights on a company’s future direction. A security token is regarded as an investment and represents the purchase or percentage of a company, thus must remain compliant with regulations. 

Privacy Coins

Bitcoin newcomers usually think transactions are automatically private, but this is not the case. Rather than anonymity, the cryptocurrency only actually supports pseudonymity. A public ledger would contain records of transaction codes which enables tracing back to the real world. Here is where privacy coins come in. This crypto asset is imbued with added layers of encryption to ensure the privacy of every transaction information. Owners remain anonymous, along with the amount of coins exchanged and that in their wallet, so theoretically no record exists. 

Crypto Collectibles

A lot of blockchain projects involve exchanging digital items with values based on how rare it is. The unique tokens can be a symbol of almost anything, from artwork to mementos in sports. Digital cats or cryptokitties are examples of this virtual asset which are raised, bred and collected under the Ethereum blockchain. 

These are only a few among thousands of crypto assets including the many cryptocurrencies that can be bought. People hold the digital tokens or coins as investments as they expect its value to rise in the future and allow them to earn huge profit. 

Cristina Macias
Cristina Macias is a 25-year-old writer who enjoys reading, writing, Rubix cube, and listening to the radio. She is inspiring and smart, but can also be a bit lazy.