What is Crypto Asset?

Each type offers a different utility and can be used for a range of services on the blockchain network.<\/p>\n<h3>Cryptocurrencies<\/h3>\n<p>Cryptocurrencies are the most popular form of crypto assets. They act as coins that can be used in transactions between network participants. Cryptocurrencies are based on <a href=https://www.bitdegree.org/"//crypto//learn//crypto-terms//what-is-blockchain/">blockchain technology<\/strong><\/strong><\/a>. Blockchains are decentralized ledgers that maintain data of all transactions completed with the particular cryptocurrency tied to the blockchain.<\/p>\n<p>The process of generating new cryptocurrencies can be completed via various consensus mechanisms, which vary between different blockchain systems. The most popular consensus mechanisms are <a href=https://www.bitdegree.org/"//crypto//learn//crypto-terms//what-is-proof-of-work-pow/">Proof-of-Work (PoW)<\/strong><\/a> and <a href=https://www.bitdegree.org/"//crypto//learn//crypto-terms//what-is-proof-of-stake-pos/">Proof-of-Stake (PoS)<\/strong><\/a>.<\/p>\n<p><a href=https://www.bitdegree.org/"https:////www.bitdegree.org//crypto//buy-bitcoin-btc/">Bitcoin (BTC)<\/strong><\/strong><\/a> is the first and biggest blockchain-based cryptocurrency in the world. It launched in 2009 and led to the creation of the cryptocurrency market. Bitcoin is generated via the Proof-of-Work consensus mechanism.<\/p>\n<p><a href=https://www.bitdegree.org/"https:////www.bitdegree.org//crypto//buy-ethereum-eth/">Ethereum is the second-biggest cryptocurrency by <a href=https://www.bitdegree.org/"//crypto//learn//crypto-terms//what-is-market-capitalization-market-cap-mcap/">market capitalization<\/strong><\/a>. It is heavily used in <a href=https://www.bitdegree.org/"//crypto//learn//crypto-terms//what-is-defi/">decentralized finance (DeFi)<\/strong><\/strong><\/a>, the development of decentralized apps (DApps), and the creation of <a href=https://www.bitdegree.org/"//crypto//learn//crypto-terms//what-is-token/">crypto tokens<\/strong><\/a>.<\/p>\n<h3>Utility Tokens<\/h3>\n<p>Utility tokens differ from cryptocurrency coins because, unlike coins, they do not run on their own blockchain and use a <strong>parent blockchain <\/strong>instead. The Ethereum blockchain is widely used to develop tokens, particularly <a href=https://www.bitdegree.org/"//crypto//learn//crypto-terms//what-is-erc-20/">ERC-20 or <a href=https://www.bitdegree.org/"//crypto//learn//crypto-terms//what-is-erc-721/">ERC-721 assets. Some of these can function as utility tokens.<\/p>\n<p>As the name suggests, <strong>utility tokens have functionalities that can be used for specific products or services<\/strong>, usually based on the same parent blockchain. For example, Zilliqa (ZIL) is a blockchain-based platform for DApps development. Its ZIL tokens can be used for gaming or digital advertising.<\/p>\n<p>Utility tokens can also be used for <strong>exchanges and transactions<\/strong>. However, they are developed to primarily provide functionality.<\/p>\n<h3>Security Tokens<\/h3>\n<p>Security tokens derive their value from other physical and digital assets. Security tokens can be used in exchanges and are usually <strong>regulated<\/strong> by institutions such as the <a href=https://www.bitdegree.org/"//crypto//learn//crypto-terms//what-is-securities-and-exchange-commission-sec/">U.S. Securities and Exchange Commission (SEC)<\/strong><\/a>.<\/p>\n<h3>Stablecoins<\/h3>\n<p>Stablecoins are a form of cryptocurrency. However, unlike regular crypto coins which tend to be volatile and fluctuate in value, stablecoins have their value <a href=https://www.bitdegree.org/"//crypto//learn//crypto-terms//what-is-pegged-currency/">pegged to a traditional asset, like gold or <a href=https://www.bitdegree.org/"//crypto//learn//crypto-terms//what-is-fiat/">fiat currency<\/strong><\/a>. Tether (USDT), for example, is a stablecoin that has the value of one coin pegged to one US dollar.<\/p>","definition":"a digital asset that functions as a cryptocurrency or a decentralized application and relies on cryptographic technology for operations.","status":"published","meta_title":"What is Crypto Asset? Definition & Meaning | Crypto Wiki","meta_description":"Crypto Asset meaning: Crypto Asset - a digital asset that functions as a cryptocurrency or a decentralized application and relies on cryptographic technology for operations.","meta_keywords":null,"author":{"id":1,"user_id":1,"created_at":"2023-05-03T14:30:55.000000Z","updated_at":"2023-05-11T07:18:20.000000Z","title":"Editor-In-Chief","slug":"aaron-s-editor-in-chief","description":"<p>Having completed a Master&rsquo;s degree on Economics, Politics &amp; Culture for the East Asia region, Aaron has written scientific papers with a comparative analysis of the differences between US&rsquo; Western and Japan&rsquo;s Collective forms of capitalism, 1945-2020.<\/p>\n<p>With close to a decade of experience in the FinTech industry, Aaron understands all of the biggest issues and struggles that crypto enthusiasts face. He&rsquo;s a passionate analyst who is concerned with data-driven and fact-based content, as well as that which speaks to both Web3 natives and industry newcomers.<\/p>\n<p>Aaron is the go-to person for everything and anything related to digital currencies. With a huge passion for blockchain &amp; Web3 education, Aaron strives to transform the space as we know it, and make it more approachable to complete beginners.<\/p>\n<p>Aaron has been quoted by multiple established outlets, and is a published author himself. Even during his free time, he enjoys researching the market trends, and looking for the next supernova.<\/p>","user":{"id":1,"first_name":"Aaron","last_name":"S.","email":"aaron@bitdegree.org","email_sanitized":"aaron@bitdegree.org","email_verified_at":"2023-12-01T09:40:20.000000Z","must_verify_email":false,"is_registered_with_wallet":false,"status":"active","country":"LT","last_connected_ip":"88.119.132.125","image_id":2641,"referral_token":"05TMu2NysXOCn525","referred_by":null,"created_at":"2023-05-03T14:30:55.000000Z","updated_at":"2024-01-09T15:22:21.000000Z","full_name":"Aaron S."}}}" :chapter-list="[{"id":1,"title":"Blockchain","slug":"blockchain","updated":null,"chapter":"crypto\/assets\/crypto-book\/chapters\/learn-blockchain.jpg","chapter_simple":"crypto\/assets\/crypto-book\/chapters-simple\/blockchain-101.jpg","rating":100,"sections":[{"chapter_id":1,"order":1,"slug":"what-is-blockchain","title":"What is the Blockchain?","status":"published","modified_content":null},{"chapter_id":1,"order":2,"slug":"decentralized-blockchain","title":"Anonymous & Decentralized Blockchains: The Cornerstone of Crypto","status":"published","modified_content":null},{"chapter_id":1,"order":3,"slug":"blockchain-transaction","title":"What is a Blockchain Transaction in Crypto?","status":"published","modified_content":null},{"chapter_id":1,"order":4,"slug":"crypto-fees","title":"The Different Types of Crypto Fees Explained","status":"published","modified_content":null},{"chapter_id":1,"order":5,"slug":"what-is-bridging-in-crypto","title":"The Key Notion Behind the Concept of Bridging in Crypto","status":"published","modified_content":null},{"chapter_id":1,"order":6,"slug":"types-of-blockchains","title":"Different Types of Blockchains: What to Look Out For?","status":"published","modified_content":null}]},{"id":2,"title":"Cryptocurrencies","slug":"cryptocurrencies","updated":null,"chapter":"crypto\/assets\/crypto-book\/chapters\/learn-cryptocurrencies.jpg","chapter_simple":"crypto\/assets\/crypto-book\/chapters-simple\/cryptocurrencies-101.jpg","rating":100,"sections":[{"chapter_id":2,"order":1,"slug":"what-is-a-cryptocurrency","title":"What is a Cryptocurrency?","status":"published","modified_content":null},{"chapter_id":2,"order":2,"slug":"how-does-cryptocurrency-work","title":"How Does Cryptocurrency Work?","status":"published","modified_content":null},{"chapter_id":2,"order":3,"slug":"is-cryptocurrency-a-good-investment","title":"Is Cryptocurrency a Good Investment? 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