People who are interested in cryptocurrencies should learn about different types of Blockchain assets. Cryptocurrencies are blockchain assets. Let’s have a look at blockchain.
Blockchain is a list of records called blocks where a list of growing records is kept via these blocks. These blocks are linked using cryptography, like a chain. As a result, the term was a created-block chain.
Let’s get back to cryptocurrencies, as mentioned-above cryptocurrencies are a type of blockchain assets. However, there are non-currency assets, as well.
Cryptocurrencies differ when it comes to popularity, safety, application, etc. Now, let’s have a look at different types of blockchain assets.
One of the most popular cryptocurrencies on the market is stablecoins. It is easy to differentiate stablecoins from other cryptocurrencies by merely looking at the name. It suggests that it is a stable coin. As the name suggests it has the most stable price among the assets or at least it plans to have in the future.
Moreover, stablecoins are attached to a certain other currency. This way, it keeps the price more or less stable. One interesting fact about the stablecoins is that traders are using them to prevent financial loss. For example, if a trader thinks that an asset will lose its value, it will sell that asset for a stablecoin.
Also, there is no unique solution when it comes to keeping the prices in a stable condition. Different stablecoins use different methods. To keep the price stable, a stablecoin is exchanged for an identical amount in the pegged currency. It is worth mentioning that these currencies are required by law to hold full reserves of the pegged currency.
The situation is different when it comes to Crypto-collateralized stablecoins as another cryptocurrency backs them. There are also stablecoins supported by commodities.
Other types of blockchain assets
Now, let’s discuss different types of blockchain assets as well. This type of blockchain is interesting for several reasons. Thanks to blockchain economies or blockchain platforms, it is possible to digital assets, also called tokens.
It may appear strange, but a person can create his or her digital assets. Most of the digital assets created by users are used in specific areas.
The next type of blockchain assets brings us to payment currencies.
Payment cryptocurrencies are popular around the world. It is possible to use payment cryptos to buy goods or to pay the bills etc.
Most of the people who are familiar with cryptocurrencies have at least some knowledge about the Bitcoin. It is the oldest and, at the same time, the most prominent cryptocurrency on the market. The value of payment cryptocurrencies is similar to fiat, as the price comes to form the supply and demand. In the future payment, cryptocurrencies may become a regular currency on the forex market.
There are five types of available on the market. The last two types are privacy coins and utility coins.
Privacy coins are a type of blockchain asset which focuses on privacy and anonymity. This type of cryptocurrencies generated controversy, as it is possible to use them to fund illegal activities.
The last one is utility tokens. These kinds of tokens are used in blockchain-related products. They run on blockchain platforms. Also, the user can exchange utility tokens for blockchain services.