Virtual Assets: An Overview
Virtual assets are digital representations of value that can be exchanged and used as payment for goods or services. They exist on computers, distributed networks, and in the form of tokens stored on a blockchain ledger. Virtual assets include cryptocurrencies like Bitcoin, Ethereum and Litecoin; digital tokens associated with Initial Coin Offerings (ICOs); gaming items; utility tokens; non-fungible tokens (NFTs); stablecoins backed by fiat currency or other forms of collateral; decentralized finance (DeFi) products such as synthetic assets, lending platforms and yield farming protocols; and more.
Cryptocurrencies
Cryptocurrency is a type of virtual asset that uses cryptography to secure transactions between users. Cryptocurrencies are based on blockchain technology – an immutable distributed ledger which records all transactions chronologically in a public database known as the “blockchain”. Cryptocurrencies have no central authority or government backing them. Instead they rely on consensus algorithms to validate their validity and prevent double spending. The most popular cryptocurrencies currently available are Bitcoin, Ethereum, Ripple, Tether USDT coinbase coin , Binance Coin etc .
ICOs
An Initial Coin Offering (ICO) is a fundraising event through which developers raise funds for new projects using cryptocurrency tokens issued by the project itself rather than traditional currencies like dollars or euros . ICOs typically issue ERC20 standard tokens built upon Ethereum’s network but there are also many other types including NEO-based NEP5 token standards , IOTA -based IOTAs , Waves platform-specific WAVES token standards among others . Investors who purchase these coins receive rewards in return depending upon how successful the project is after its launch .
Utility Tokens & Non Fungible Tokens
Utility Tokens represent access rights to use certain products or services within an application ecosystem while non fungible tokens (NFTs) represent unique digital collectibles that cannot be replaced with another identical item due to its uniqueness – often referred to as “digital art” because it includes illustrations created by artists displaying images onto this blockchain technology infrastructure . Both types generally do not provide any ownership rights over company shares nor do they entitle holders with voting power although some may offer dividends paid out from profits generated from trading activities related to those specific utility/non fungible token projects being developed by teams behind them .
Stablecoins & DeFi Products Stablecoins refer to cryptocurrency whose value remains relatively stable compared with other cryptos due to its peg against fiat currency such as US dollar , Euro etc while decentralized finance products involve applications running atop smart contracts which enable users engage into complex financial activities without middleman intervention thus lowering costs significantly when compared against centralized counterparties like banks where fees can sometimes become quite high depending upon individual needs being serviced at given moment in time .. Several examples include Synthetix Exchange Protocol providing derivative instruments such as futures options swaps etc ; MakerDAO allowing individuals create loan agreements based off crypto collateral ; Compound protocol permitting depositors earn interest rate returns ; Uniswap providing liquidity pools enabling investors trade crypto pairs automatically through automated market maker system just name few ..
