Digital Assets, Cryptocurrency, and Blockchain
People often equate blockchain with bitcoin. But the applications of blockchain are far more reaching than a payment system such as bitcoin. In this regard, bitcoin is only one example of a digital asset.
A digital asset is a blanket term that isn’t limited to bitcoin. It is a tokenized asset that is issued in a public ledger and does not necessarily derive its value from a blockchain’s economic use case. Further, applications of digital assets are not limited to a payment system. A digital asset utilizes cryptography, peer-to-peer networking and a public ledger to regulate, verify and secure the transactions without the intervention of a middleman. There are four major types of digital assets: Payments, including cryptocurrencies (e.g., Bitcoin, Monero), Platform (e.g., Ethereum, EOS), Service or Utility (e.g., Filecoin, Augur), Security tokens (e.g., Tzero, Polymath).
Many financial institutions (e.g., JP Morgan, Credit Swiss, WisdomTree, Fidelity) and central banks (e.g., European Central Bank, Federal Reserve Bank, Riksbank Sweden, People’s Bank of China) are already building solutions with blockchain and digital assets and have had successful pilots. Blockchain technology and digital assets are most definitely here to stay, and they will affect any industry and business as we know it today.