What is a crypto asset?

This article answers the question What is a Crypto Asset? If you're thinking about investing in Crypto, make sure to read this first!

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How do we start defining crypto assets?

A digital asset that uses cryptography to control the creation of new units and to secure transactions is known as a crypto asset. Bitcoin and other cryptocurrencies are the most well-known examples of crypto assets.

Blockchain is a distributed ledger system that makes it possible to keep records that are safe, open, and can't be changed.

A government or a financial institution does not generally control crypto assets because they are decentralized. They are highly resistant to censorship and fraud because of this decentralization.

One thing to remember about crypto assets are their development teams and company behind them; however if your transactions are on the blockchain and are public, they are generally out of the hands of singular controlling actors.

Crypto assets are uniquely suited as a store of value, medium of exchange, and investment asset due to their combination of decentralization, blockchain technology, and cryptography. Crypto assets have the power to empower individuals to take charge of their finances and disrupt conventional financial systems.

Exchanges are frequently where crypto assets are traded, and often hold a point of centralization. Centralized exchanges are built on legacy systems, and account in dollars.

Centralized exchanges like Coinbase allow users to buy and trade crypto assets by transferring funds from their banks. Sign up to Coinbase with my link for a free $10 when you deposit funds and start trading!

Decentralized exchanges, as opposed to centralized exchanges, are built on blockchain technology.

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What are some common crypto asset examples?

Here are some common examples of crypto assets:

Bitcoin

Bitcoin is a decentralized digital currency that can be sent from user to user on the peer-to-peer bitcoin network without using middlemen. It does not have a single administrator or central bank. Through cryptography, network nodes verify transactions and record them in a public ledger known as a blockchain.

Ethereum

Ethereum is a platform that runs smart contracts and is decentralized: applications that operate precisely as programmed, without the possibility of fraud or interference from third parties.

MATIC Polygon

The MATIC token, also known as Polygon Network, is a L2 blockchain (Layer 2) built on Ethereum. Polygon is the leading L2 meant to scale the transactions and onboarding of developers to the Ethereum network.

Solana

Solana, currently the leading "ETH killer", has established itself as the primary blockchain to compete with Ethereum in North America. Solana brings speed and low cost transactions to the table early on in their public release, bringing massive onboarding to a L1 smart contracts blockchain.

Stacks

Stacks is a unique crypto asset, in that it primarily focuses on the scaling of the Bitcoin blockchain, along with it's own ecosystem. Stacks is built to scale smart contracts and programming that translates smoothly onto the Bitcoin L1. This concept is crucial to scale development that directly translates onto Bitcoin, the oldest and most secure blockchain.

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Syscoin

Syscoin is a mighty underdog that is bridging the gap between Ethereum's EVM and a much more powerful scaling solution, while securing their blockchain with Bitcoin. Syscoin is unique, in that it is merge mined with Bitcoin, making it very environmentally friendly. Syscoin is leading the power of merged mining Bitcoin and has developed their NEVM and ZKrollup strategy that will focus on onboarding EVM compatible development onto a Bitcoin secured layer.

Litecoin

Litecoin is distributed under the MIT/X11 license open-source software and is a peer-to-peer cryptocurrency. An open-source cryptographic protocol is a foundation for coin creation and transfer, with no central authority in charge.

Monero

Monero is a private, anonymous, and secure cryptocurrency. It is freely available and open source. You become your bank with Monero. Because no one can see your balances or track your activity, you can spend safely.

Dash

Dash is a digital currency that aims to provide a private, quick, and easy-to-use online payment method. It shares some crucial differences with Bitcoin. Dash is faster and less expensive to use than Bitcoin, providing more privacy and anonymity than Bitcoin.

How do crypto assets make you money?

Yes, you can make money with crypto assets. But the question remains, HOW? Making money via crypto relies on three mechanisms.

Firstly, you can invest or trade crypto assets in crypto markets. Similar to investing in in precious metals like Gold and Silver.

Secondly, you can lend or stake your coins to other system users. Lending and staking crypto assets can provide you yield over time, but come with some risks in the form of handing over your crypto during the lockup periods. Some staking allows for delegated staking, which simply means that the only stipulation is your tokens/coins must remain in your wallet during the staking period.

Last but not least, you can "work" for/to secure a blockchain system, in the form of mining. This allows for you to translate your available electricity into mined crypto assets, further letting you stake, sell or lend your crypto for capital.

Growing your crypto asset portfolio is risky and requires many strategies. But it’s worth it once you get a hold of how the crypto market works.

Here are six common strategies for making money via crypto assets:

1. Staking and lending

2. Trading

3. Crypto social media

4. Mining

5. Airdrops and forks

6. Investing

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Conclusion

Knowing and comprehending the strategies described above will give you a solid understanding of cryptocurrency's concepts. But before you start, you might want to take take a look at filing your crypto taxes, fundamentals of chart reading and ICO/IDOs in crypto.