The cryptoassets you need to know about

We tell you about the most important digital assets of the moment

In this increasingly less analogue era, the economy has also adopted digital assets that the European Union intends to regulate. To this end, it has approved the Regulation of Markets in Cryptoassets (MiCA), the only one of its kind in the world, which will set a trend in other jurisdictions. It will be implemented at the beginning of 2025 to curb the threats faced by these digital assets.

If you want to know more about the meaning of cryptoassets, this article explains the most important ones. However, the panorama is so changing that a new one may be being created as you read this that will revolutionise the rules of the digital game…

Cryptoassets

These are virtual, intangible assets that have a market value and can be used for payments, international transfers, issuing digital assets or financing projects. They are not dependent on any central bank and can generate income by exchanging them for goods or services or by selling them.

Cryptoassets are private and secure because they are cryptographically protected. And because they are not yet regulated, the user is helpless, as he or she is often not informed of their risks and can lose money in a transaction. The most popular cryptoassets are cryptocurrencies and tokens.

Cryptocurrencies

These are virtual currencies, an alternative method of payment to the currencies issued by central banks. Their value is volatile, making them a riskier way to invest. The best known are Bitcoin, Ehereum, Litecoin and Ripple.

Bitcoin is undoubtedly the most popular cryptocurrency and was the first to emerge in 2009. It works using a distributed recording technology called blockchain, which records all transactions made with Bitcoin. Transactions are validated by a decentralised network of users who use their computers to process and verify transactions.

Tokens

Tokens are digital assets that represent a specific value or utility. They can be used to represent physical assets, such as gold or property, or to represent a digital asset, such as a software service or platform. Tokens are issued on an existing blockchain, such as Ethereum, and can be traded on a cryptocurrency exchange.

Token issuance on Ethereum is done through smart contracts, which are software programmes running on the blockchain that automate the issuance, distribution and management of tokens. Smart contracts allow the creation of custom tokens with specific functionalities and rules.

There are different modalities within tokens:

· Utility tokens: these tokens are used on a specific platform to access certain services or products, such as on the Binance platform, where users can use BNB tokens to obtain discounts on trading commissions.

· Security tokens: these tokens represent ownership of an asset, such as shares in a company. These tokens are subject to regulation and their issuance is subject to securities laws.

· Asset tokens: these tokens represent physical assets, such as gold or real estate. Asset tokens allow the divisibility and transferability of physical assets, making it easier to buy and sell parts of these assets.

· Non-fungible tokens (NFTs): these tokens are unique and non-exchangeable, as they represent unique digital items, such as digital artworks, game collections and online game items.