Almost every active Internet user is familiar with a variety of the crypto-sphere terms: Bitcoin, cryptocurrencies, blockchain, decentralization, mining, token. But not everyone understands their meaning. And some terms are used synonymously, causing confusion, misleading new users and regulators.
Cryptocurrencies have been criticized for a number of reasons, including their use for illegal activities, exchange rate volatility, and the vulnerability of the underlying infrastructure. However, they are highly regarded for their mobility, divisibility, inflation resistance and transparency.
Let's define what is the difference between cryptocurrency and crypto-asset.
It is a digital or virtual currency that is protected by cryptography, so it is practically impossible to fake or double it. Cryptocurrencies distinctive feature is that they are not issued by a central authority, that's why they are theoretically impervious to government intervention or manipulation.
It is the most well-known type of crypto-asset. The world's first cryptocurrency called Bitcoin appeared in 2009, and today there are thousands of cryptocurrencies.
It is a digital asset that uses cryptography, i.e. special encryption, peer-to-peer networks and a public ledger to regulate and create new units, verify and secure transactions without the intervention of any intermediaries.
In short, crypto-asset is a generic term and is used in most applications of blockchain technology. Blockchain is a system, similar to electronic ledgers, where recorded all the movements (transactions) of a cryptocurrency. Anyone can track the transaction, but remain anonymous.
There are no two identical definitions of crypto-assets. Two different digital currencies can fall into the same category, but are often used in very different ways.
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