7 Crypto Asset Classes


Hi, today from London, UK. Today we will talk about the 7 crypto asset classes.
It is a taxonomy set up by Don Tapscott and I want to share it with you and explain to you how you can divide crypto assets in these different classes
In these different categories, in these different types.
[Music]
Ok. I moved to my hotel. It was so crowdy, so loud outside. Let’s start quickly. As I said, this is a categorization, this is a taxonomy set up by Don Tapscott.
There are some fluent boundaries between these different crypto assets.
Some of the crypto assets of the crypto projects you could put into several different categories.
So, maybe this is not the perfect categorization but this is the first attempt to somehow categorize the crypto assets and let’s talk about that.
Let’s start with the first assets that exist. It is simply the cryptocurrencies. What does cryptocurrencies mean?
The best exapmle is Bitcoin. Bitcoin was the first cryptocurrency. It was the first crypto project.
So, the assets that are used or are generally currencies / payment assets you call cryptocurrencies.
Examples are of course Bitcoin, Litecoin or maybe some private cryprocurrencies like Monero. These are good examples of cryptocurrencies.
The second asset class would be platforms. You could take the crypto assets that are used on that platforms within these platforms as the payment method
Or as the fuel for that platform.
So, these crypto assets are the base currency of the platforms that feature also other crypto assets.
The best example, the first example of that type of crypto assets is Ethereum, of course.
With Ethereum this is the fuel of the Ethereum network, of the Ethereum platform.
And you have many other assets on Ethereum that may belong to other categories.
But generally Ethereum itself is a platform crypto asset. The same you could say about Neo or even better Neo Gas that is the fuel of the Neo network.
Then you have of course other platforms with their base currencies.
For exapmle the Byteball network with Byteball bytes.
So, this was the second crypto asset category.
The third asset class would be Utility tokens.
Utility tokens are crypto assets that are used to pay for some services on some non-crypto platform.
Non-crypto platforms meaning they are not platforms featuring other crypto assets.
For exapmle Binance is a typical utility token. BNB.
You need to buy Binance token or you can use Binance token to pay for transactions on an exchange.
Or 0x would be another utility token that you use for transactions, for certain services on decentralized exchanges.
These are the typical examples of utility tokens. Of course, there is always this notion which has the legal background.
What is utility, what is security token but in that discussion between utility and security token they have a different definition of that.
So, let’s take the Don Tapscott definition with these examples for our taxonomy.
The 4th class and here we come to the security tokens. These are typically shares of companies, maybe of founds, equity share and then also the profit share.
For example Hshare as the name already suggests.
Or BCAP, so Blockchain Capital, the share in the Blockchain Capital found.
Or also Iconomi where they share with you the profits of that project, of that found.
I was talking about security tokens in my video from Consensus 2018. I will provide the link to that video.
Maybe below so you can watch it and see more about security tokens.
The next class would be the natural asset tokens. These are generally tokens that represent natural resources that are based or backed by natural resources
Typical example of that is Digix which represents gold. And there will be for sure more and more resources tokenized.
It is conceivable to tokenize silver, it is conceivable to tokenize rare metals, rare earths, and so on…
So, this is another asset class.
The next exciting asset class is the crypto collectibles. I was talking in the interview with Peter Shirley about non-fungible tokens.
And typical application of non-fungible tokens are crypto collectibles.
What are crypto collectibles? Crypto Kitties are the crypto collectibles.
So, unique objects, unique digital objects that are tokenized and that are tradable.
Crypto Kitties were the first exapmle and you will find out about it in my interview with Peter Shirley. I’ll provide a link below this video.
But after Crypto Kitties many other crypto assets came up, for example Cryptofighters, Cryptopunks or Cryptobots.
And there is even a platform or market where you can trade crypto assets. It’s called Rarebits.
Crypto collectibles are usually based on the ERC 721 convention that describes the working, the inner working of non-fungible tokens.
But recently there is also an updated definition. It’s called ERC 821.
The last asset class Don Tapscott talks about are stable coins. He calls them also crypto fiat, but it’s not the same.
I will tell you about my understanding of crypto fiat and stable coins.
Crypto fiats are cryptocurrencies or crypto assets that are backed by fiat currencies like by dollar, by euro, by yen.
Typical example of that would be Tether that is backed by dollar. So, it is backed one-to-one with dollar and you can call it crypto fiat.
Because it’s not only backed by fiat currency but it also diminishes its value with the fiat currency that it is backed by.
So, if dollar loses 2-5% of its value every year, so does Tether.
But it’s very comfortable to send Tether between the exchanges. It’s much easier to send Tether between the exchanges than to send fiat currency.
But there are also stable coins that are not backed by fiat. For exapmle Maker.
Maker Dao is a very interesting project of cryptocurrency or crypto asset that is not backed by any fiat currency.
By a social and mathematical mechanism it tries to establish a stable coin that is independent of the moves, of up and downs, of Bitcoin
Of other cryptocurrencies and it keeps in some way a stable value that will enable later to build pairs between Maker and other cryptocurrencies
And to trade between these cryptocurrencies and have a really stable charts or reliable charts of any other cryptocurrency.
So, as I said this taxonomy may not be perfect, may not be full.
If you have other ideas of other taxonomies, maybe other categories that are not included in that taxonomy.
Or maybe some examples of coins, of crypto assets that are maybe on the edges of that or maybe belong to several categories.
Or maybe that are missing in that taxonomy, please provide it in the comments and provide, of course, you ideas.
Let’s discuss about that taxonomy and let’s discuss about other possibilities to divide the crypto assets in different classes, groups and categories.
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I talk here a lot about cryptocurrencies, about my experiences with investing in cryptocurrencies.
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So, I invite you to comment on the topic we have talked about. What are your thoughts about that?
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I wish you a fantastic day, let’s do something extraordinary today!

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