Topic: CryptoAssets Taxonomy (Read 148 times)
These are very useful information for the newbies who are willing to invest or know more about cryptos. It will definitely help the community to understand the basic tax regulations of cryptocurrencies. I, myself got to know about crypto-fiat currencies by reading your post. Keep it up.
This is indeed very helpful for the community, most of the people who want to join the market have fear of losing their money because they don’t have the basic knowledge of such terms and events. Even, the experienced users find it hard to understand these terminologies. I hope they will be glad to read this.
As a beginner, we need to learn the basics starting from the taxonomy of crypto assets. Cryptocurrency is a digital coin that runs on blockchain technology. They are traded on various platforms which are blockchain based operating system. Often tokens are confused with cryptocurrencies. There are three types of tokens- the utility token, the security token and the natural assets token.
Very informative datas you collected in this discussion. From here I first came to know about Taxonomy of CryptoCurrencies. That reminds many to learn and many to earn. Crypto-Fiat currencies, by learning I may assumme, will be a hazy and with many complication in policies and theories as they aplly for both decentralized and centralized financial system.
Since you have described about the crypto world in short thats why anyone who want to know about crypto will get the information easily. I think your information about crypto platform, various types of token, crypto- collectibles, relation with crypto and fiat currency, stable coins will also help the crypto people.
Informative article about crypto market. Hopefully it will be very helpful for who actually don't know about crypto market and have interest on crypto market.
Frist of all thank you From my point of view Over the past months of looking into distinct cryptocurrencies, I found it tricky to remember what each one of them does. Furthermore there can be several coins/tokens that aim to tackle the same problems or the same industry and these all add to the confusion
The classification of the crypto property or assets has been excellent. Anyone who reads this article can easily understand and help in the investment work. I think everyone should read the script helping to increase crypto efficiency.
About few months I am trying to have clear concept about different cryptocurrency and faced some difficulties. Some of these difficulties solved now by your post. What can I do for furthermore research?
I think utility token is an important feature in the world of cryptocurrency. If you owned a utility token you can purchase credit and use it to get services.
There are many people who doesn't know these basic things. Yet they wanna enter crypto world which is really risky for them. It can lead them to failures.
I appreciate that you have posted some valuable information. People must learn these information for research purpose and to go for advanced studies about crypto world.
Very good effort. These taxonomy should be known by every person who are interested in crypto world. Without proper knowledge it is tough to survive here.
"The cryptocurrency taxonomy can be used for pedagogical purposes, for explaining and comparing coins, for managing portfolios, for analytics, or in any other ways that you deem useful."
https://medium.com/swlh/a-better-taxonomy-for-cryptocurrencies-cbffd2e1b58c
https://strategiccoin.com/taxonomy-of-blockchains-consensus-2018/
https://www.cryptoglobe.com/latest/2018/05/alex-tapscotts-taxonomy-of-cryptoassets-from-consensus-2018/
https://cointelegraph.com/bitcoin-for-beginners/what-are-cryptocurrencies
CRYPTOCURRENCIES
- A cryptocurrency is a digital or virtual currency designed to work as a medium of exchange. It uses cryptography to secure and verify transactions as well as to control the creation of new units of a particular cryptocurrency.
- Cryptocurrencies are designed to make trustless, peer-to-peer payments and there?s obviously many others besides Bitcoin these days.[/font]
- This is the one that everyone knows well, and the best example is Bitcoin (BTC). It was a designed as "cash for the internet"; you could use it to move value peer-to-peer in a trust-less manner. Other examples of cryptocurrencies include Bitcoin Cash (BCH), Litecoin (LTC), Monero (XMR), Dash (DASH), and Zcash (ZEC). Some of these, like the last three, are focused on privacy.
- The original purpose of cryptocurrencies, more specifically Bitcoin (BTC), was to come up with a universal currency that was not controlled by any institution (decentralised from government, banks, companies etc). In its current state of development, it is not functioning better as a day-to-day currency due to technical limitations in transaction speeds and volume.
- Furthermore, transaction fees, which are typically charged as a fraction of the token, have become so expensive as the value of cryptocurrencies surge. Hence, many altcoins have surfaced, with the aim of bettering Bitcoin as a mode of payment ? think cheaper fees, faster transaction speeds, greater transaction volumes, better security, increased anonymity.
PLATFORM
- These are essentially blockchain-based operating systems, and the best-known example is Ethereum (ETH). Alex points out that it is kind of ridiculous when people in the media say things like "Ethereum is the new Bitcoin" since they do very different things: Bitcoin was designed as a secure medium of exchange for the internet , whilst Ethereum is a general-purpose platform that lets you build decentralized applications (DApps) and smart contracts. There are currently over 1500 DApps that run on Ethereum.
- The best example here is Ethereum, what Tapscott calls ?the investment bank of the cryptocurrency world? given its prevalence as people build on top of it. In fact, he points out that in 2016 about $165 million was raised by ICOs, in 2017 that was $6.5 BILLION, and in the first quarter of 2018 alone, it?s 7 or 8 billion dollars.
- A number of third-generation blockchain protocols have emerged, and it is likely to diminish somewhat over time.. But a lot of fundraising is built on ERC-20, even if the end results are built on other platforms.
UTILITY TOKENS
- These are "native blockchain assets that operate within an application system." The reason for calling these blockchains "utility tokens" is that their tokens have "utility" by virtue of usually being the only accepted form of payment for the service provided by the blockchain.
- Utility tokens are intrinsically useful, however. In the case of Filecoin, it?s secure digital file storage. Augur is another example. Built on Ethereum, Augur allows you to create a prediction market. It?s open-source and uses real world data with token holders making corrections and potentially receiving a benefit for doing so.
- In any event it?s likely that token holders are the governors of these systems, and although they aren?t securities, they?ve attracted the attention of regulators due to the sheer number of dollars involved.
- Utility tokens are tokens that users will consume in exchange for a service. Each service provider runs his own tokenised system, where users will purchase the credits and use it in exchange for his services. This is similar to how you would purchase tokens to play (service) in an arcade (service provider).
SECURITY TOKENS
- In the world of finance, a "security" is a tradable financial asset. In the United States, a security is a tradable financial asset of any kind. There are three types of securities: debt securities (banknotes, bonds); equity securities (common stocks); and derivatives (forwards, futures, options, and swaps).
- There are six types of security tokens: debenture tokens; smart swap contracts; option tokens; equity tokens; bond tokens; and smart futures contracts.
- Security tokens are much like stocks or bonds, a contract that stipulates their value and your benefit. Business logic in contract form can be tokenized. The equity market is a good target, says Tapscott, given the trillions invested. Compared to other asset classes ? like the equity market ? these tokens still a very small slice of the pie.
- This category will potentially will become the most important/valuable in the crypto space since the equities and derivatives markets are worth hundreds of trillion dollars, and even if only a small portion of those markets was put on the blockchain, we are easily talking about trillions of dollars in value.
NATURAL ASSET TOKENS
- These are tokens that are backed by physical assets in the real world. These assets can come from either "established markets" (examples include gold, oil, natural gas, fuel oil, and base metals) or "frontier markets" (examples are carbon, water, and air).
- There are also experiments like air, carbon, or water. One natural asset token is the EARTH token, which was launched by a carbon mitigation company and aims to decentralize the marketplace for the trade of natural assets. These can play a part in the supply chain or in business logic, but what Tapscott finds interesting are new markets opening up because of the tech in blockchain itself.
CRYPTO-COLLECTIBLES
- These are unique (i.e. not fungible) digital assets. As with natural asset tokens, they track provenance, but are not usually linked to something with real value. Perhaps, the best example of today's crypto-collectibles is CryptoKitties. As for tomorrow's crypto-collectibles, one good example is assets in virtual worlds.
- These are typified by having uniqueness, and non-fungible items could prove to be a big deal in the future, says Tapscott. What?s central to this tech is the uniqueness, the ability to watermark something to prove its uniqueness.
- With a collectible, the key is that ability to authenticate. This also avoids the double spending problem. Tapscott envisions even more opportunities as celebrities or other ?unique item? markets develop.
CRYPTO-FIAT CURRENCIES AND STABLE COINS
- There are two types of price-stable crypto assets. Crypto-fiat currencies are government-issued currencies on the blockchain. The other way to achieve price stability is via stablecoins, which try to keep the price within a certain band either by pegging to an asset in the real world like gold or dollars -- examples are Tether (USDT) and Circle's USD coin (USDC), or through a dynamic supply system
- Stablecoins often have an implied pre-money valuation.Crypto-fiat is more interesting to Tapscott. Venezuela is perhaps one notorious example, with the Petro. There?s no real way to know if it?s truly backed by the oil the country says, as the government has become an international pariah.
- It may also be why there?s some recalcitrance by other governments to give more credence to crypto-fiat tokens. But Tapscott argues it should be a rallying cry for other governments to listen and start taking crypto seriously.
https://medium.com/swlh/a-better-taxonomy-for-cryptocurrencies-cbffd2e1b58c
https://strategiccoin.com/taxonomy-of-blockchains-consensus-2018/
https://www.cryptoglobe.com/latest/2018/05/alex-tapscotts-taxonomy-of-cryptoassets-from-consensus-2018/
https://cointelegraph.com/bitcoin-for-beginners/what-are-cryptocurrencies
Jump to: