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The Difference Between Cryptocurrencies and Digital Assets

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There several misconceptions about the terms “digital assets” and “cryptocurrencies”. You see the two words used interchangeably but that is technically not correct. In every way, a cryptocurrency can be regarded as a digital asset but substituting the latter for the former is more often than not wrong. There are some attributes that are quite differentiating about the meaning of a digital asset and what should be referred to as a cryptocurrency.

Cryptocurrencies like bitcoin and litecoin were originally created and designed to be used as currencies that are capable of replacing cash in the future, while digital assets, on the other hand, go beyond the purpose of being used as a currency.

Digital Assets

Digital assets simply put are data that exist in form of binary files, these assets can be seen as those tangible things we often claim ownership and control over the value. Digital assets are stored on digital devices like computers and smartphones.

The emergence of blockchain technology has really been a booster for digital assets creation due to the simplicity it offers to developers to digitize assets or create new pure digital assets. Many of the digital assets that exist today are based on the blockchain-based tokens that have been built on the Bitcoin blockchain or the Ethereum blockchain.

Digital assets utilizing the bitcoin blockchain platforms are built on top of counterparty or Omni. These are decentralized platforms that leverage on the success of Bitcoin blockchain for their respective platform. These platforms allow users to create their own assets tokens on the blockchain with also the right of setting the parameters of how functions.

The Ethereum network, on the other hand, is a blockchain system that securely supports the development of decentralized applications and smart contracts without a third party interference.

Of these two blockchain systems, Ethereum has so far emerged as the preferred choice for digital assets token creation. Most of this digital assets tokens are not created to be used as currency.

One could see the reason why Coinmarketcap differentiates them into currencies and digital assets. Based on the CoinMarketCap listing of digital assets some of the major ones include:

Golem (GNT), which is an Ethereum-based decentralized supercomputer that offers the sharing of computing power.

Iconomi (ICN), which a platform for that allows investors, even newbies to invest in a portfolio of digital assets.Augur (REP) it’s a decentralized financial forecasting tool that rewards users who accurately predict on any topic even real world events.

Augur (REP), which it’s a decentralized financial forecasting tool that rewards users who accurately predict on any topic even real world events.

Maid Safe (MAID), which is an OMNI-based network that helps provides security and privacy to your data online through a process they termed “Self-Authentication”.

Cryptocurrency

Digital assets in the traditional sense should not be regarded as cryptocurrencies. Real digital currencies like bitcoin, litecoin, DASH, ZCash, and PIVX have their own features and original blockchains, unlike digital assets which are built on top another layer of a blockchain. Another major difference between this two is that cryptocurrencies are usually mineable while digital assets are usually issued during an initial coin offering and are often not minable.

Tags : cryptocurrenciesdigital assets
Samuel Attah

The author Samuel Attah

Samuel Attah is a crypto-enthusiast, a freelance writer, and a full-time crypto trader who loves to writes about Bitcoin and Blockchain Technology in Nigeria and Africa in general. Samuel is also a big fan of football and he spends his free time watching this beautiful game.