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What are Crypto Assets?

What are Crypto Assets?

If you have a keen interest in cryptocurrencies, you would have certainly come across the term crypto assets.

Cryptocurrencies like Bitcoin, Ripple, Ethereum and Litecoin are popular digital currencies available nowadays.

What is the meaning of crypto?

Crypto means hidden or secret. Crypto assets or cryptocurrencies are backed by blockchain technology, and all records regarding the transactions with these digital currencies are kept secret between the users.

The cryptocurrency was launched as decentralized electronic cash. We normally carry fiat currency, and we need to deal with thieves and robbers when we carry a large amount of cash. In this case, cryptocurrency can make our transactions hassle-free, and we do not need to carry fiat currency anymore. We can store our crypto in our digital wallets, and we can keep our wallets secure with a security key or password. The wallets find multitude for making both online and offline purchases. Apart from that, fiat currencies are controlled by banks, and the government monitors these currencies. Most of the political parties are funded by large businesses, and such parties or their leaders can misuse their power to manipulate the value of fiat currencies. In the case of Blockchain technology, we do not need to deal with such insecurity because such assets or currencies are not controlled by any bank or government.

Such assets are very appealing to the investors, since they can control the asset movement. But in reality, if there is no regulatory body like a bank or government present as a regulatory body, then you can lose your funds. You cannot claim a refund if you lose your crypto assets. However, choosing a reliable cryptocurrency platform like Bit coin Era that gives you complete leverage to trade and also does the due diligence by completing the KYC ensures that your money is safe. You can buy crypto assets online and store them in your wallet securely.

How are crypto assets generated?

There are different ways of generating different types of cryptocurrencies. For example, bitcoins are created through mining. Some miners working on the bitcoin network can check the transactions done with bitcoin and mine this digital currency through a complex computing or mathematical program. But, for mining, they need to validate a transaction made with Bitcoin, and it requires lots of energy and complex knowledge.

There are multiple logs available for multiple transactions, and all these blocks are stored in a blockchain technology, which is known as a public ledger. For example, once a miner finds out a valid transaction on the bitcoin network, he or she will record the transaction on a public ledger or log. The miner can add this transaction in the log of the user who made this transaction. Miners need to link each log with another because linked blocks or public ledger is hard to break, and hackers cannot mislead these blocks or logs.

So, based on blockchain technology, bitcoin is a secured crypto asset, and you can invest in this digital currency to get a good return.

Is it possible to buy something with crypto assets?

Cryptocurrency or crypto-assets can be used for online and in-store purchases. But there are limited numbers of stores available that accept cryptocurrency. According to the investors, you should consider crypto assets as a long-term investment, and you should not use your cryptocurrency for buying goods and services. You cannot use your cryptocurrency in a food shop to buy food products.

So, cryptocurrencies are not accepted by major retailers and online stores, and you need to use your fiat currency for the same. This is the reason that people consider cryptocurrency as an asset, not a currency.

Crypto assets are good for your investment portfolio:

Crypto is a volatile asset because it is unpredictable and unstable. You can compare crypto with other assets like stocks, gold, and oil, and then you can find it more unstable. For example, we can find approx 10% hike in oil price from 2014 to 2018, but the value of Bitcoin has risen to 65%, which is 25% high than its previous value.

But, if you start with a small amount, you can avoid such risk of losses, and you can easily gain a huge profit over time. Moreover, you should add different crypto assets to your investment portfolio to stay safe.

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