What is Cryptocurrency? Digital Assets Explained

Posted on February 19, 2020 in Articles, Digital Assets 101
What is Cryptocurrency? Digital Assets Explained
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Cryptocurrency and digital assets are sometimes used interchangeably, but they don’t have the exact same meaning. If you talk about digital assets in other industries besides financial services, people might have a different idea. Let’s see what cryptocurrency is and what’s the difference compared to digital assets. 

What are digital assets? 

Digital Asset, in general, is any content that is stored digitally. This content you are reading, images on Facebook, and all Google content you see are digital assets. In the financial sector, digital assets are usually referred to as a tradeable asset such as a gold token for online gold trading or cryptocurrency. 

What is cryptocurrency? 

A cryptocurrency or digital asset is 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. Essentially, cryptocurrencies are limited entries in a database that no one can change unless specific conditions are fulfilled. Cryptocurrency can be bought, sold, traded, or stored. Cryptocurrency represents value for a service built on blockchain technology. Blockchain, sometimes referred to as Distributed Ledger Technology (DLT), makes the transactions of any digital asset unalterable and transparent through the use of decentralization and cryptographic hashing. Most blockchain-based cryptocurrencies use the public blockchain, however, there is a different type of blockchain which is the private blockchain. For more information. Please read here.

What is the most popular cryptocurrency? 

Bitcoin is the most popular digital asset, as it was the first cryptocurrency in existence. Since the beginning, it was seen as a store of value and technology that can change the way people transact with each other. The bitcoin blockchain technology enables removal of the middleman to create a secure, trusted peer to peer network. Since the introduction of Bitcoin, the digital currency has proved to be the best performing return of investment compared to every available stock and share. This is undoubtedly one of the main reasons why people continue to invest in Bitcoin. Other than Bitcoin, there are over 5,000 cryptocurrencies, and those are called Altcoin or alternative coin. 

What is a market cap in the cryptocurrency?

Market capitalization or market cap is the number of shares multiplied by the current share price. For cryptocurrency, the market cap is the number of the total coin in the market multiplied by the current price of that coin. So if you check on 13 May 2020, you might see that there are around 18,376,156 BTC in the system, and the price at 11.30 am is $8,910.08, so the market cap at this time is 18,376,156*8,910.08 = $163,732,989,783. 

Can I trade cryptocurrency legally? 

In many countries, digital currencies have different laws surrounding their use. The trading of digital currencies Crypto/Crypto such as ETH/BTC pairing is legal. However, the jurisdiction for trading Crypto/Fiat pairing defers for different countries. Many governments will generally intersect with banking or remittance services whenever they are exchanged for fiat currencies or visa versa. Therefore it is best to check with your local laws to understand any tax obligations you may have to report.

Can I change cryptocurrency to my normal currency? 

To increase the ease of purchasing Bitcoins and other major Altcoins, fiat to crypto pairings are created. However, crypto exchanges that wish to provide fiat to crypto pairings are required to apply for a license based on the jurisdiction of each country. Zipmex recently received the Thailand Digital Exchange License which allows us to provide exchange services for digital assets and cryptocurrencies. This means we are licensed to provide BTC/THB pairing for our Thailand users.

We are in the midst of applying for licenses in countries such as Singapore, where official laws on Digital Asset have been recently published by the MAS regulator. Since Zipmex has been in operation in these countries before the regulation came into effect, we are allowed to provisionally operate while waiting for our actual license. In Australia, Zipmex has registered and is regulated by AUSTRAC (Australian Transaction Reports and Analysis Centre).Now that we know what cryptocurrency is, we hope you will feel more confident investing in it. Please check our blog section to learn more about digital assets trading such as which coin should you invest first? Or the full explanation of Bitcoin. Follow us on  Facebook or Twitter for our latest updates and official launch in Thailand soon.