What is the difference between different digital asset classification and risk levels?
As digital assets such like #bitcoin become more interesting new asset class for institutional and corporate treasury portfolios to non-correlated behavior with major traditional assets and possibilities to provide traditional innovation solutions with CBDCs (central bank digital currencies) and other cryptos it's a good time to understand better how they are classified and what risks levels had.
Utility, payments, security & hybrid tokens?
Different technologies and usage provide different economical models of digital assets.
Utility tokens: provide options to unlock some feature capabilities into the software with limited capabilities to have health demand in further;
Payment tokens (CBDSc, Setcoin) have capabilities to use as payment currencies for real products & services between consumers, businesses, employers, etc.
Usually have well diversification demand from different sources and needs to have limited value volatility to organize stable payment transactions.
Security tokens usually represent a portion or part of real asset options to generate income from assets and grow in value. More secured investment assets rather than utility tokens as having hard assets behind them.
Hybrid tokens could have mixed solutions and capabilities for usage in one token, digital asset.
Different tokens and digital assets required different technologies stack for deploy and running ledgers:
Payment and security tokens required in most cases permissioned blockchain with validation roles;
Utility tokens could be deployed on public blockchain with Proof-of-work (Bitcoin) to Proof-of-stack (Ethereum) algorithms.
In this case, before considering allocating capital into digital assets make sure you have done your homework to understand how digital assets working and what forces facilitate demand and supply of these types of assets.