1.2 Characteristics of digital assets

The unique features of digital assets enable them to complement the existing financial system or even reshape the existing financial services.

Figure 7. Characteristics of digital assets

Characteristics Significance

Decentralization Digital assets are decentralized or at least not reliant on any central issuing authority. Instead, cryptocurrencies rely on code to manage issuance and transactions.

Without intrinsic value They cannot be exchanged with other commodities, which have intrinsic value in general.

Programmable supply

Trustless The supply can be inflationary, deflationary or fixed. If it is fixed, it will create digital scarcity and as well as avoids quantitative easing, which can lead to inflation

They are built on a blockchain or other Distributed Ledger Technology (DLT), which allows participants to enforce the system's rules in an automated, trustless fashion.

Cryptography It is a technology that secures the cryptocurrency’s underlying structure and network system

Source: Cointelegraph, Gemini