Digital assets

Title page 1

Contents 3

Summary 4

1. Digital assets 7

1.1. Main categories of digital assets 7

2. How do digital assets work? 12

2.1. The distributed ledger and blockchain 12

2.2. Consensus mechanism 14

2.3. How are digital assets purchased? 15

2.4. How big is the cryptocurrency market? 17

3. A brief history of digital assets 19

3.1. The rationale behind cryptoassets 20

3.2. Bitcoin: The first cryptocurrency 21

3.3. The emergence of an ecosystem 22

3.4. Ethereum and new uses for the blockchain 22

4. Benefits and main risks 25

4.1. Benefits 25

4.2. Main risks 27

5. Legislation, regulation and policy on digital assets 31

5.1. What is already in place? 31

5.2. What is being implemented or proposed? 32

Tables 8

Table 1. Electronic money vs cryptocurrencies 8