Blockchain technology changes this core element - the system is not private, but public. A blockchain is a decentralized database maintained by nodes that do not need anyone’s permission to maintain it. Furthermore, anyone who so desires can create a cryptographically secured account (a public address) on a public blockchain and send and receive transactions peer-to-peer, without intermediaries.
Other built-in cryptographic mechanisms and carefully designed incentives ensure that it would be extremely difficult and unattractive for the nodes that maintain public blockchains to tamper with incoming and past transactions and people’s asset holdings. Thus, for all intents and purposes, blockchains are immutable ledgers of transactions with which everyone can interact.
Brief historical overview of crypto assets
Crypto assets were born in 2009 with the creation of the Bitcoin blockchain and the namesake cryptocurrency (BTC). While there was no trading initially, people had discovered that there was demand for both buying and selling BTC. Cryptocurrency exchanges were born and the explosive growth in BTC prices, among other reasons, motivated other researchers and developers to launch other blockchain projects and cryptocurrencies.
The Ethereum project that launched in 2015 took the blockchain and crypto asset vision much further. Using smart contracts, it made it possible for projects to create crypto assets not just for blockchains but for applications built on top of them.
This spurred, between 2016 and 2018, the era of utility tokens and their public offerings (called initial coin offerings, or ICOs) for projects such as Augur and Gnosis (decentralized prediction markets), Golem and iExec (distributed computing), Basic Attention Token (personalized online advertising), MakerDAO (a platform for programmatic stablecoins) and many others.
Finally, a range of smart contract platform projects emerged. Projects building on top of them are also starting to issue tokens on those blockchains. This has rapidly created a growing financial ecosystem with thousands of assets.
This ecosystem and its related infrastructure are also maturing rapidly, though not without some major growing pains. There are currently scores of major cryptocurrency exchanges, crypto asset data tracking platforms, services for asset custody, saving and lending in crypto assets and more.
The crypto space undoubtedly has a huge potential for the transformation of many industries, from traditional finance to the sharing economy, from cloud computing and storage to the Internet of Things. For a nice short talk on the promise of blockchain/crypto technologies see this TED talk by Charles Hoskinson.
How have crypto assets performed compared to some other financial instruments?
You're probably wondering how crypto assets have performed historically compared to other investment alternatives. Initially a completely insignificant niche, they attracted sudden attention in late 2017 which led to a massive upswing in their prices across the board, grabbing the whole world's attention.
Since then, the total market capitalization of crypto assets has decreased by around three fourths from its peak. It has also fluctuated a lot since then. However, if we compare the performance of crypto assets to major financial indices since December 15, 2019 (just before the current pandemic became public), we see that the total market cap of crypto assets has outperformed them.
Between that date and today, it has essentially remained flat (with a lot of fluctuation in between).