In essence, a cryptoasset can be defined as a digital asset that employs cryptographic technologies in order to operate and function. Most notably, cryptocurrencies.
Many people would have heard the word cryptocurrency and made it synonymous with Bitcoin. But there will also be other terms floating around there that seem to mean the same thing: digital asset, and cryptoasset for example.
However, there are some slight differences and nuances that need to be discussed when talking about cryptoassets as separate terms from cryptocurrencies and digital assets, etc.
At its core, a cryptoasset is a digital item that uses cryptography, consensus algorithms, distributed ledgers, peer-to-peer technology and/or smart contracts to function as a store of value, medium of exchange, unit of account, or decentralized application.
All of the above terms are tied heavily into blockchain and cryptocurrencies, and the above explanation of a cryptoasset also holds true for a cryptocurrency. Bitcoin uses cryptography, consensus algorithms, distributed ledgers, peer-to-peer technology to operate as a medium of exchange. Meanwhile, Ethereum goes further to include smart contracts in order to operate dApps etc.
But, this explanation is deeper than cryptocurrencies as a cryptoasset can be cryptocurrencies, utility tokens, security tokens and stablecoins. Cryptocurrencies are fully independent and operate on a specific blockchain most commonly maintained and operated through either proof-of-work or proof-of-stake consensus algorithms.
However, when we start to look at Utility tokens, these are not quite cryptocurrencies, but still fall under the term cryptoasset. Utility tokens are used to access a specific product or a service upon a blockchain. For example, Storj (STORJ) allows a user to pay for using decentralized storage space on its network.
Security tokens are also cryptoassets, but not cryptocurrencies. These assets get their value from other assets that they are tokenizing and are more tightly linked with traditional finance and traditional securities which means much tighter regulations.
Then there are stablecoins which are akin to cryptocurrencies, but their value is derived from traditional fiat currencies. These coins also operate on the blockchain, but can be deployed on different chains depending on requirements.