A Primer on Crypto-Assets and the Unavoidable Blockchain

This chapter provides an introduction to crypto-assets and blockchain technology, focusing specifically on payment tokens like cryptocurrencies, stablecoins, and Central Bank Digital Currencies (CBDCs). It explains Distributed Ledger Technology (DLT), noting that while all blockchains are DLTs, not all DLTs are blockchains. The chapter highlights Bitcoin's role in popularizing crypto-assets and explains blockchain's ability to securely store transaction data in blocks linked by cryptographic hashes. It also briefly mentions utility tokens, security tokens, and non-fungible tokens (NFTs) but focuses on payment tokens for their relevance to the book's scope. Additionally, the chapter discusses public versus private blockchains and their respective applications in different industries, especially in banking and finance. The chapter concludes by contrasting account-based and UTXO-based blockchains, citing examples like Ethereum and Bitcoin, and noting that both models have their own advantages and limitations.