What Is a Crypto Commodity?
Crypto-commodity is a general term used to describe a tradable or fungible asset that may represent a commodity, utility, or a contract in the real- or virtual-world through exclusive tokens on a blockchain network.
Understanding Crypto Commodities
A quick dive into the evolutionary history of cryptocurrency platforms is helpful in understanding the concept of crypto-commodities.
As the Bitcoin network evolved, it gained popularity for its ease of payment processing and its decentralized nature. Technology stalwarts were quick to realize that blockchain networks could be used for more than simple online payments. This is how Ethereum emerged, a unique smart contract-based crypto-commodity system.
Although Ethereum works as a standard blockchain network and has its own virtual currency token (ETH), it offers a lot more functionality than the bitcoin network. On Ethereum, anyone can create their own digital tokens, which are easily tradable and can have valuations independent from ETH.
These digitized tokens can be used to represent any kind of virtual or real-world asset, such as in-game objects, rewards points, or real-world commodities.