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We have seen seismic shifts in the financial markets as a result of crypto assets which are similar to cryptocurrencies in that they function as a store of value and a medium of exchange, but they also have a layer of functionality. Let’s understand the ecosystem players of Crypto Asset market.
Main Actors In The Crypto-Asset Market
- Financial Intermediaries
- Trading Platforms and exchanges
- Wallet Providers and Custody service provider
- Payment and merchant service provider
- Liquidity Provider
- Miners or transaction process
- Crypto asset developer and issues
Participants In Crypto-Asset Transaction
The following are the main participants involved in any transaction of crypto assets:
- Users: Users could be natural persons or legal entities that intend to use crypto-assets for varying purposes – among other things, this could include peer-to-peer payments, purchase or sale of goods and services, or investment.
- Miners: Transactions on a blockchain network are validated by miners through the proof-of-work consensus mechanism. Miners use complex software and vast amounts of computing power to do so and are often compensated for their efforts through the decentralised issuance of crypto assets.
- Crypto-asset exchanges: Crypto-asset exchanges enable users to exchange their crypto assets for fiat currency or other crypto-assets and provide these services for a fee. They can be affiliated to administrators (i.e., entities issuing crypto assets), independent, or act as third-party providers. Examples of such exchanges include Bitfinex and Kraken.
- Trading platforms: Apart from crypto-asset exchanges, trading platforms may also facilitate transactions. They act as marketplaces that connect users with one another. However, unlike exchanges, they do not buy or sell crypto assets themselves but only facilitate these transactions
- Wallet providers: Wallet providers offer wallets to users that help in the holding, storage, and transfer of crypto assets. Wallets hold the private key of a user which allows them to transact crypto-assets using the public key accessible to users on that blockchain network. In addition to maintaining a user’s transaction history in a manner that is readable, wallet providers also ensure the security of transactions. There are several kinds of wallet providers, among them hardware and software wallet providers. There are also different ways to store wallets – online (“hot storage”), or offline (“cold storage”). Sometimes, exchanges could double up as custodian wallet providers by safeguarding a user’s private cryptographic key.
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Manoj Dharra
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