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Firstly, there's a few concepts that we need to cover to help you understand what an algorand asset is.
The first concept is digital tokens and Algorand standard asset is a digital token. So what is the digital token? Well, a digital token is essentially a piece of data
that you can store and track on a blockchain. It's something that you can have ownership of and you can have a quantity of that ownership.
So you can own five tokens or one token or point 25 tokens. For instance, a digital token is something that you can transfer.
So if I own a token, I can transfer that token to you. So these are the intrinsic properties of a digital token
ownership quantity and trade ability tokens can also have metadata attached to them, which we'll go through shortly.
The next concept to understand is fungibility. This is about whether or not an item is unique or easily interchangeable.
Money is the example most often used to describe the idea of fungibility. If Laura loans a $10 coin to Anne
and then sometime later Anne returns a different $10 coin to Laura Laura's happy she has the same amount of money that she had before the loan.
And it doesn't matter that the physical object is different. She can still use that second $10 coin for another transaction.
It's still worth $10. And that's because money is fungible. Physical representations of it can be swapped because they're interchangeable.
However, if Laura is actually a coin collector and she loans a rare $10 coin to Anne and then later on Anne returns a different $10 coin to Laura,
it's likely that Laura's not going to be very happy, or maybe she'll be very happy if the returned coin is actually a rarer or more valuable one.
But in this case, they aren't exchanging a swappable, fungible object. They're actually exchanging something unique
or nonfungible that aren't substitutable for each other. So why does this matter when we're talking about digital assets?
Well, with most digital assets, it's easy to just take a copy of them. They're completely interchangeable. It isn't possible to tell which one of them
is the actual original. However, if you can create a non-fungible digital asset, you can prove that it's unique
and it's not interchangeable with something else. So, for instance, this is a representation of one of the most well known digital assets.
Cryptopunks number 5822. Now I can put a copy here on the screen. This is just a copy of the image that that nonfungible token points to.
It's not the actual non-fungible token asset itself. There's only one of those. And sadly, I don't own it.
So back to Algorand standard assets otherwise known as ASAs. As I said at the start, ASAs are digital tokens,
and more specifically, ASAs are the built in ability to create,
store, own and transfer digital assets on the Algorand blockchain. Now the great thing is that in Algorand, this is a built in first class concept
which makes it easy to interact with unlike in other blockchains like Ethereum, for example
You have to write a whole bunch of smart contract code to be able to create and interact with digital assets. There's no easy way to just make an API call
to the blockchain to say, create a new asset or transfer it. You have to write code to do that. Whereas in algorand with one API call, you can create a digital token.
Now Algorand standard assets can be used to represent both fungible digital tokens and nonfungible digital tokens.
So an example of a fungible digital token is UDSC which is one of the stablecoins on Algorand. This lets you represent a US dollar
and then transfer that between US dollars analogous to the native currency on the Algorand blockchain. Examples of Nonfungible tokens on
Algorand would be, for instance, some of the profile picture NFT projects which have become fairly mainstream in social media recently. So these two here are a couple of examples
of the most prominent collections in Algorand. The first one is MNGO 530 and the second one is Algoanna 226.
Right. We understand at a high level what an asset is, but what are some of the use cases of ALGORAND standard assets?
Well, first and foremost, you can use it to represent currencies or coins
or representations of economic value. You can also use it to represent loyalty points for things like frequent flier programs and retailer reward programs.
There's a whole heap of use cases in gaming around representing, leveling and unique, tradeable
game items and the like. We can use it for certifications so that you can prove that someone has some sort of license to operate
or has attended a certain course or similar. You can use it to represent assets, so it might be something
like the deed of a house or a plot of land or a physical asset, provenance or tracking the supply chain of high value items. And at the end of the day, a blockchain is the ledger.
So there's a number of different ledger based use cases. One of the ones that my team built is something called the Data History Museum,
where we're using assets on Algorand to represent verifiably authentic digital historical artifacts.