Cryptoassets: A Deep Dive

This guide is designed to help you review your understanding of the source material for cryptoassets, especially the concept of combining real-world products with virtual-world ownership. It contains a summary of the learning objectives followed by a quiz short-answer question.

How do cryptoassets relate to real-world products?

What is the role of ERC-721 and ERC-1155 tokens in the system discussed in this article?

Explain how the “genotype” and “phenotype” data in a digital asset affects its properties.

Describe how “digital breeding solicitations” work in the system.

What information is encoded in a “digital shoe ID”?

How can users prove that they purchased authentic shoes?

Explain the role of “collaborative science algorithms” in digital breeding.

What is a “crypto-property package” and how is it used to modify digital assets?

What role does a “product pre-order platform” play in managing retail product launches?

Describe the mechanism for identifying potential “flipping” activity and how the platform handles such activity.

Answers

Cryptoassets can be associated with real-world products, such as shoes. Purchasing an authentic product generates a unique digital asset that is stored in the user’s cryptocurrency wallet and represents virtual ownership of the product.

ERC-721 or ERC-1155 tokens are used as cryptographic tokens to verify the authenticity of real-world products and digital assets. One token can be used to verify the real-world product, while the other can be used to access and trade the digital asset.

Genotypic/phenotypic data determines various characteristics of the digital asset, such as color, style, and rarity. These characteristics affect the overall value and desirability of the digital asset, similar to how the attributes of a real-world product affect its value.

A “digital breeding solicitation” is when a user requests that their digital asset be combined with another digital asset to generate an offspring asset with characteristics from the “parent” asset. The system utilizes collaborative science algorithms to accomplish this.

A “digital shoe ID” contains genotypic and phenotypic data about the digital shoe, the attributes of the associated real-world shoe (such as color and material), and a unique identification code for the owner.

Users prove they purchased an authentic shoe by scanning a unique product identifier (such as a UPC or UPIN) on the shoe. The system then verifies this code and generates the corresponding digital asset.

The “Collaborative Science Algorithm” determines which specific properties the offspring digital asset inherits from each “parent” asset. It utilizes a random number generator to ensure uniqueness in the breeding process.

“Crypto-Digital Property Packs” are essentially smaller digital assets that can be added to an existing digital asset to modify its appearance or functionality. For example, a property pack could be used to change the color of a digital shoe or add a new logo to it.

“Product Pre-Order Platform” is used to manage the release of limited edition products, allowing users to register to purchase and receive the opportunity to purchase or receive digital assets through a virtual queue system.

The system identifies potential reselling activity by tracking the time digital assets are held and flagging any transactions that fall below a predefined holding time. Actions can then be taken, such as limiting or suspending accounts associated with suspected reselling activity.

Key Glossary

Term Definitions Crypto-Digital Assets Digital collectibles or virtual items secured by blockchain technology that guarantee uniqueness and ownership. Non-Fungible Tokens (NFTs) Unique and non-interchangeable tokens that represent ownership of digital assets. Blockchain A decentralized, distributed ledger that records transactions and ensures transparency and immutability of digital asset ownership. Digital Shoe Identifier A unique code containing genotype/phenotype data and associated real-world shoe information, used to verify the authenticity of a digital shoe. Collaborative Science Algorithm An algorithm used in the digital breeding process to determine the specific characteristics that an offspring digital asset inherits from its "parents." Encrypted Digital Property Package A smaller digital asset that can be added to an existing digital asset, which can modify its appearance or functionality. Product Pre-order Platform A system for managing the release of limited edition products, where users can register to participate in the purchase and potentially receive the associated digital asset. Scalping The act of reselling a limited edition product or digital asset at a price above the retail price, usually for profit. Genotype The genetic information encoded in a digital asset that determines its phenotype. Phenotype The observable characteristics or properties of a digital asset that are determined by its genotype and may be affected by environmental factors.