Cryptocurrencies have attracted a large following since their inception. Many exchanges now exist where these assets can be traded. The total value of cryptocurrencies held by individuals and institutions, based on traded values, is now close to US$3 trillion. On the other hand, many large traditional asset managers, institutions and individual investors have chosen not to be exposed to such assets.

The market of cryptocurrencies has experienced rapid growth in the number of different currencies. This paper will provide a broad overview of the market by categorising them by type and function.

The paper will then explore the role and uses of specific types of cryptocurrencies, discussing several actual and potential applications. By illustrating these use-case studies we suggest that there may be use and value to some cryptocurrencies, in particular those that are needed to support useful applications.

Key argument of the paper

•The paper addresses the question of whether crypto assets have value, beyond speculative value.

•The paper does this by analysing the properties and uses of various DLT networks, and considers whether these networks are value-adding.

•The paper concludes that crypto assets do have value beyond speculative value due to their role in DLT networks, and due to DLT networks being useful and value-adding.

Other points covered in the paper

•A background on the evolution of blockchain networks from the Bitcoin network to Blockchain 3.0.

•As an Appendix, background on the details surrounding how blockchain networks work.

•The relationship between DLT networks and crypto assets is described, and an argument is made for the need of the crypto asset to operate a DLT network.

•Properties of DLT networks and crypto assets are discussed in detail, including a description of how these properties over improvements over existing technologies.

•Examples of current uses of DLT networks and the value they add are provided.

•The factors influencing the value created by DLT networks are described and analysed.

•The main valuation methodologies for crypto assets were described in brief and the advantages and drawbacks of the methods were discussed.

•The drawbacks of DLT networks and the main arguments against the use of DLT networks are presented.

•Further areas of research are identified.

Practical outcomes of the presentation

•Understand what blockchain networks and DLT networks are, and how they have come about.

•Understand the useful properties that DLT networks have which lead to DLT networks being reasonable solutions to certain problems.

•Understand the type of problems DLT networks are well-suited to solving.

•Be able to give an overview of current uses of DLT networks and how DLT networks are adding value in these fields.

•Understand the drivers of the value created by DLT networks as well as the risks involved in adopting DLT networks as a solution.

•Understand and evaluate the appropriateness of the main valuation methodologies which are used to value crypto assets.