The 21st century has brought forth many changes to civilization. Several human operations have been redefined by technological advancements. This advent has helped several individuals, improved business outfits, redefined market structure, etc. So, looking at the title, the first question that comes to mind is, what are digital assets? Simply put, digital assets are valuable commodities that exist in binary format as data with also the right to use. These can come in various forms such as documents, multimedia files, emails, online marketplaces, cryptocurrencies, etc. These assets are kept on storage devices such as hard disks, computers, cloud, online wallets, etc. It is important to recognize that asset is a legally recognized term, thus, any valuable commodity that doesn’t come with a right to use isn’t considered a digital asset. Also, when is an asset said to have a locked in financial value? An asset is said to have a locked financial value when its owners are restricted from selling their assets. This condition is many at times a government-related factor, which can come in form of regulations, taxes, etc. Over time, many commodities are being classified as digital assets. In 2015, Bitcoin was classified as a digital asset by Forbes. Bitcoin is an online currency (i.e. cryptocurrency) that exists on an encrypted platform called the blockchain, which exists as a public ledger that records all transactions.
Types of Digital Assets
1) Audiovisual Content
As I said above, technology has improved over time to redefine several market structures. Musicians, DJs, producers, etc. deal with multimedia content for their services. With the invention of media players from VCD players to DVD players to HD players. Digital assets exist in the form of disks which audio and visual data are stored on. Later on, with the advent of the internet, several online sharing platforms came up, such as Soundcloud, iTunes, Spotify, Tidal, and YouTube, on which these files are stored. These files are shared on these platforms with a unique financial value attached to it, which is constant depending on the terms of service of the sharing platform. For instance, Spotify is a streaming platform where the contents are streamed online, same as Soundcloud and YouTube. However, iTunes is a market where these contents are uploaded by its legal owners to allow sales. Its financial value is measured by these platforms.
2) Online Marketplaces
The mode of buying and selling also has changed with the advent of the internet and digital storage. Many internet entrepreneurs have used the internet as a platform to connect to sellers. Such firms include stores such as Amazon that put up educative materials in the form of books and audio for download. This is another form of digital asset with the inclusion of its metadata. There are also many other marketplaces that host data. Such includes eBay, an online based market/store that connects sellers to buyers to buy several items such as electronics, clothes, shoes, etc. We also have Alibaba, which is a China-based company that deals in the same things eBay deals with. These assets are assets that also have a financial locked value.
Cryptocurrencies, as its name implies, are currencies that exist on a digital network which are encrypted. In most cases, these cryptocurrencies are decentralized. Although there have been innovations since the late 20th century, cryptocurrencies didn’t get popular until the creation of Bitcoin in 2009 by an anonymous identity named Satoshi Nakamato after the financial crisis rocked the world economy. For years, controversies have followed cryptocurrencies with several links to money laundering and fraud. However, over time people were able to identify that cryptocurrencies are here to stay with Forbes classifying it as a digital asset. Presently, due to the nature of cryptocurrencies and the blockchain as a system that can’t be hacked, cryptocurrencies are generally unregulated and beyond government control. Thus, in a sense, its financial value isn’t locked in due to this. Cryptocurrencies are digital assets that have several use cases. For instance, several firms accept Bitcoin as a means of payment now. Firms such as Microsoft, Wikipedia, Tesla, Shopify amongst others. There are also other cryptocurrencies that have limited use cases to industries. For instance, there are heath related cryptocurrencies like Smart Health, Care Coin, etc. In simple terms, what cryptocurrencies are out to achieve is the tokenization of currencies.
4) SMS, Emails, and Documents
Email is the short form for electronic mail. The mode of communication have evolved from time memorial until present. Technological advancements brought about email as a follow up to SMS. These mails are digital assets that contain vital information with respect to the owner. There are various service providers that provide mail services such as Gmail, Hotmail, Yahoo, etc. Also, assessable and transferable via these mail outlets are documents that can come in various formats such as PDF, Doc, EPUB, etc. These documents and mails have a locked-in financial value because it is centralized. These assets were a major focus on Mrs. Clinton during the last presidential election campaign as there were allegations that she breached emails that contained delicate information.
5) Social Media and Ads
Social media really defined human interaction upon the advent of the internet. Access to people became easier with top companies such as Facebook, Twitter leading the pack. These platforms are designed in a way to accommodate millions of people with their personal information/data. Facebook for instance has an interface for individuals and companies to open a profile, otherwise known as a page, for their social activities. On these platforms, advertisements are run, which is another digital asset as it might contain photographic content, documents, etc. Recently, Facebook lost billions of dollars on allegations that the companies breached its ethics by releasing user’s data to an agency that allegedly aided Trump’s election. These are also digital assets with locked-in financial value.
Lastly, the advent of digital assets would bring about drastic change in the economic climate of the world. In fact, even as of now, many of the world's richest men have one or two things connected to digital assets.