Digital Assets

Digital assets include everything that exists in digital form. These can be photos, videos, logos, data, etc. Some have gained popularity in recent years due to their association with cryptocurrencies and blockchain technology. These include cryptocurrencies themselves, NFTs and virtual real estate in the metaverse.

In the past, digital assets such as data or scanned documents were owned and used by organizations to realize value. However, when blockchain technology and cryptocurrencies were introduced in 2009, digital assets were redefined. Anything in digital form can be used to create value through tokenization on the blockchain.

Instead of relying on banks, digital assets in the crypto world use decentralized networks based on blockchain technology.
Since crypto assets are not tangible, owners have a private key, allowing crypto assets to be moved from one entity to another without the intervention of a financial institution.

Digital assets in the crypto world and their main advantages:

• ‍DeFi – a core digital assets component is the use of decentralized digital ledgers to record asset ownership and transactions. Traditional assets, on the other hand, are recorded in private ledgers maintained by a central authority. DeFi allows consumers to trade digital assets without the need for a traditional financial institution.
• Transaction transparency – thanks to blockchain and DeFi technology, transactions recorded in a digital ledger can be seen by anyone. While there is still a certain level of privacy with blockchain and digital asset transactions, this structural transparency will allow for greater visibility and clarity concerning the parties involved in the transaction.

PROs

• Speed
• Efficiency
• Lower costs
• Transparency

CONs

• Illegal activities
• Vulnerability
• Complex settings (for companies)
• Volatility