In our modern and connected world, we are offered a vast array of investment options. Never before, however, has the potential of these markets been as open and accessible to the common man or woman. With the tokenisation of physical assets, and the creation of new, digital assets, we not only have the opportunity to redistribute wealth but can also level the playing field that has been created by outdated investment rules, and generally inaccessible corporate structures.
What Are Digital Assets?
Much like their physical counterparts, ownership over, or a stake in, a digital asset represents an asset that you are entitled to own or generate income from. Of course, as the name suggests, these assets are intangible.
Although we have grown up in a world based on physical assets, like property ownership, for example, we have moved into a world where software reigns. This has created entirely new industries where asset ownership and management has become more accessible, as intangible assets continue to generate the vast majority of income for corporations. Now, however, you have access to an intangible asset class that has never previously existed.
With the advent of distributed ledger technologies, we can now create a ‘token’ which is linked to or represents an asset. These tokens can then be bought, sold and traded the world over, in mere seconds, adding a new realm of liquidity and accessibility. In general, a token can represent:
Much in the same way you own USD or GBP, digital currencies represent the biggest evolution in finance to date and are consistently reshaping the way we think about money, and transact with each other and businesses. Of course, Bitcoin represents the first and most well known digital currency, however, there are now hundreds to choose from. Not only are digital currencies designed to be used the same as fiat/traditional ones, but they also offer opportunities for developing nations to combat hyperinflation, and offer the first real opportunity to work towards a global currency.
- Ownership of a physical asset.
It gets more interesting when tokens are used to represent ownership of, or rights to, a particular physical asset. Tokens are now used to represent existing physical assets. For example, you might own 2/10ths of one house, and 6/10ths of another one, allowing you to diversify your portfolio and entitling you to the equivalent income from both properties.
Similarly, you may hold tokens which grant you ownership over gold bullion, or rights to income from oil, which you can then trade across the world in a variety of markets.
- A new, wholly digital asset.
Whilst it may be hard to get your head around owning a digital asset, this represents one of the most exciting things to come from distributed ledger technology. As we continue to move our lives online, so too will our understanding of ownership and assets change, in a world where digital files have, and will continue to be given, real-world value.
The generation of digital assets can and will continue to vary across industries, however, some of the simplest examples come from the gaming industry, where you can now actually own weapons and armor, and sell them to other players to earn an income.
Why Are Assets Going Digital?
There are a number of reasons assets are becoming or being generated, in a digital form. First and foremost, digitisation of assets allows us to transfer value, without moving a physical asset, whilst simultaneously removing fraud from the equation. It also allows for the creation of an entirely new class of assets, such as ownership of in-game items, or digital collectibles, for example.
Aside from the obvious reduced overheads and costs associated with generating physical assets, digitisation also allows for:
- Distribution of assets instantaneously, and on a global scale, for a fraction of the cost.
- Fractional ownership. This opens up a plethora of investment and ownership opportunities for the common person, rather than only being accessible to VC’s and the wealthy.
- Liquidity in markets that have traditionally been very immobile, for example, real estate, licensing and IP, and the collectibles industry.
- The removal of arbitration/3rd party interference, fees, and purchasing restrictions.
- Reduced barriers to entry for trading and investing, as it can reduce the minimum payment required to participate.
It’s also important to note here that before DLT, owning and/or creating digital assets wasn’t possible. Sure, you could create images and try to copyright them, but as soon as they made it online, anyone could save the image and steal your property. Now, however, thanks to the immutability of the blockchain we can trace the true ownership of these assets, and verify their legitimacy, without involving any other entity.
This, in turn, lends credence to the industry as a whole and means that markets have been opened up to the most entry-level investors, allowing a new wave of money to enter global markets and a new wave of innovation and technology development.
What Does It Mean for You?
First and foremost, as an every day mom and dad- otherwise known as a ‘retail investor’ you now have access to incredible opportunities to purchase, own, and profit from a new realm of assets. Not only are they accessible as long as you have an internet connection, the existing barriers to entry, such as being an approved investor (must earn over $200k USD per annum to be considered an approved investor in the USA), have been completely removed.
Second, with digital assets and increased access, you now also have the opportunity to support companies and ideas that you believe in. These grassroots, crowdsourced fundraising methods have also taken a large amount of power away from traditional investment vehicles, such as VC’s and IPO’s, giving you more opportunity to build a portfolio that suits you, and on to real-world wealth.
Third, digitisation of assets has the potential to completely change the way we interact with finance, what we consider to be ‘money,’ and the property and assets we lend value to. By allowing a new wave of investors and finance to enter global markets, digitisation is disrupting our economic systems, and rebalancing the scales of wealth across the world. You just happen to already be part of the movement!
Of course, with ownership over a new world of digital assets also comes the need to store and secure your assets. To learn more about how we can help, please see the following article, or join us in Telegram and on social media.
ECOMI is a technology company based in Singapore and is leading the way in the emerging digital collectibles space. ECOMI offers a one-stop-shop for digital collectibles through the ECOMI Collect app bringing pop culture and entertainment into the 21st century.
The Collect app allows users to experience true ownership of premium digital collectibles. Through the app marketplace, users can obtain common, rare, or one-of-a-kind digital collectibles, share these across the social network service, and exchange them with the Collect community, all from the palm of their hand.
ECOMI sees digital collectibles as a new asset class which offers intellectual property owners the opportunity for new revenue streams in the digital landscape. Digital streaming, gaming, and in-app purchasing have become a multibillion-dollar market and the next to join this digital trend is the pop culture and collectibles industry.