Digital assets, cryptocurrency in general, have significantly impacted almost everyone who uses the internet. At the same time, people have started to invest and use cryptocurrencies on the go. The technology behind crypto is robust and evolutionary, but more often than not, crypto assets need clarification as to what class of digital assets they fall under and what they represent.
No doubt, crypto assets have redefined how everyone uses digital assets. More robust laws exist because businesses have started digital assets investment to improve and grow their online presence. Let’s delve deeper into the debate of Digital assets vs. Crypto assets and see how they are different as well as similar to each other.
What Are Digital Assets?
Digital assets are created and stored digitally. Anything that can exist in a digital form, and provide a particular value to an organization or the individual who owns it, is a digital asset. In the early days of the internet, the definition was quite different, but it has changed drastically as the internet has evolved.
Any photo, video, document, or text is a digital asset as long as it is easily identifiable and discoverable. Digital assets, being stored digitally, are exclusively stored on digital devices like computers, mobile phones, storage drives, etc.
Usually, to make a digital asset easy to identify, it is shipped with metadata. A digital asset has a primary name, but metadata provides more information. For example, if the asset is a photo, the metadata will provide details such as the format of the file, resolution, date the photo was taken, location, and more.
Also, digital assets can be more efficient than physical assets in some regards. An organization can save time and money on printing materials and easily share and digitally make its assets accessible to almost anyone worldwide. Digital assets are also easy to track and measure.
In 2008, when cryptocurrency was introduced, digital assets quickly became more popular and started to appeal to more users and companies around the globe. This resulted in changing people’s perspectives toward digital assets.
What Are Crypto Assets?
Crypto assets are digital cryptographic assets. As mentioned above, cryptocurrency and blockchain came into existence in 2009. The whole concept was found attractive by many.
Crypto assets can be of many types, ranging from cryptocurrency to NFTs. Most people or organizations use cryptocurrency because of its decentralized nature, as they can instantly transfer cryptocurrency and invest in crypto to maximize and capitalize on profit.
An estimated 106 million people worldwide have bought their shares of bitcoin, the first cryptocurrency to ever be launched, and 22% of them are Americans. Crypto assets have changed how we look at digital assets altogether.
Cryptocurrency is also sometimes referred to as blockchain’s native currency. The most common use cases of cryptocurrency are investing and making private transactions as several merchants have started to accept popular cryptocurrencies like bitcoin and ether on a global scale.
There are many types of cryptocurrency and crypto assets, for example, cryptocurrencies like Bitcoin, Ether, Dogecoin, and NFTs (Non Fungible Tokens). Let us understand the difference between crypto and digital assets now.
What Is The Difference Between Crypto And Digital Assets?
Crypto assets are a subset of digital assets. This is the main difference between digital assets and crypto Assets. Not all digital assets are crypto assets, but all crypto assets are digital assets. The two terms are used interchangeably by many people, but that is incorrect.
A digital asset or digital currency refers to a currency that exists online and uses cryptographic encryption to secure its transactions while recording it on the blockchain.
Blockchain is a shared public database and is used as a method of securely recording information or blocks. Each block is encrypted according to the blockchain and encoded information about the previous block. These blocks are generated via specific protocols.
Moreover, Digital assets are usually put under a DAM or Digital Asset Management. It is software or a system solution that helps store, organize, and manage digital assets efficiently and systematically. Some digital asset management companies, like Nickel Digital Asset Management, provide digital assets management.
Is Cryptocurrency A Digital Asset?
Short answer: Yes. Cryptocurrency is a crypto asset, and all crypto assets are digital assets. Hence cryptocurrency is a digital asset that an organization, or individual can own for its value.
Cryptocurrency is a virtual currency. The main advantage of using a cryptocurrency is that it includes secure and faster transactions. Some people market cryptocurrency for generating massive profits or for the transparency and security of the blockchain network. These are just some of the many advantages of cryptocurrencies.
What Are Examples Of Digital Assets?
Digital assets can have many examples, but three critical factors define whether something is a digital asset.
- The asset should provide value in any way to the individual or the company that owns it.
- The asset should exist digitally, most preferably exclusively only.
- The asset should be easily identifiable from the rest and discoverable to the public.
File types such as photos, videos, documents, audio files, and more represent digital assets. A company’s logo, website, videos, or photos, which provide the necessary details of the information or product they offer, are digital assets examples.
What Are Examples Of Crypto Assets?
As mentioned earlier, Crypto assets are of many types. Being an asset as long as the crypto asset provides value of any sort and is of cryptographic technology, it is a crypto asset. Some widespread examples of crypto assets are –
Cryptocurrency is a digital or virtual currency. It is decentralized, and the value depends on the currency’s supply and demand. Bitcoin was the first cryptocurrency to be launched in 2008. Bitcoin, Ether, or BlackRock crypto are some common examples.
Non-Fungible Tokens, or NFTs, are cryptographic tokens. They are unique and contain identification and metadata that separates them from the rest, and NFTs cannot be replicated. NFTs can be anything ranging from artforms, in-game avatars, virtual fashion items, etc.
Security tokens are often used as investments like stocks, bonds, or certificates. These tokens are created to represent an asset value to the blockchain, but their use cases are different from cryptocurrencies.
Because crypto is one of the biggest trends on the internet, it is important to note how and what exactly is a crypto asset along with the proper definition of what digital assets represent. It is crucial to know this as you might soon find the concept intriguing and start investing, so it is good to have a step forward knowing it.
There is no doubt that digital assets are the future, with new file formats coming every year or so that constantly change the definition of digital assets. As more and more companies and individuals have started to realize the importance of digital assets in modern times, it is safe to say that the future is digital.