DIGITAL ASSETS OVERVIEW

For years, traditional financial markets have been burdened by, what some would call, excessive limitations, limiting industries and most people from participating in wealth building. Things are changing with the widespread adoption of digital assets.

Legacy markets have long faced roadblocks such as asset class supply restrictions, cross-border trading, and minimum capital requirements. Digital assets provides an opening for virtually anyone to enter capital markets.

This article provides an overview of digital assets and some of the potential and challenges they can present for retail investors, institutional investors, and financial service providers.

What are Digital Assets?

As the name suggests, digital assets allows for ownership in the virtual world. You can buy, trade, and hold digital assets online, but you can’t usually see or touch them. They can take the shape of domain names, digital currency, or the works of art that are traded utilizing blockchain technology. In either case, their worth stems from a claim to ownership, as it does with all assets. Because digital assets are such a novel and unique asset, it’s critical to understand how they work and the dangers and opportunities they provide.

Cryptocurrencies

Cryptocurrencies are the current market’s most talked-about digital asset. A cryptocurrency is a digital currency that secures data using cryptographic principles. Cryptocurrencies have three main functions: they serve as a medium of trade, a store of value, and a unit of accounting. Today’s most prominent cryptocurrency is Bitcoin, an open-source P2P payment system that allows transactions to be sent without a financial intermediary via a decentralized network.

NFTS

Non-fungible tokens, or NFTs, are digital representations of artwork and other content. In contrast to Bitcoin, each NFT is a one-of-a-kind asset. However, you’ll buy, sell, and trade NFTs using the same technology as cryptocurrencies. NFTs are available for purchase on massive public marketplaces such as OpenSea and Rarible.

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Domain Names

A domain name is a valuable digital asset for pretty much everyone, but especially for organizations with branding ambition. Most of the time, the domain name mirrors the company name. It becomes instantly recognized in the market as your brand identity on the internet. Domain names aren’t just your online identity, it’s often one of your top assets should you ever decide to exit. Don’t believe me? Check out Rally Rd’s most recent asset class introduced for fractionalized ownership.

Your Website

Designing, developing, and promoting an e-commerce store or website takes time and effort. Typically, it takes a year for an internet store to achieve its goals and start receiving orders. For an online store, returning customers are crucial and are valuable to prospective online entrepreneurs. So much so that people are trading websites already on sites, such as Flippa, AcquireBase, and a host of other sites. This can be comparable to selling a car for parts. Even if your business isn’t successful in sales, value can still be obtained from SEO backlinks and even customer mailing lists.

The Bottom Line

Digital assets are expected to be a trillion-dollar opportunity for businesses and investors. New techniques of doing business and establishing wealth are available in the high-speed digital economy. Whether it’s cryptocurrencies, NFTs, domains, or a website, digital assets allow us to rebuild the global economy and develop new business models digitally. The results are increased efficiency and unprecedented access to new opportunities.