We are living in a digital world, where we interact with thousands of digital assets daily. Blockchain is designed to represent practically any digital data while ensuring security, transparency, and decentralization. Blockchain technology makes way for even more possibilities in the field of digital assets when it comes to crowdfunding, creation, distribution, identification, management, protection, and more.
You can visualize a blockchain as a chain of records stored in the forms of blocks which are controlled by no single authority. It is a digital public ledger where all transactions are recorded immutably and kept transparently. The immutability is thanks to the fact that a specific blockchain is distributed across countless computers that are all linked together, making a specific blockchain network. The blockchain is based on two fundamental concepts: (1) the block with transactional information, (2) the chain which connects all the blocks in a blockchain through a cryptographic hash.
Blockchain can be used for digital payments using cryptocurrencies, such as Bitcoin, Litecoin, etc., for DApps (Decentralized Applications) and smart contracts e.g. on the Ethereum platform, and, last but not least; they can be used as a form of a digital asset.
What Is a Digital Asset
Digital assets refer to content that is stored digitally in computer systems or digital storage devices. The content can either be electronically created (e.g. a document) or made by hand and converted to a digital format later on. A painting or handwritten notes can become digital assets if they are scanned, and the scans are stored digitally.
The world of digital assets is rapidly expanding as new digital file formats are being introduced with new evolving technology. For instance, in the 1980s nobody imagined there could ever be something called “MP3” but after the 1990s the MP3 file format was introduced and today, we use even more advanced formats, such as MP4 and the like.
Common digital asset examples include:
- Digitally stored photos
- Digitally stored design files
- PDF files
- Text documents and eBooks
- Spreadsheet documents
- Websites and HTML documents
- Smart contracts on blockchain
Defining Characteristics of Digital Assets
In more technical terms, a digital asset can be defined as a group of self-contained, uniquely defined, binary data with a value. It is a form of data that can be directly interpreted and/or executed by a computer.
This gives us three defining characteristics of digital assets:
- A digital asset is digital in nature.
- A digital asset needs to be uniquely identifiable.
- A digital asset provides value.
Let’s take a look at these features, one by one.
1. A Digital Asset Is Digital in Nature
This means the asset (document, content, or file) must be in a format that can be stored digitally. For instance, if it is a photo, it must be in a format that can be stored in a digital storage device.
Though most digital assets are electronically generated, technological advances have made it possible for manually generated content to be converted into digital assets. You can scan anything and thus change it into a digital asset for storage in the computer or any other digital storage device for that matter.
2. A Digital Asset Needs to Be Uniquely Identifiable
Just like in any other asset, a digital asset must be unique from another. If there are several digitally stored photos, for example, each of these should be unique. Exact duplicates can be easily found and deleted as unnecessary.
Besides making the assets digital, this also makes digital asset management possible.
Some of the identifiers used to uniquely specify digital assets include:
- Time stamp
- File format
3. A Digital Asset Provides Value
A digital asset provides value to an individual or to a company. Thus, a digital asset must be owned by either an individual or a company.
The value of a digital asset goes beyond its cost. It also includes the time spent producing the digital asset and the ability to recreate or reproduce it.
The most highly valued digital assets are those that take a lot of time to produce. For example, it would take relatively less time to produce a photo by taking a picture, rather than getting a fully edited eBook ready to be distributed (creating the content and having it approved).
Those digital assets that are impossible to recreate are also very highly valued, since upon being lost, they can never be reproduced. They may be from events that only happened once, or it could be that there is not enough money or time to recreate them. A good example is a photo of a game-winning goal in a football match. Such a photo cannot be recreated in case it is lost.
Benefits of Digital Assets
As the world becomes more and more digitized, the way of doing business has also changed greatly, and most advertising is being done through online channels, which largely depend on digital assets.
Digital assets have become crucial since they serve as the visual representations of the products, services and brands that you are advertising. Therefore, they define the connection between the company and the customers and also provide the company with the opportunity to interact with its customers.
For instance, if customers come across an article reviewing your product online and they like it, they could purchase it and also leave feedback about it.
Making Digital Assets Discoverable
Digital assets can only be valuable to an individual or company if they can be found by customers. That is why it is always important to take time and ensure that each of your digital assets is discoverable.
And digital assets are made discoverable by consistently using metadata and smart taxonomy.
Taxonomy refers to a hierarchical structure that enables the categorization and classification of digital assets for ease of navigation and identifying relationships between the digital assets. It helps users and customers browse for digital assets in a digital management system.
Metadata is simply data that describes the data stored in your digital assets. It provides information about the digital asset besides its filename.
Metadata can be split into two basic categories:
- Technical metadata
- Descriptive metadata
Technical metadata is usually displayed automatically. If you are dealing with a photo, for example, the technical metadata would include items, such as resolution, dimensions, size, and a photographer’s name.
Descriptive metadata defines the purpose of the digital asset for the discovery of the asset. It typically includes title, keywords, and description.
Digital Asset Management (DAM)
Though some prefer using in-house techniques to make their digital assets discoverable, most companies use digital asset management software or systems to manage their digital assets and get them to the people that they want them to reach.
Digital asset management refers to the process of organizing, managing, and sharing digital files. A digital management system is a software that is specifically developed to serve as a central location where you keep all your digital assets (like photos, videos, text documents, spreadsheet documents, etc).
DAM makes it easy for staff to access any digital asset they need to create consistent content for the company’s or brand’s content, especially for large brands that have many digital files that they want to keep track of.
By using DAM, companies can efficiently manage all their digital assets while saving money and time required to obtain the assets.
Features of Digital Asset Management
- The digital asset management (DAM) system should manage who accesses your digital assets and who owns them. It should be flexible enough to allow you to change the permissions to allow you to adapt to changing situations.
- DAM should let assets be uploaded individually, or in bulk, and also allow the assets to be manipulated.
- Makes sure the stored assets are secure. It controls the access and user roles.
- It stores the binary data and the metadata of the assets.
- Once the assets are stored in it, it renders them into new forms like thumbnails or proxy files.
- Enriches the digital assets by extending their metrics and metadata, depending on their use.
- DAM should be able to relate the different assets through tracking the relationships between an original digital asset and the subsequent versions of the assets.
- Provides a means of regulating the structured management process, the creation of the assets, and review of assets using workflow tools.
- Makes it possible for users to search and find digital assets using workflows, metadata, access control tools, or collections.
- Provides users with previews of the digital assets before downloading.
- Provides a variety of methods for sharing digital assets.
Benefits of Using a Digital Asset Management System
- Makes it possible for brands to maintain consistency and engagement.
- Makes it easy for brands to share their digital assets.
- Makes it possible for teams in a company to connect and be able to access brand content faster.
- Also makes it easy to control rights and user permissions.
- Streamlines workflows and saves time and money.
Blockchain and Digital Assets
Here are just a few examples, how blockchain technology will make using and working with digital assets much more streamlined.
- P2P payments for digital assets: The asset creators can get payments for their creations directly from the customers. With no intermediaries taking their massive cuts, the assets could be offered for a much lower price to the clients.
- Crowdfunding: Creators of digital assets can benefit from crowdfunding directly, with no intermediaries.
- Automatic payments: Smart contracts on blockchain can be programmed with all sorts of conditions to enable any type of payments, including wages, royalties, dividends, subscriptions, fees, etc.
- Decentralized distribution: Decentralized blockchain technology makes it very easy to distribute practically any digital asset in a completely decentralized way.
- No censorship: Thanks to decentralized blockchain technology, censorship by any central authority should become a thing of the past.
- Voting mechanisms: If needed, voting mechanisms on the blockchain make it much easier to publish digital information that needs to receive a majority of votes from the network.
Blockchain and All Kinds of Digital Assets
Digital assets and digital asset management clearly yield many advantages, which is the reason why so many assets are digitized and why analogue formats tend to be abandoned (e.g. film photography vs. digital photography, music on LPs vs. MP3s and other digital formats, etc.).
Decentralized blockchain technology makes way for even more possibilities in the field of digital assets when it comes to crowdfunding, creation, distribution, identification, management, protection, and more. That’s why we can rightfully anticipate that blockchain technology will be used more and more with all kinds of digital assets.