Coining a new phase: how digital assets will change us

The changes taking place with digital assets could be as pivotal to the global economy as the invention of coinage in 630 BCE.

"Coins changed the world. A more accessible, stable and controllable form of value, it was quickly copied by the Greeks and Romans, leading to thriving economies and cultures.”

Digital assets are a representation of any asset on blockchain and blockchain-based technology is poised to transform the way we trade anything of value – from digital currencies, art and music, to houses, cars, and carbon credits.

As history shows, what form ‘value’ takes has always evolved, taking on new and more efficient - media as technology advances. The ancient Kingdom of Lydia created the world’s first coins: portable, durable and transportable, these coins were used to pay armies in lieu of land, grain and animals. This avoided the inefficiencies that came with bartering such commodities, which could be easily wiped out by disease or invasion.

Coins changed the world. A more accessible, stable and controllable form of value, it was quickly copied by the Greeks and Romans, leading to thriving economies and cultures. Initially, many were baffled by the concept of coins, but those worries quickly dissipated. Suddenly, Empires could raise standing armies that received regularised wages, implement tax systems, and enhance trade and diplomacy with other groups. Coins not only improved social mobility, but it also created a common language. 

Similarly, this is how we should be thinking about the global impact of digital assets – a major transformation in how we move money and goods.

Need for understanding

Just like the original coins not everyone knows how digital assets work and the difference between Blockchain and  Bitcoin,” which is like saying that the internet is the equivalent to email.

Bitcoin and other digital currencies are a type of asset that can be represented and traded over blockchain, much like how email is just one type of correspondence that can be sent and received over the internet.

Blockchain is the infrastructure – an innovative way of tracking people’s assets and transactions in in a single shared ledger. This is unlike current financial systems, where banks and other intermediaries keep separate ledgers that must be updated according to money going in and out of each account on their books. This administrative work is why there are delays processing international payments.

With blockchain, the use of a shared ledger means payments can be recorded instantaneously for all accounts, enabling real-time settlements at much lower cost, whether domestic or cross-border. Sending money across the world becomes as fast and convenient as sending an email.

Another revolutionary feature is that digital assets are programmable. This means payments or swaps using digital assets, can be automated according to pre-set conditions, allowing a new level of economic efficiency to be applied to any industry.

For example, this feature is already being leveraged by many brands and artists around the world. For example, artists are converting their digital art into digital assets (or ‘NFTs’) on blockchain, allowing them to automate the instantaneous distribution of royalties back to their wallet upon each resale of the asset. This creates an entirely new revenue line.  

Converting something into a digital asset – also known as ‘tokenisation’ in the lingo of the sector – makes that asset vastly more accessible and efficient to buy, swell or swap.