Digital Assets and the new windows of opportunity

Our earlier generations had almost no digital assets, but we have started to acquire some. The most mundane of these would be our saved items ranging from memorabilia to writings, research, intellectual pursuits of all kind, right up to our savings frozen in many forms; ideas are the next digital assets and they are more powerful as never before.

The faster you convert an asset into a digital form, your chances of finding value actually increases; your ability to reach more people rises. The power of an idea was never so potent as now in the digital world, not only the reach, it allows transacting without going through intermediaries who could be providing little or no value.

A physical asset is convertible now into a digital asset, thanks to cryptos and tokens.

Most of our digital assets (for a common man) currently has little or no value as they do not have opportunities of trading. But it could change when you reach large numbers of people.

Followership could be your next digital asset, some are already trading followers. Some famous people are being assessed by their followership, recently there were some funny exchanges (could be fake news as well) between two of India’s most followed people on Twitter.

Can you trade a digital personal asset, like conversations, memorabilia, advice, intellectual exchange, personal savings in various forms with someone who could derive value from it? This was not possible in the past, but no more.

The Block chain technology provides the unique opportunity to cut across all formal channels through which transactions need to be done and you could directly trade with people you want.

There are enormous barriers to trade in the world of finance, if you have to make an investment in any asset, whether equity or bond or real estate, you cannot avoid any intermediary. Think of investing in a real estate project and you will have to go through so much of paper work that you will find it so difficult. Supposing you want to participate in a funding program where you want to be a small time investor in it without going through the drill of investment banks, it would be a difficult proposition, But no more. Block Chain directly allows you to be part of this.

The digital asset itself is transforming. Earlier there were crypto-currencies, Bitcoin, Ethereum and Ripple, but now you have digital tokens, something that could replace almost everything from equities to real estate asset.

The concept of a digital asset is simple, it is a way to combine all the advantages in an underlying physical asset, which allows you to trade, but through informal channels as well using Block Chain technology.

Say, you have a mix of assets, like bonds, equity, real estate and you connect them to digital tokens. The digital token allows you to by-pass all the formal channels and intermediaries to directly participate in the trade with either the buyer, seller or your partner.

A start up venture could simply float an idea and have direct connection with prospective investors who could choose to participate or disassociate themselves without going through the formal channels offered by the current world of finance.

Think of a project funded through crowd sourcing and you are a small investor; how could you take a direct entry or an exit without going through the formal channels of prospectus, enrollment, checks that could cost you and therefore knock off a sizeable portion of the value?

Think of the equity market and you will find that 70% is taken away by pension funds and hedge funds; you as a small investor have little choice but to go to them. With digital tokens you actually could be directly dealing with every transaction without any fees.

Let me turn to intellectual assets, this today has no value because for people to understand its value needs other “houses” to endorse and auction. Think of artworks and no matter how great an artist you are, you cannot ignore the “people” who appraise your work and promote you and provide for opportunities of trade.

The same could be true for research, innovation or even other art forms like poetry. Your research could be traded with the right buyer, without going through the known channels.

Extending further takes you the futuristic scenario where every meaningful conversation could be traded if there was a counterparty that could derive value from it.

The faster you convert an asset into a digital form, your chances of finding value actually increases; your ability to reach more people rises. The power of an idea was never so potent as now in the digital world, not only the reach, it allows transacting without going through intermediaries who could be providing little or no value.