What is a digital asset?

Many people have assets, which they use themselves and trade with others to get different ones. Today, there is a certain type which can only be used or traded through screens, keyboards, light controllers or similar media. The phenomenon is quite surprising. We now have things that are only accessible to our senses through some device. It is like having something that is far away.

Assets in general seem to have a fluctuant nature. Earlier in history, the concept was limited to tools or things made of rock. Then it expanded to include seeds, then land, and then money. That makes sense because whatever we possess can be of many forms, depending on the particular use we assign it. But, of course, not all that we possess is an asset. Given this variety, it seems reasonable to ask: what is an asset?

Things, there are a bunch, but assets have the peculiarity of being valuable in an objective sense, or, more precisely, and an agreed sense. An asset is a thing which many agree has value. A person who has an asset is a person who has a valuable thing, which can be both consumed and traded. If one person has something another considers valuable and doesn’t have it himself, the second is naturally inclined to want that something. That asymmetry opens many possibilities: assets can be generated, consumed, traded, destroyed, or stolen. Those possibilities are real as long as there are things and an agreed value on them. Then, legal commerce can be established to arrange the needed requisites for making the acquisition of assets a legitimate thing, through rules of trade.

Capitalism only makes sense with the existence of assets. Without agreed value of things, there is no trade and without trade there is no capitalism. But we cannot trade everything we value, like emotions, memories, experiences, or beliefs. Only things that can be traded are candidates to becoming assets.

Ok, that is something about assets in general, but, what is a digital asset?

It is a reality that in the last few decades we have created things that are like nothing we had ever seen. These things are, physically, series of digits arranged in a particular order that can be stored in and accessed through electronic devices. The content we experience as valuable is mediated through devices that perform a process of codification and reading that transforms ones and zeros into images, money, text, music, stocks, NFTs and many more things. Not every series of digits is meaningful; only a particular order of digits can be considered a digital thing.

Gathering the pieces, we can conclude that a digital asset is a tradeable thing that has value in an agreed sense, with the characteristic of being composed of a particular series of digits, which we can recognize as things, sensations and meaningful experiences. Just like one could say that a painting is not merely a bunch of paint, a digital asset is not merely a series of digits. The value we assign to it is what makes it a desirable thing, and, that, plus its capacity of being traded, is what makes it an asset.