As our lives increasingly migrate into the digital and metaverse, the difference between the physical and digital worlds has reduced exponentially to the point where there is a very subtle distinction between the two. Understanding the nature and dynamics of the digital world and digital assets becomes important. The #web3 space is vast, and getting lost in a sea of terms and definitions can be easy. Consider this a brief introduction to this ever-changing universe.
The internet has made the transfer of information and values more accessible over the past decade. In our digital age, digital assets, once tangible, have shifted to intangible forms of value. Advancements in technology have elevated the significance of these assets, which are created and stored digitally. Blockchain technology has revolutionized the management of digital assets, providing new levels of digital ownership, fractionalization, security, and innovation.

‘Unlike traditional assets on centralized servers, blockchain-based assets are represented by tokens, ensuring transparent ownership through decentralization and cryptography.’

Integrating technological advancements in our daily lives has led to a surge in the popularity and value of digital assets. This growth is closely related to the transformative impact of blockchain and #web3 technologies, which has fundamentally changed how we handle and perceive digital assets. #Web3 brought a new digital ownership, security, and innovation era by leveraging decentralization and tokenization. It has established a foundation for enhanced security and decentralized control over these valuable digital assets.

Bitcoin and Ethereum are two of the most popular digital assets in the world. They are both based on blockchain technology but have some key differences.

Bitcoin was launched in 2009 by Satoshi Nakamoto, an anonymous person or group. Bitcoin (BTC) was the first-ever ‘cryptocurrency’ and remains the most widely known and used today. Bitcoin was designed as a digital alternative to traditional currencies, aiming to provide a decentralized transfer method. Bitcoin transactions are verified by a network of nodes through cryptography and recorded on a public ledger called a blockchain.
Ethereum (ETH) was proposed in late 2013 and brought to life in 2015 by Vitalik Buterin. Ethereum’s primary purpose extends beyond simply transferring value. Instead, Ethereum is designed to be a platform that allows peer-to-peer contracts and applications to be built and run without any control, permission, or interference from third parties. These applications, known as decentralized applications or DApps, are powered by Ethereum’s cryptographic token, Ether (ETH). In other words, Ethereum is a programmable blockchain that allows developers to use the blockchain’s infrastructure to build their projects, which is impossible with Bitcoin.

Some types of digital assets

• Commodity Token is the term for a tradable and fungible token representing a commodity, utility, or asset on-chain. The underlying asset’s value is tokenized on a blockchain, and the asset is secured or held in reserve. Tokens are built on top of an existing smart contract. Tokens represent various assets, including utility, security, and non-fungible tokens (#NFTs).

• Utility tokens provide access to a company’s products and services. Unlike cryptocurrencies, utility tokens are not designed to be an investment medium. Instead, utility tokens are like digital coupons that can be used for a service that is already live or being developed.
• Security tokens are digital assets representing transferred ownership rights or asset value, like real estate, vehicles, or corporate stock, to a blockchain token. Depending on the scale of the physical asset, a security token can represent the whole or a fraction of the asset.
• Non-fungible tokens (#NFTs) can represent ownership of digital art, collectibles, virtual real estate, gaming skins, and more. Each #NFT is distinct.

• Decentralized Autonomous Organizations (#DAOs): DAOs use tokens to represent ownership and voting rights for participants in decision-making processes.
• Real World Assets (#RWA) are used to represent tangible, real-world assets as tokens. Real-world asset tokens take on the tangible asset’s value by acting as a digital record of ownership. Because of this, they are often referred to as the digital shadow of a tangible real-world asset in the blockchain ecosystem.
• Hybrid tokens do not hold the conventional values of security tokens. However, hybrid tokens can be valued for investment and practical uses on a platform. They benefit two types of token holders: investors who hold for speculative value and participants who want to gain the right to a specific product or service.

Conclusion

Blockchain and #Web3 have transformed digital assets, changing how we perceive ownership, value, and trust online. As the ecosystem evolves, we are still discovering its full potential. Decentralized and secure digital ownership is becoming the norm, with blockchain's versatility creating various forms of value, from currencies to collectibles. These assets serve specific purposes, contributing to decentralized finance, digital ownership, and new governance models.

About Phyken Network

Phyken Network is a Layer 1 app-chain and DeFi protocol on Polkadot, building an RWA asset fractionalization protocol, particularly emphasizing #GRWA: renewable energies and solar power on the blockchain — Secured by Polkadot.