What is a digital asset?
Digital assets are transforming finance and technology, but the terms can be confusing. Simply put, a digital asset is an item of value that can be securely owned, transferred, or invested in over the internet. They are often built upon a revolutionary technology called blockchain.
See how our 6 Strategic Areas integrate digital assets into projects and programs.
What is a Blockchain ?
A blockchain is a type of Distributed Ledger Technology (DLT) that functions as a shared, immutable, and decentralized database. Think of it as a digital ledger (a record book) that is not stored in one central location (like a bank's server) but is copied and spread across a vast network of computers.
How a blockchain works in four steps
1. Transaction Initiated
2. Verification (Consensus)
2. Verification (Consensus)
A user initiates a transaction (e.g., smart contract milestone met, sending cryptocurrency, recording a supply chain update). This transaction is broadcast to the peer-to-peer network.
2. Verification (Consensus)
2. Verification (Consensus)
2. Verification (Consensus)
Computers (nodes) in the network use the consensus mechanism to verify that the transaction is legitimate (e.g., the sender has the funds, the signature is authentic).
3. Block Creation
4. Block Added to Chain
4. Block Added to Chain
Verified transactions are bundled together into a new block.
4. Block Added to Chain
4. Block Added to Chain
4. Block Added to Chain
Once the network reaches a consensus that the new block is valid, it is added to the end of the chain. Every node updates its copy of the ledger with this new, permanent, and visible record.
Economic and Social Benefits
- Tokenized Finance - Makes traditionally illiquid assets (like real estate or private equity) liquid and accessible to a wider range of investors through fractional ownership.
- Global Payments - Enables cheaper and faster cross-border money transfers, which is highly beneficial for international trade and remittances.
- Digital Identity - Allows individuals to control their own digital identity and credentials (like academic degrees or medical records), sharing them securely and selectively without relying on government or corporate databases.
Stablecoins - Tokenization
What is Tokenization? The Digital Receipt That Proves Real-World Ownership
Assets—from bonds to baseball stadiums—are being converted into secure, programmable digital tokens, enabling fractional ownership and transparent, instant transferability.
Non-Fungible Token or NFT
Imagine a baseball card that is digitally signed and officially registered on the internet forever.
Think UNIQUE (Non-Fungible)
- Fungible (Normal Money): Think of a regular dollar bill or a Bitcoin. If you trade your dollar for my dollar, you still have the exact same value $1 dollar. They are interchangeable.
- Non-Fungible (An NFT): Think of a signed baseball card. If you trade your signed card for my unsigned card, the value is completely different. Your signed card is unique and irreplaceable.
What Exactly Do You Buy?
When you buy an NFT, you are buying a Digital Certificate of Ownership for an asset, like an image, a video clip, or an in-game item.
- The Asset: The digital image or video clip itself.
- The NFT: The unchangeable, verifiable receipt that says, "This specific digital item belongs to this specific person (you)."
This receipt lives on the blockchain (that public, shared digital ledger).
Why Is This Important?
The blockchain solves the biggest problem with digital files: copying.
- The Problem: Anyone can right-click and save a picture you made.
- The NFT Solution: While everyone can have a copy, only one person can own the original NFT—the verifiable, signed receipt from the creator. It's the difference between having a photo of the Mona Lisa and owning the actual painting.
This technology allows digital artists, musicians, and creators to sell original, scarce pieces of their work for the first time.
Tokenization: Turning Assets into Digital Shares
- What it is: The process of converting ownership rights of an asset (like a stadium or a government bond for a new bridge) into a digital token on a blockchain.
- Fractional Ownership: The large asset is broken into thousands of tiny, affordable digital tokens.
Example: Instead of needing millions to invest in a whole stadium, an investor can buy a token representing $100 of its future revenue.
- Global Accessibility: Tokens are bought and sold on a blockchain, instantly opening up investment to anyone worldwide with an internet connection, not just large institutions.
- Increased Liquidity: Traditionally illiquid assets (hard to sell quickly) become easier to trade 24/7 on a secondary market, making the investment more attractive.
- Transparency & Security: All ownership and transaction records are stored on the immutable public ledger (blockchain), reducing fraud and increasing trust in how funds are managed.
- Automated Payouts: Smart contracts (self-executing code) can be programmed to automatically distribute profits (like a share of ticket sales or toll revenue) to token holders, reducing administrative costs.
Stablecoins: The Digital Currency for Transactions
- What it is: A type of cryptocurrency designed to maintain a stable value, usually pegged 1:1 to a fiat currency like the US Dollar (e.g., 1 Stablecoin = $1).
- Medium of Exchange: Stablecoins act as the fast, reliable "cash" used to buy and sell the project tokens.
Why use them? They offer the speed and low cost of crypto transactions without the high volatility of Bitcoin or Ethereum.
- Faster, Cheaper Settlement: Payments for tokens are processed almost instantly (24/7), bypassing slow, costly traditional bank transfers and international settlement processes.
- Real-Time Funding: Governments or venue developers receive funds in stablecoins, which can be used immediately to pay contractors or suppliers who accept digital assets.
Combined Financing Model
- Project Issuer (Government/Sports Team) tokenizes a revenue-generating asset (e.g., future stadium naming rights, toll road revenue bonds).
- Global Investors purchase these digital tokens using Stablecoins.
- The Stablecoins provide the instant, real-time capital for the project construction or operation.
- Smart Contracts automatically monitor the project's revenue and pay out profits (e.g., monthly interest or dividends) back to the investors' wallets in Stablecoins.
What is Web3?
Web3 is the next generation of the internet that is decentralized and owned by its users, not by big tech companies.
Instead of relying on central servers (like Google or Facebook) to store your data and control your access, Web3 applications are built on blockchains and distributed networks.
The core shift is from a system where you are the product (Web2) to one where you are the owner and participant (Web3).
How Web3 Works with Digital Assets
Web3 gives you verifiable ownership over digital assets through tokens.
- True Ownership: In Web2, if you buy a game item, the game company can take it away or shut down your account. In Web3, your digital assets (like a song, a virtual land deed, or a club membership) are represented by tokens (NFTs or cryptocurrencies) held in your personal digital wallet.
- It's in Your Wallet: Your digital wallet is your identity and your bank. It is controlled only by you. Because the token is recorded on the blockchain, only the person with the private key to that wallet can control, sell, or transfer that asset. No central company can confiscate it.
- Smart Contracts: Most interactions run on Smart Contracts—self-executing agreements written in code. For example, a contract can automatically send the artist a royalty every time their tokenized song is resold. This removes the need for banks or lawyers as middlemen.
