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The Future of the Digital Asset – and the Importance of Security

Technology is the leading factor in modern societal development, as new devices and systems enable us to communicate with one another, engage with our work and learn more than ever before. Smartphone usage in the UK is near complete saturation in the UK, with 53.6 million users nationwide.

As certain technologies become mainstream, new technologies enter from the fringes. The digital asset is not a new technology per se but does today describe something with huge potential future value.

What is a Digital Asset?

The term ‘digital asset’ has a simple, yet broad, definition; it describes digital items or objects that hold or provide value. We engage with thousands upon thousands of digital assets every day, from the app icons on our smartphone home screen to the media we stream and the photos we share. Digital assets can also be more abstract, in the form of user accounts we use to save the information and navigate certain digital environments.

The ubiquity of digital assets renders the determination somewhat redundant – but a new field of the digital asset has emerged in recent years, forming something of a second, more specific definition. The advancement of blockchain technology beyond the basis for cryptocurrency has spawned a new industry of digital assets with tangible financial value.

Blockchain technology, otherwise known as Distributed Ledger Technology or DLT, describes a peer-to-peer, node-based ledger system by which transactions and movements are logged immutably. Blockchain is decentralised, devolved and fundamentally secure, and is being used as the foundation for digital assets with real-world rarity. 

The Future of Digital Assets

These rare or one-of-a-kind digital assets are known as NFTs or non-fungible tokens. Where conventional digital assets can be copied and distributed with ease, DLT incorporates proof of ownership in the same way provenance is provided for artworks and artefacts; this way, ownership of a specific asset can be assigned and proven.

This has been tested thoroughly in the public sphere through the auctioning of one-off NFT artworks but also has promising applications in several businesses and industries. For example, the ‘smart contract’ functionality of DLT means businesses can incorporate crypto technology in the confidential sharing of assets and documentation between executives or partners. 

Fraud, Misuse and Asset Security

But the incorporation of new technology always brings new risks into any business or enterprise, in the form of new variables and unknown quantities. While the ledgers themselves are immutable, there are weak links on either side of the blockchain that could be exploited by scammers or fraudsters. There have already been instances of theft wherein legitimate services and destination wallets are spoofed by fraudsters.

The solution, as far as DLT-based digital assets are concerned, is training. Staff and clients alike need to understand the process, and understand its pitfalls. Knowing what could constitute a phishing scam is more than half the battle.

Review The Future of the Digital Asset – and the Importance of Security.

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