The long tail of intangible assets strengthens the Crypto narrative PlatoBlockchain Data Intelligence. Vertical Search. Ai.

The long tail of intangible assets strengthens the Crypto narrative


INTANGIBLE CRYPTOS

What most people don’t realize is that most companies trading on the S&P 500 drive their value from intangible assets

One of the biggest criticisms that Bitcoin and the associated cryptocurrencies face from the skeptics is that they have no physical presence (intangible). How can something which only exists as a computer code have such value — one BTC costing $38k at the time of writing. It’s even harder for some to believe that cryptos can be used as a monetary exchange mechanism when they can’t see it like paper money.

That may be true for someone who uses cash only for transactions but many of us have already moved to digital transactions with the use of credit cards, debit cards, mobile payments & online banking. In fact, just 8% of the money in the world is printed and minted, the remaining 92% is digital. So the latter argument above doesn’t have a sound footing.

Conventional wisdom dictates that most of the valuable assets are tangible. Real estate, Goods & machinery are some of the examples of tangible assets. And prior to the 1990s, they constituted the major components of a firm’s balance sheet. However, the last three decades have seen a major shift towards intangible assets in the companies represented in the S&P 500.

Consequently, the most valuable assets in the U.S economy are now intangible — with the value being associated with the goodwill of such assets. In Corporate mergers and acquisitions, “Goodwill” is often added to the financial statements to reflect good customer relations, the value of proprietary technology, or a brand name.

As seen in the chart above, approximately 90% of the market value of the S&P 500 now comes from intangible assets (i.e. intellectual property, brands) versus tangible assets (i.e. cash, land, etc). Considering this transition to intangible assets, a value associated with Physical assets alone is a little old school if not overblown.

Digital transformation taking place right now has given us a whole new perspective on how value gets assigned to a new class of crypto assets. The next evolution of Intangible Assets & Intellectual Property is already taking place with Non-fungible tokens (NFTs), providing an opportunity to turn intangible assets into programmable assets on permissionless blockchains.

Porting existing assets that aren’t fully digitized — such as patents, copyrights, or employment contracts as tokens on blockchains creates new possibilities for programmable assets and streamlining efficiencies. And this is just the beginning.

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Source: https://medium.com/open-source-x/the-long-tail-of-intangible-assets-strengthens-the-crypto-narrative-32715fc38684?source=rss——-8—————–cryptocurrency

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