As the world becomes increasingly digital, there is a growing belief that it will also become increasingly virtual. One of the most discussed topics in this regard is whether digital assets will ever surpass physical ones in terms of value. The answer to this question is not straightforward—or, at least, not yet.
Physical Assets
Physical assets are tangible. They have a physical form, and they can be touched or seen. They are also limited in supply and therefore cannot be reproduced at will by anyone who wants them (although there may be ways to make more of them). This means that if you have one, nobody else can get it from you because nobody else has it either.Physical assets can be stored in different places: your house, a bank vault, under your bed... The list is near endless! You could even hide some diamonds somewhere so no one would find them ever again.
Digital Assets
Digital assets are intangible, and they are easily duplicated and transferred across the world in an instant. They can be stored in a way that is not easily stolen; they can also be tracked, verified and authenticated through third-party services like Chainlink.There are many reasons why digital assets might seem more valuable than physical assets:
- Digital assets don't require expensive storage facilities or security guards to protect them—they exist online, in a database or file system that is guaranteed by the network on which it lives.
- Digital data doesn't break down over time like physical objects do; it maintains its value indefinitely as long as you have access to it (for example, your Bitcoin keys).
Scarcity Vs. Abundance
The digital versus physical asset debate is at a critical point. The question of whether digital assets will ever be more valuable than physical assets will soon be decided by the market.In order to answer this question, you have to first understand what makes up an asset class and how it can be classified. An asset class is defined as “a group of securities that have similar characteristics and behave similarly in the marketplace." In other words, an asset class represents a specific type of investment with its own set of risks and rewards.
Because we live in such an abundant world full of resources, we tend to define abundance as something that is readily available for use or consumption (or both).
While this may seem like a lazy definition at first glance—and even though there are plenty of exceptions where scarcity could mean abundance under certain conditions—it does hold true for most things we encounter in our everyday lives: food is abundant; air pollution is scarce; water scarcity affects many regions around the world but not others; landfills exist because humans produce too much waste; etcetera...
But There's A Catch…
Physical assets are still more valuable than their digital counterparts. Although the value of an asset is subjective, it can be defined as the price that you would be willing to pay for yourself or others to buy it at a future date.In other words, if someone offered you $500 today for your car (maybe that old jalopy with the broken back window), would you say yes? If so, then congratulations: Your car has a high value to you! But what if someone offered you $100? Chances are pretty good that even though this offer might make sense financially speaking (the car costs more than $100), your emotional attachment would prevent any sale from happening—and rightfully so!
Physical assets have had centuries of use in everyday life and no one knows this better than the owners themselves: They feel like they own part of history when they show off their prized possessions. Their items may not always have been worth much but over time people have learned how valuable certain physical things can become as they've gained popularity in society through common usage as well as collector demand—think Beanie Babies®™ or comic books from decades past.
What Is Valuable?
The concept of value is subjective and can change over time. It's dependent on the needs of the individual, group or society. In addition to this, value is also influenced by the economic situation at hand.The value of an asset can be affected by its scarcity rate, which is impacted by how much of an asset there is in circulation versus how many people need it.
The more limited an item is, the more valuable it becomes. If everyone has access to an item and there isn't enough demand for it anymore, then that item will become less valuable as well - even if its original cost was high.
In today's world where everything seems so easy to obtain with just a few clicks on your phone screen; having something physical can make a big difference when trying to impress someone with status symbols like watches or jewelry...or even art pieces you've made yourself (like paintings).
For example: “if your friend wants some ice cream but all he has are dollar bills in his pocket," said artist Eric McHenry during one interview about his work titled "Value Is Subjective."
While digital assets have no physical form and can be stored in limitless locations, they do not hold much in intrinsic value from an objective perspective– unlike physical assets. Physical assets are finite, so there is only a certain amount of them in existence. This scarcity gives them an intrinsic value.
In Conclusion
It is unlikely that the value of digital assets will surpass the value of physical assets in any substantial way. However, as we move into a digital age, it is important to understand the characteristics of both types of assets so that we can better assess their worth and make informed decisions about what kind of investment is right for us.
Thanks For Reading!
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