What is a digital asset?

Digital assets are everywhere – regardless of whether they are cryptocurrency or personal photos. Understanding what qualifies as digital assets, how they work, and ways to protect them can help you make the most of everything you own.

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What is a digital asset?

A digital asset is anything that holds or creates value and is stored electronically.

Types of digital assets

Digital assets include a wide range of valuable items, including:

Cryptocurrency

Cryptocurrencies, such as bitcoin and ether, only exist digitally and require a cryptocurrency wallet to use them. A crypto walletwhat’s also intangible is where you store the encryption keys that confirm your identity and provide a link to your cryptocurrency assets. It is important to use a reliable wallet to protect your investments. Otherwise it can be hacked.

Digital documents

Storing documents digitally keeps them safe and easily accessible at any time, which is a lot easier than the hassle of searching through boxes or filing cabinets. Moreover, digital storage can save a lot of physical space.

Business examples of digital documents include contracts, financial data, invoices and files. Personal examples include tax returns, medical records, and loan agreements. You may also want to create digital documents from physical documents, such as birth certificates, passports, statements, titles or deeds.

Multimedia files

Multimedia files, including photos, videos, animations, and audio recordings, are what companies can use for branding and marketing businesses and what individuals use to capture memories or store personal content.

Intellectual property

Intellectual property includes patents, trademarks and copyrights, including industrial designs, logos and music. Intellectual property often has more value than physical assets and deserves careful protection.

Non-fungible tokens

Non-fungible tokens are unique digital items often related to art, music or in-game items. Unlike cryptocurrencies, each NFT is one of a kind and cannot be exchanged for another of the same value.

Why digital assets are important

While digital assets can be useful for individuals by helping them retain valuable content, they are a must-have for businesses. Here are some reasons why:

• Help establish and maintain brand identity

• Streamline processes and increase efficiency

• Increase asset security

• Support collaboration between team members

How to manage digital assets

Managing digital assets requires specialized tools and knowledge of best practices. Here’s an overview of the software tools you need to manage digital assets.

Brand asset management

BAM software helps companies manage assets associated with their brand, such as logos, images and marketing materials, and helps maintain consistent use of the brand across teams and campaigns.

Management of production resources

In industries like film, gaming and animation, PAM software does the heavy lifting when it comes to managing assets during production and assembly. PAM is designed for content that changes frequently. The software enables easy tracking and updates, helping teams stay organized during every phase of a project.

Library resource management

LAM software is designed for assets that do not need to be updated regularly, such as archived files and reference materials. It keeps your assets organized, easy to find and retrieved when they are needed.

Digital Asset Management: Best Practices

Here are seven best practices regarding digital asset management:

• Define clear goals: Start by identifying exactly what you need from a DAM system – whether it’s streamlining workflows, managing brand consistency, or keeping files organized.

• Audit existing assets: Take your time view your current digital assets before setting up a new system to create an organized structure from the start. Sort assets by type, delete outdated files and set categories so everything is easy to find.

• Set user access and permissions: A DAM system can control who can open, edit, and share files. Set user access permissions to ensure that only those who need specific content can see or work on it, keeping your assets secure while still allowing collaboration.

• Consistent naming and metadata: Create simple naming conventions and metadata standards to make files searchable and organized. Plus, add project names, file types, and tags to each file’s metadata so teams can quickly find what they need while maintaining easy tracking.

• Appoint a digital asset manager: To keep the DAM system running organized and efficiently, you need to appoint a Digital Asset Manager. Tasks include organizing files, updating metadata, training team members, and granting access to users.

• Implement security standards: Keep digital assets safe by using security tools such as encryption, firewalls and multi-factor authentication. Add digital rights management (also called DRM) to help protect intellectual property and ensure content complies with copyright regulations.

• Routine DAM updates: Check and update your DAM system regularly to ensure your assets stay organized and relevant. Additionally, perform quarterly audits that allow you to remove outdated content and verify accuracy while keeping only approved assets available for use.

Takeaway meals

Digital assets play an important role in both personal and business environments – from family photos to intellectual property. With the right tools and practices, you can keep your digital assets safe, organized, and accessible.

Frequently asked questions

Here are the answers to some of the most frequently asked questions about digital assets.

• What are some examples of digital assets?

  • Digital assets include cryptocurrency, multimedia files, intellectual property and digital documents.

• What does the IRS consider a digital asset?

  • According to the IRS, it considers digital assets as property and not currency for tax purposes. It defines a digital asset as anything that is stored electronically and can be bought, sold, owned, transferred or traded.

• How do digital assets make money?

  • That’s possible make money with digital assets by creating and selling them, such as an online course, ebook or printable, or by trading them, as in the case of cryptocurrencies or NFTs.

This article originally appeared on GOBankingRates.com: What is a digital asset?