Digitation Of Asset

It's important to distinguish a crucial difference when it comes to digitization of an asset. An asset can be:

  • Digitally documented, which involves creating a digital record of the asset from the outset, or

  • Digitized, if it was previously recorded in a non-digital format, this process involves converting the existing non-digital record into a digital form.

It is essential to recognize that there is no method for converting the physical entity of an asset, such as real estate, into a digital record in itself. Even when we create data entries about that property or simulate it in a virtual reality environment with a 1:1 scale, we are merely creating a representation or documentation of the property, not transforming the property itself into a digital form.

Moreover, there currently exists no secure, functional legal method to achieve this, and the widely used practice of 'entity wrapping' is a makeshift solution that presents significant risks and should not be regarded as a safe or definitive answer to the challenge of asset digitization (a topic we will explore in subsequent sections).


It is crucial to understand that a digitized or digitally documented asset is fundamentally distinct from a digital asset. When an asset is digitized or digitally documented, it merely means that information about the physical asset is converted into a digital format for ease of access, storage, or transfer. However, a digital asset is inherently digital by nature; it is created, traded, and used in a digital ecosystem, such as digital art. The digitization or digital documenting process does not change the intrinsic, non-digital nature of a physical asset, whereas a digital asset is born, exists, and functions solely within the digital realm.

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