When it comes to digital assets, cryptocurrencies, digital tokens, Bitcoin, etc., many people may feel confused by these terms. However, if we look back at the history of trade and currency usage, understanding these high-tech assets becomes much easier. Moreover, this could be an interesting new investment avenue that is easier to navigate than we think.

Where Does Money Come From?

Many are aware that the use of money as a medium for trade today has evolved from the barter system of the past. It started with people exchanging goods, such as trading vegetables for fish or silk for rice. However, it became inconvenient when dealing with large items or quantities, or when comparing the value of different types of goods. Thus, each country developed its own currency system to serve as a medium for trading goods and services.

What is 'Digital Currency'?

As technology has advanced, all information can now be digitized for easier management without the need for paper records. Consequently, the 'value of money' has also been transformed into digital data, allowing for the normal buying and selling of goods and services. This has led to the development of a new era of 'digital currency' that is universal and flexible in its use over the past decade.

In simple terms, using digital currency, or what we might call cryptocurrency is the evolution of money today, merely shifting from cash transactions.

This represents a set of digital data that reflects the value of the money we possess, enhancing convenience in carrying, transferring, trading, and more, which is more flexible than traditional currency. Just like traditional currencies such as Baht, Dollar, Yuan, Euro, etc., cryptocurrencies also come in various forms, such as Bitcoin and Ethereum.

When Assets in This World Are Not Just 'Money'

Importantly, when we talk about 'assets', it is not limited to currency alone; it also refers to other valuable items such as stocks, bonds, and securities, which can be used for investment returns. Therefore, digital assets today are not just cryptocurrencies; we can also convert valuable assets like real estate, hotels, and factories into 'digital tokens.' According to current Thai law, these can be categorized into two main types:

  1. Investment Tokens (Investment Token) After an asset has been converted into a digital token for investment and offered for sale, investors or token buyers will receive rights to a share of the income or profits from the issuer's business or project. The issuer will specify the rights and conditions from the outset, detailing what investors will receive in terms of shares and benefits from purchasing that type of token. The returns that investors receive will be based on the income stream of that asset.

For example, in the United States, shares of the St. Regis Aspen Resort in Colorado were converted into a token called Aspen Coin. This project was successful and raised up to $18 million (approximately 550 million Baht), allowing token buyers to feel secure knowing they invested in a tangible asset, namely the St. Regis Aspen Resort itself. (* = Regulations in the U.S. allow shares to be converted into tokens, referred to as Security Tokens, which differ from the current regulatory framework in Thailand that does not consider the issuance of tokens in this manner as securities but can be likened to investment tokens under the Digital Asset Business Act B.E. 2561. However, the SEC is also considering changes to the law in this area.)

  1. Utility Tokens (Utility Token) are tokens that provide benefits or quotas for various services to token holders. They can be likened to vouchers or reward points of current businesses. For instance, if a holder has 10 tokens, the token seller may specify that they can be exchanged for 10 bowls of noodles or one night in a hotel room. The advantage of purchasing utility tokens is that it locks in the price of the goods or services we wish to use now or in the future.

Since both 'cryptocurrency' and 'digital tokens' exist in digital data form, they must be stored in highly secure systems that effectively prevent unauthorized access. The system used in digital asset transactions is 'Blockchain', which is highly secure. Once data is recorded, it is very difficult to alter because copies are distributed and stored in multiple locations to prevent any single user from fraudulently changing the data.

Understanding Investment in 'Digital Assets'

Today, we have entered a fully competitive digital world. Everything around us, even ‘assets’, is being developed in the digital realm. It is crucial to open our minds and adapt, which is not as difficult as it seems because investing in digital assets is not entirely new; it is an evolution of currency and investment using modern technology to enhance convenience and open new investment opportunities for everyone interested. If we delve deeper into investing in digital assets, it comprises various factors that maximize benefits for investors because...

1. It opens up investment opportunities for everyone, making it faster and more convenient. Certainly, digital asset transactions in the future will become increasingly easier, possibly easier than buying bonds or trading stocks, as investing in digital assets can be done through smartphone applications available to everyone 24/7 without waiting for the stock market to open.

2. Investors have access to a wider variety of investments that align more closely with their interests. All types of valuable assets, whether real estate, factories, goods and services, or agricultural products, can be converted into digital tokens, allowing investors to access a broader range of investments than traditional capital markets.

3. New investors with limited funds can also invest in digital tokens. As assets are broken down into smaller units in the form of digital tokens with relatively low unit prices, it opens opportunities for the general public to invest in high-value assets that may have been previously inaccessible or difficult to reach.

Digital assets are therefore not difficult but represent a new form of property that we should study and understand its benefits. Furthermore, the new capital market will be condensed into smartphone applications for everyone, especially investing in digital tokens, which will soon be as easy as clicking to buy online.

Opportunities in Finance: Knowledge is Power!

Article by Atthakorn Thongyai, CEO of SE Digital

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