SEPTEMBER, 202019 Digital Assets are emerging as a key application of blockchain technology and are underpinning significant changes across the metals supply chain. So what are Digital Assets and how will they impact on Metals mining, processing, supply chains, and trading?DIGITAL ASSETSDigital Assets are electronic stores of value, created with blockchain technology, that can be traded securely, cheaply, and efficiently via peer to peer networks. They can be connected to physical artefacts (a kilo of Copper, a proportion of a building), financial instruments (a future contract over zinc, a US Dollar, loyalty points, shares in a company), digital items (an image, a song, 100 Gb of data), access rights (entry to a theme park, access to a video game, entry to a conference) or anything else that has value or generates an income stream. Crypto-currencies like BitCoin, Ethereum, and USD Tether are the best known examples of Digital Assets, but increasingly the category is being expanded to include digital representations of real estate, shares, derivatives, metals, gems, and almost every other type of asset you can imagine.One of the key applications of Digital Assets is to make previously illiquid assets highly liquidthink real-estate, fine art, ore reserves, business data, and almost any class of financial assets. What's more, when assets are digitized, they can be traded globally, sometimes (psudo-) anonymously and without the need for trusted intermediaries/middle-men. Exchanges such as tZero, CezEx promise to make trading Digital Assets easy and fast. This means global, transparent markets can be created for any of these assets that allow them to be traded easily and cheaply without reliance on traditional institutions and intermediaries. Digital Assets generally feature so-called "smart contracts" that encode the rules of exchange into the assets themselves. This allows the assets to determine if they can be transferred, under what circumstances, when and for what cost without the need for human intervention. Just as physical assets are stored in a vault and digital files can be stored at home on a hard drive or cloud-drive, Digital Assets are stored in a "wallet" which is a secure application that uses cryptographic methods to secure the assets. Wallets can be in software, even in the cloud, or in hardware, in which case the hardware wallet can be stored in a safe or other secure location. The analogy to having cash in a physical wallet or a 100g gold ingot in your safety deposit box is very close. If the passwords are lost, the software and files get erased or the hardware wallet is damaged beyond usability, the assets are gone. At least Digital HOW DIGITAL ASSETS ARE TRANSFORMING THE MINING AND METALS MARKETSBY JEREMY SAMUEL, CEO, METALICOINCIOINSIGHTS
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