Back to basics: digital assets - Storing and selling digital assets

Digital assets can include virtually anything in a digital format to which value can be attributed. Examples of this are digital identities, various formats of digital media, in-game/in-metaverse items and collectibles, cryptocurrencies and non-fungible tokens (NFTs). Below is a brief overview of the options for storing and selling digital assets.

Storing digital assets

• Cloud storage: An effective option is cloud-based storage that can be accessed via multiple devices. Security requires additional consideration, given multiple potential points of failure.
• Cold wallets: The equivalent of putting items in a safe, a cold wallet remains predominantly offline. Cryptocurrencies and NFTs can be stored either in a hardware wallet (similar to an encrypted USB stick) or a paper wallet (i.e., a printed piece of paper recording a private key). This method is considered one of the most secure.
• Hot wallets: These allow for quick and immediate access to cryptocurrencies and NFTs. These can be accessed via desktop, web or mobile applications. Though their connection to the internet does make them very convenient, they are also vulnerable to online attacks.
• Digital vaults: These are specialised services that offer ultra-secure storage options specifically for digital assets. These can include digital media, cryptocurrencies and NFTs. They can be administered by software or through a fiduciary and are an effective and secure way to store and transfer digital assets as part of one’s estate.

Selling digital assets

• Peer-to-peer (P2P): This involves selling digital assets directly to another individual without the use of an intermediary. This could be achieved by using an online platform or by dealing directly with another person.
• Digital marketplaces: These allow for the purchase and sale of various forms of digital assets. This could be through listing items for sale or potentially hosting an auction.
• Exchange platforms: Online exchanges allow individuals to buy and sell digital assets. When dealing with cryptocurrencies, one can use either a centralised (intermediary-based) or decentralised (P2P) marketplace.