Can digital assets become "reporting" assets?

The first digital computer ENIAC was born in 1946. Different from analog computers, digital computers store and process data in the form of 01 binary digits, thus opening the digital age of human society. More than 20 years later, in 1968, the Internet was born. The Internet has pushed the digital age one step forward, and human society has entered the increasingly digital Internet age. With the continuous deepening of the commercial application of the Internet and the rapid development of e-commerce, human society has entered the era of the Internet economy (some people also call the Internet economy the digital economy, that is, digital economy 1.0). After entering the 21st century, with the increasing commercialization of technologies such as artificial intelligence, blockchain, cloud computing, big data, and the Internet of Things, human society has officially entered the era of digital economy. Compared with the era of agricultural society and industrial society, the biggest feature of the era of digital economy is that "data" is juxtaposed with traditional production factors such as land and capital, and has become an independent production factor. Factors of production such as land and capital belong to the category of economics. In the category of financial accounting, they are reflected in fixed assets such as land use rights, machinery and equipment, and factory buildings on the balance sheet of enterprises. Then, as an independent factor of production, can data enter the balance sheet of the enterprise? Intuitively, data seems to be listed on the left side (assets) of a company's balance sheet as an asset, like land use rights. In fact, data is only a kind of digital asset, and the aforementioned problem can also be upgraded to the question of whether digital assets can enter the enterprise's balance sheet. Here, we start with digital assets. Digital assets, taken apart, are "digital" + "assets". "Number" is the expression form of "asset", and "asset" is the specific content-ethexc to be expressed. As a form of "digital", we believe that it is more accurate to understand it as a "digital signal". The so-called "digital signal" is a concept opposite to "analog signal" in electronics. Simple understanding, "digital signal" is a signal encoded in binary, binary only has two states of 0 and 1, non-zero is 1, there is no transition in the middle, so it is intermittent, that is to say, "digital signal" is discrete. Silvergate Bank CEO: Holding more cash and securities related to digital assets: Jinse Finance reported that crypto-friendly bank Silvergate Bank issued a letter from CEO Alan Lane, assuring shareholders of its due diligence practices, risk management and reserves. The letter states that, in accordance with our risk management policies and procedures and requirements, Silvergate performed significant due diligence on FTX and its related entities, including Alameda Research, including the onboarding process and ongoing monitoring, and, as I have previously indicated, if When we detect unexpected or unusual activity in any account, we investigate and, if required, confidentially file Suspicious Activity Reports in accordance with federal regulations. In addition, we intentionally hold cash and securities in excess of deposit liabilities associated with digital assets. Jinse Finance previously reported that some media accused Silvergate of colluding in the transfer of client assets between two of its clients, FTX and Alameda Research. [2022/12/6 21:24:48] On the contrary, "analog signal" can be understood as a signal expressed in terms of amplitude, etc. For example, if 150 volts is used to represent the value 150, if you want to represent the number 155, you need to use 155 volts (of course, engineering practice is not so simple). It can be seen that the "analog signal" is continuous, not just two states. To put it so simply, it can be seen that the difference between "digital signal" and "analog signal" is quite large. The former only expresses specific content-ethexc in two states of 0 and 1, while the latter expresses specific content-ethexc in a continuously changing range. It is precisely because of this difference that the advantages and disadvantages of the two are determined. The biggest advantage and disadvantage is that the "digital signal" has a strong anti-interference ability. To give a simple example, we can express 1 with 5 volts, and 0 with 0 volts. Even if the 5 volts becomes 4 volts or even 3 volts due to external interference, it is still different from 0 volts. We can still think that This signal is 1. This is not the case for analog signals. When 5 volts is used to represent 5, when it becomes 4 volts due to external interference, it is considered to be 4, and the signal is therefore distorted. Looking back, digital assets are represented in the form of "digital signals", that is, in binary form. In other words, digital assets are assets expressed in binary form. Digital asset manager Kunji completes seed round financing: On August 2, digital asset manager Kunji announced the completion of seed round financing, but the financing amount and investor information were not disclosed, only a group of private investors and angel investors participated in the investment . Kunji creates a cryptocurrency investment pool (DAP-Digital Asset Pool) for investors. Its dashboard function can view the list of investment pools, which will display information such as investment strategies, risks, and historical performance of pool returns. Investors can choose one after judgment and analysis. or multiple pools to invest in. (Yourstory) [2022/8/2 2:53:13] So, what is an asset? Our country's "Enterprise Accounting Standards - Basic Standards" believes that "assets refer to the resources formed by the past transactions or events of the enterprise, owned or controlled by the enterprise, and expected to bring economic benefits to the enterprise." This concept is too narrow. Therefore, let’s put aside the provisions of accounting standards and refer to the definition of property in civil law, and understand assets as physical objects or economic rights that exist outside the person, can meet the needs of people’s social life, and are controlled or dominated by human beings. From this definition, assets need to meet four conditions: first, they must exist outside the person, and the person itself cannot become an asset. Second, it can meet the needs of people's social life. If it cannot meet the needs of social life, it will lose its usefulness, and it will be difficult to bring value to people, and it cannot be called an asset. Third, it must be able to be controlled or dominated by human power. If it cannot be controlled or dominated by human resources, it cannot be called an asset. For example, the sun exists outside the human body and can meet the needs of people's social life, but it cannot be controlled or dominated by human beings, so it cannot be called an asset. Fourth, it must be a physical object or economic right. If the first three conditions are met, if it is a tangible thing, it is a "thing" regulated by my country's "Civil Code - Property Rights", otherwise, it is an object with economic interests in Chapter 5 "Civil Rights" of the "Civil Code". other related rights. The U.S. Congress will hold a hearing entitled "The Future of Digital Asset Regulation" on June 23: Golden Financial News, the U.S. House of Representatives Agriculture Committee Commodity Exchange, Energy and Credit Subcommittee is preparing to hold a hearing on June 23 entitled "Digital Asset Regulation" future" hearings. [2022/6/15 4:27:29] In summary, we can understand digital assets as tangible objects that exist outside the human body, can meet the needs of people’s social life, and are controlled or dominated by human beings. or economic rights. Representation refers to the fact that it does not exist in binary form (such as objects), but after digital processing, it can be represented in binary form. Existence means that it exists in binary form from the beginning of production, without the need for digital processing. From the concept of digital assets, we can see that they can be generally divided into two categories: one is the physical object represented by the binary form, and the other is the economic right represented by the binary form or existence. Now some digital asset exchanges digitize works of art through binary codes for trading. At this time, digital assets are tangible objects represented in binary form. The types of economic rights that exist in binary form are also quite rich. For example, the deposits you deposit in the bank and the funds on the bank card, on the one hand, these deposits and funds are our claims on the bank, which is an economic right. On the other hand, these deposits and funds exist in binary form. Therefore, it is an economic right that exists in binary form. Of course, the data discussed above also exist mostly in binary form, which also exists outside the human body, can meet the needs of people’s social life, can also be controlled by human beings, and can also exist as some kind of economic rights. Therefore, it is also a digital asset. In short, digital assets are physical objects or economic rights that are represented or exist in binary form. Next, let’s go back to our topic and see what conditions need to be met for digital assets to enter the balance sheet. Taurus Taurus, a Swiss compliant digital asset institution, successfully integrated the Cardano chain: Jinse Finance reported that the Cardano Foundation officially stated on Twitter that Taurus Taurus, a Swiss compliant digital asset institution, successfully integrated the Cardano chain, including on its institutional-level platform. Betting function. Frederik Gregaard, CEO of the Cardano Foundation, said: De-risking decentralization for regulators and other institutions is of the utmost importance to the Cardano Foundation. [2021/9/15 23:25:37] As mentioned earlier, the "Accounting Standards for Business Enterprises-Basic Standards" defines assets as "what is formed by the past transactions or events of the enterprise, is owned or controlled by the enterprise, and is expected to bring economic benefits to the enterprise. Resources that come from economic benefits." Here, let's look at the asset composition conditions in accounting. First, it is formed by the past transactions or events of the enterprise. For example, if an office building is purchased, the asset of the office building is formed by the previous "purchase" transaction; while a real estate company builds an office building by itself, it is formed by past events. In the case of digital assets, they may also be formed from past transactions or events of the business. Second, owned or controlled by the business. This condition is quite controlled or dominated by the aforementioned human power. Of course it is easy to understand. How do you understand control? For example, although the fixed assets leased by the enterprise through financial leasing are not owned by the enterprise, this fixed asset has been used by the enterprise for most of the time or consumed most of its value. In fact, it is not much different from self-owned assets. The over-form principle is also considered an asset of the business. Third, the expectation will bring economic benefits to the enterprise. This condition is roughly equivalent to meeting the needs of people's social life mentioned above, but it is more targeted and brings economic benefits to enterprises rather than society. Overall, according to the "Accounting Standards for Business Enterprises-Basic Standards", for digital assets to enter the balance sheet, the aforementioned three conditions must first be met. In addition, according to the "Accounting Standards for Business Enterprises-Basic Standards", two conditions need to be met: (1) the economic benefits related to the resource are likely to flow into the enterprise; (2) the cost or value of the resource can be reliably measure. WBF Exchange is about to launch EPC to realize cross-chain transactions between mainstream digital assets: According to official news, WBF Exchange will soon launch EPC and launch EPC/DUSD trading pairs in the open zone. It is understood that EP (Everything Is Possible) is a distributed cloud storage service platform that is anti-censorship, anti-monitoring, and never shuts down by activating idle devices. EP optimizes the consensus mechanism on the basis of PoC to build a public chain, improves the transaction throughput and transaction speed of EP through the unique side chain extension method, and uses the smart contract double isolation witness to ensure its transaction security, and builds a full-asset terminal wallet Realize cross-chain transactions between mainstream digital assets. [2020/5/9] The so-called "economic benefits related to the resource are likely to flow into the enterprise", that is to say, the possibility of the economic benefits generated by the resource flowing into the enterprise is very high, to what extent, more than 51%. For example, if the company that pays the accounts receivable has gone bankrupt and the possibility of its economic benefits flowing into the company is very small, it can no longer be considered as an asset. As far as digital assets are concerned, this condition also needs to be met. To give another example, an enterprise collects some data not for its own use, which has certain value, but cannot be realized due to the lack of a safe, reliable and legal trading place, so the possibility of its economic benefits flowing into the enterprise is very small. In this way, "the economic benefits related to this resource are likely to flow into the enterprise" cannot be satisfied, so it is difficult to enter the balance sheet. The so-called "the cost or value of the resource can be reliably measured" means that the price of the resource can be determined, and the method of determining the price is scientific, tenable, and reliable, and it does not come from the "black market" or It stems from patting the head at will. As far as digital assets are concerned, whether their cost or value can be reliably measured requires specific analysis. According to the "Accounting Standards for Business Enterprises-Basic Standards", can all digital assets be entered into the balance sheet? As mentioned earlier, digital assets are physical objects or economic rights that are represented or exist in binary form. According to this definition, we can divide digital assets into different types from different angles. Here, we first divide digital assets into two categories. First, for physical objects (such as real estate, vehicles, machinery and equipment). Tangible objects have physical counterparts and cannot directly exist in binary form, so they can only be represented in binary form. They are derived from tangible objects after digital processing, which can be called derivative digital assets. Second, for economic rights (such as land use rights, artworks, bank deposits, user card data). Some economic rights have physical counterparts, but economic rights describe the content-ethexc of their physical counterparts, not the physical counterparts themselves. For example, works of art have physical counterparts, but the copyrights related to works of art describe their specific content. This is also the case for land use rights. For economic rights with physical counterparts, they usually need to be digitized before they can obtain binary representations. Therefore, it is also a derivative digital asset. On the contrary, some economic rights are born in binary form, such as computer programs developed by programmers in a software development environment, and manuscripts written by writers using WPS, which exist in binary form from the beginning. In addition, assets such as bank deposits and user credit card data also exist in binary form from the beginning. We call it native digital assets. In short, we can divide digital assets into derivative digital assets and original digital assets. Let's take a look at whether these two types of digital assets can enter the balance sheet. Derivative digital assets are formed after digitization of existing physical objects or economic rights. Whether such digital assets can enter the balance sheet depends on the tangible or economic rights before digitization. For example, in order to enter a digital asset exchange for transactions, companies digitize their inventory into binary form to form digital assets. Since the inventory can enter the balance sheet, the digital assets of the inventory after digitization can also enter the balance sheet. Another example is that in order to enter the digital asset exchange for transactions, the company converts its patent rights or trademark rights into digital assets through binary coding. Likewise, because patents and trademarks were already available on the balance sheet before digitization. After being digitized into digital assets, it can also enter the balance sheet.

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