DEFINITION of Smart Assets (Cryptocurrency)
Smart assets are unique virtual currency tokens that may represent a tangible real-world asset, or a non-tangible ownership that can be purchased, sold, or exchanged as defined by the rules of smart contracts on the blockchain network.
BREAKING DOWN Smart Assets (Cryptocurrency)
The smart asset may be a virtual representation of a physical asset, like a property or a car, or it may represent virtual goods, like a bitcoin, an equity share, or a patent on a novel product. Each smart asset is associated with a smart contract that governs its usage. (See more: Understanding Smart Contracts.)
For example, if you have a royalty-linked patent on an ebook that you co-authored with a friend and published on an Amazon Kindle-like platform, then all the royalty payments will be automatically calculated and credited to the respective accounts based on the defined smart contract, including the price paid to the Kindle-like platform.
The smart contract may also have defined terms about if and how the authors can sell their royalty smart asset tokens only to a select group of partners, and on what conditions.
Smart assets offer a great degree of autonomy, anonymity, and low-cost of transactions in the P2P blockchain network compared to those in the real world. They are popularly used concepts in many emerging blockchain networks, like NEM.