The value of virtual: Economies are powered by ownership of the intangible

The inherent value of digital assets, such as NFTs and cryptocurrencies, often prompts questions about their worth despite lacking physical form. This article explores this, drawing parallels to the historical precedent of intellectual property.

For centuries, intangible assets have held significant value. The Statute of Anne (1709), establishing copyright law, fundamentally shifted the economic landscape. By granting authors ownership of their work, it spurred innovation and fueled the Enlightenment and Scientific Revolution. This demonstrated that intangible creations could generate substantial economic value, leading to similar legislation globally. China’s strengthened IP protection in the 1990s and 2000s exemplifies the positive correlation between robust IP rights and economic growth.

Philosopher John Locke’s concept of owning one’s labor provides a framework for understanding intangible asset ownership. This applies to intellectual property, data, and data derivatives. The protection of these assets is crucial for incentivizing creation and development across various sectors, especially technology, science, and medicine. The immense value of intangible assets is evident: in 2019, IP-intensive industries contributed 41% to US economic activity, and in 2023, global intangible assets were valued at $62 trillion, dwarfing the market cap of gold.

Blockchain technology offers a solution for managing digital property rights. Unlike centralized systems, blockchain provides secure, decentralized, and cost-effective tracking of ownership and provenance. This is especially relevant in the context of AI, where copyright concerns surrounding AI-generated content are rising. AI’s ability to easily imitate protected works necessitates solutions that ensure fair compensation for creators. Blockchain provides a framework for tracking usage and facilitating royalty payments, addressing these challenges.

The open metaverse, characterized by true digital ownership, leverages blockchain’s capabilities. The principles that drove progress in the past—ownership of intangible assets and the resulting incentives for creation—are now applicable to the digital realm. Animoca Brands’ mission is to facilitate these digital property rights, ensuring creators are fairly compensated for their contributions, including those used to train AI. This extends the legacy of the Statute of Anne, paving the way for a future where digital creativity and economic empowerment are accessible to all.