• What are they?
Going by the dictionary "an assets is any property or object of value that one possesses, usually considered as applicable to the payment of one's debts." Liability on the other hand is "someone or something that is a burden to whoever is required to take care of them; an individual or action that exposes others to greater risk." While liabilities are characterized by the financial inconvenience they bring (both as properties or lifestyle), an asset derives its value from rarity, utility and people's perception of it.
Nonetheless assets & liabilities are the core features of economy (which is described as "an effective management of resouces of a community") because a nation can either have one of the two by nature or through managerial capability; speaking of natural deposits or individuals with certain intellectual or physical abilities. Meanwhile, wherever they are been taken care of, mineral and human resources remains the heartbeat of every thriving economy around the globe, and that makes them real assets to their owner countries.
There are several categories of assets and they are almost inseparable from each other as some falls under same group(s). But the context of this serie (whitepaper) beckoned on contrast between fiat money and Bitcoin would cover:
(i) Financial Assets: These are stocks, bonds, mutual funds and other securities that represent ownership or a claim on monetary value.
(ii) Physical Assets: Which are tangible items like real estate, vehicles etc.
(iii) Intangible Assets: These are non-physical such as patents copyrights, trademarks or intellectual property.
(iv) Liquid Assets: Things that can be easily converted into cash without significant loss of value.
(v) Non-Liquid assets: items that are not easily convertible into cash without considerable time and effort, such as real.
On a final note, anything that retains its value for a long period of time is an asset. But due to its lost of buying power to inflation, fiat (paper money) is barely an ideal asset. Though a means of exchange (or procurement of better assets), its continual devaluation makes it a liability to a long-term savings.
See you on the next passage of this episode where we'll discuss more on valuables.
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