How to Add Value to Real-World Documents With Authentication

Max Good, senior index research analyst at CoinDesk Indices, contributed writing for this report.

Acknowledgement

We thank our former intern, Zad Mahana, for his expertise and assistance in all aspects of our work on Digital Asset Classification Standard (DACS) and for his help in writing this paper.

Introduction

In December 2021, CoinDesk Indices launched its Digital Asset Classification Standard (DACS) to set the standard for defining the industries of digital assets. Every one of the top 500 digital assets by market capitalization is assigned to an industry, defined by DACS. Then at least one industry is assigned to an industry group and finally at least one industry group is assigned to a sector.

Currently, there are six sectors defined by DACS including Currency, Computing, DeFi (Decentralized Finance), Digitization, Entertainment and Smart Contract Platform. The Digitization sector is the smallest sector in DACS with nine assets representing 0.1% of the digital asset market worth approximately $1.4 billion in market capitalization as of April 30, 2022.

Exhibit 1: CoinDesk Indices DACS

In this paper, we describe the Digitization sector in further detail by discussing its definition, constituents, and significance in the broader digital asset space.

Defining the Digitization sector

Digitization refers to the transformation of publicly verifiable ownership, identity, and immutability enabled by blockchain technology. With the growth of the digital economy and crypto native ecosystems, participants increasingly need a way to express their digital identity to facilitate fast, verifiable and censorship-resistant transactions on the blockchain. Although Digitization is currently the smallest sector in DACS, it has a wide range of use cases, including helping brands establish digital identity, accept crypto payments directly, and allow patients to digitize their medical records to enable faster exchange of information without loss of privacy.

The DACS Glossary defines the Digitization sector as follows:

Digitization refers to the process by which real world documents, contracts, public names, etc. are uploaded to a blockchain for the purpose of transparency, publicly verifiable ownership, and immutability. Proof of ownership, identity and authenticity are all valuable traits that are made possible by blockchain technology.

Industry groups and industries inside the Digitization sector

The Digitization industry is comprised of one industry group. The industry group is also comprised of one industry. As the digital economy grows, it is likely the digitization sector will expand with more industry groups and industries as the use cases become more specialized.

Exhibit 2: Industry Groups under Digitization Sector

CoinDesk Indices, 5/13/2022. Market capitalization data is based on 4/30/2022.

Major assets inside the Digitization sector

There are currently nine assets in the Digitization Sector. The largest three tokens in the sector are: Ethereum Name Service (ENS) 1, Braintrust (BTRST) 2 and MediBloc (MED) 3 representing 28.9%, 22.7% and 13.9% of the sector market capitalization, respectively, as of April 30.

Exhibit 3: Assets Inside the DACS Digitization Sector

Conclusion

The Digitization sector includes projects that enable the digital transformation of real-world documents, contracts, and identities. With blockchain technology, proof of ownership and authenticity can be achieved in a transparent, secure and trustless fashion. Although Digitization is currently the smallest sector in DACS, it is likely to grow with the increasing demand for establishing identities in the digital economy.

References

1. Ethereum Name Service (ENS) allows user to convert an alphanumeric public address to a recognizable domain name on the blockchain. ENS empowers brands to create their digital identity (ex: Adidas.eth, Nike.eth, Puma.eth) to allow for crypto payments. Large social media platforms are also publicly announcing future non-fungible token (NFT) profiles that will be linked to users' Ethereum wallets. Naturally people will want to differentiate and customize their Ethereum address to be identifiable to all their followers and/or customers.

2. Braintrust (BTRST) is the first decentralized marketplace for talent that connects skilled workers with reputable brands looking to hire. Unlike many Web2 talent marketplaces, Braintrust allows workers to keep 100% of their earnings and even rewards users and referrals with the native BTRST token.

3. MediBloc decentralizes identity verification and simplifies the encrypted exchange of medical records. It has a proprietary DID (Decentralized Identifier) protocol that ensures producers of medical data can digitally issue signed credentials from a verified identity so that patients, and other data providers can connect faster.

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