Let's consider how assets move through their life cycle. We have learned that assets are created, transformed, and eventually cease to exist. Although life cycle is a very useful concept, these steps seems somewhat limited. Surely there are richer descriptions for the set of steps an asset goes through in its life cycle? The answer is yes! Transactions define a rich, domain-specific vocabulary for describing how assets evolve over time. For example, an insurance policy is requested, refined, signed, delivered, claimed-against, paid-out against, invalidated, or renewed. Each step of this life cycle is a transaction—we're going to talk a lot more about transactions in the next section.

Finally, as with assets, participants can go through a life cycle, described by transactions. So, you might wonder, what is the difference between assets and participants? Well, it really comes down to thinking about form versus function. Just because assets can have a life cycle described by transactions, and likewise participants, does not make them the same thing. In the same way that birds, insects, and bats can fly, they are definitely not related. In a general sense, we think of participants and assets as as resources—they are related only in the most general sense.

That ends our discussion on assets! As we saw towards the end of the topic, transactions are of paramount importance in describing the asset and participant life cycles, so let's now turn to this subject!