Crypto terminology is complex, so sometimes we have to revisit the basics.
Defining crypto, digital assets and the future of finance Was this newsletter forwarded to you? Sign up here. |
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Welcome to Crypto for Advisors! In this week's newsletter: Last year, when Crypto for Advisors was in its infancy as a newsletter, our team tossed around the idea of featuring a rotating glossary of crypto terms for financial advisors in our edition each week. In today's issue of Crypto for Advisors, Christopher Robbins shares some of the thinking behind that idea. He goes back to the basics and breaks down the definition of terms like 'crypto' and 'digital assets,' making key distinctions. – Henry Bond, newsletter editor |
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Advisors Need to Refine Their Definition of Crypto
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(Susumu Yoshioka/Getty Images) Crypto and digital assets are full of new technological terms and jargon that might be daunting or confusing to advisors and clients. For that reason, having some basic, clear definitions of crypto terms might be helpful when answering client questions and serve as a foundation for an advisor's further incursions into the realm of crypto education. Alas, digital assets are a very busy space, and the idea was quickly abandoned in favor of keeping up with some of the fast-moving news within the crypto for advisors space. It's no coincidence that over the past 12 months the financial services industry has made significant progress in developing technology and processes so that financial advisors can begin to help their clients with a digital assets allocation. Perhaps it's time to revisit the glossary concept. In our first and only entry into it, we talked to Tyrone Ross (then-CEO of Onramp Invest) and Ric Edelman (founder of the Digital Assets Council for Financial Professionals) about some of the more confusing crypto terms for financial advisors, and we found that the problem began at the beginning – what should we be calling these assets? You'll notice in this article I have used crypto, cryptocurrency and digital assets almost interchangeably. Let's go back to the beginning to make sure we all understand what we're talking about here – because while crypto-curious clients have already done this research, many clients will come to advisors with the fundamental questions. Continue reading... – Christopher Robbins |
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How Blocks Are Added to a Blockchain, Explained Simply |
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(iStockphoto/Getty Images) While blockchain is often synonymous with cryptocurrency, the technology has a range of uses across industries. These days you can find blockchains being used to store asset data ranging from real estate purchases to supply chain management in sectors including health care and education.
In all use cases, blockchain functions as a shared, unchangeable digital record of all transactions, called blocks.
A blockchain, also known as Distributed Ledger Technology (DLT), is a decentralized record of transactions that is constantly reviewed and updated. Virtually any asset can be tracked by a blockchain network, though the technology is widely associated with cryptocurrencies like bitcoin (BTC) and ether (ETH), which each have their own associated blockchain network. In the past, transactions were tracked and stored by financial institutions, and auditing that information was often time consuming and limited to certain privileged parties. Blockchain technology makes record keeping transparent and allows it to be shared across networks. No single party can change a transaction after it has been added to the ledger, and automated tools called smart contracts can execute transactions without requiring an intermediary like a bank. Click here to learn how a blockchain works... – Xenia Soares |
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"The rising ratio indicates open interest is outpacing market size and increases the risk of volatility," one researcher said. Buying ether ahead of the Merge is likely an overextended play, one trader said. The new era for mining in the state might look more like a slog than a boom – but it could also be better for the electric grid. The three tokens "may currently be a security, based on the facts as they exist today," Grayscale said in recent, little-noticed filings. At some point you're going to want to spend your bitcoin. But where can you go to exchange it for goods and services? |
Which institutes are most impacting the blockchain world? Tell us your thoughts in a five-minute survey. We're welcoming responses until Sept. 7. Take the survey here. |
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Disclaimer: The information contained in this newsletter, and any information linked through the items contained herein, is not intended to provide sufficient information to form the basis for an investment decision. You should seek additional information regarding the merits and risks of investing in any cryptocurrency or digital assets. |
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