Crypto and Digital Assets
6 articles
What a blockchain is, who is holding the asset when an exchange does, and how the regulated wrappers differ from the thing they wrap.
Foundations
Start here if the subject is new.What a Blockchain Is
A ledger maintained by many parties at once, where entries are appended in batches and the ordering is agreed by a mechanism rather than by an institution.
Custody and Keys
Whoever controls the private key controls the asset. There is no institution positioned to reverse a transfer, restore access or adjudicate a dispute.
Intermediate
Assumes the foundations above.Platforms and Counterparty Risk
A balance shown on a platform is a claim on that platform. The distinction between a claim and a holding is the subject of most of the sector's failures.
Spot Crypto ETFs
An exchange-traded wrapper holding the asset itself, traded through an ordinary brokerage account. The wrapper changes the custody and the protections, not the underlying volatility.
Stablecoins
Tokens designed to hold a constant value against a currency. What they hold behind them, and who has a claim on it, differs enormously between them.
The Regulatory Position
Which regulator covers a digital asset depends on whether it is a security, and that question has been contested in litigation for years.
Frequently Asked Questions
What is a blockchain?
A blockchain is a shared ledger of transactions, copied across many computers, where new entries are added in linked blocks that are very hard to alter once accepted. It lets parties who do not trust each other agree on who holds what without a central record keeper.
Read the full article: What a Blockchain IsWho holds the crypto when it is bought on an exchange?
Usually the platform does. Coins bought on an exchange are typically held in the platform's own wallets, and the customer holds a claim against the platform. If the platform fails, recovering those assets depends on its structure and its bankruptcy process, which is the counterparty risk that self-custody avoids at the cost of managing keys.
Read the full article: Custody and Keys