A Visual Guide to Investing in the Blockchain Ecosystem
Many technologies are coined as “disruptive”, but only a select few can be considered transformational.
One such technology is blockchain, because it has the potential to permanently change our economic, legal, and political systems.
In this infographic from Global X ETFs, we provide an overview of the entire blockchain ecosystem, and look at some different ways investors can gain access to it.
Blockchain: A Decentralized Network
In its most basic sense, a blockchain is a type of database with several unique properties.
One of these is decentralization, which means no single party has control over the data. To see why this matters, consider a traditional database where users store their data on a central server. The server is ultimately controlled by a single entity with the authority to modify or delete data.
In the event that this authority is compromised, users of the database can be left at great risk. A blockchain, on the other hand, is distributed across many participants in a peer-to-peer network. This means that all users play a role in verifying the integrity of the database, as well as verifying new additions.
Furthermore, blockchains are designed with an append-only structure. This means that users can only A) search and retrieve data from the blockchain; and B) add more data onto the blockchain.
A blockchain is made up of “blocks” which contain three items.
First, there’s the data itself. In the case of Bitcoin, this includes all of the relevant information for a given transaction such as date and quantity. Second is the block’s hash, a unique value that identifies the block and its contents.
For Bitcoin, a hash takes the form of a 64-digit hexadecimal number, though this can be different for other blockchains. The following table provides a simple example of how hashes are generated.
|Input (the block’s data)||Hash function||Hash|
|Car||-->||AW94 42RZ 66TZ|
|The blue car was speeding||-->||85ZU I9Y2 RTH2|
|The red car was speeding||-->||5RT8 U1IY 148H|
On any given blockchain, the hash values will share the same format. Modifying a block’s data will also result in an entirely different hash.
The third and final item is the hash of the previous block, and is what contributes to the “chain” part of blockchain. This feature makes it nearly impossible for someone to tamper with the blockchain’s data, because their copy of the chain would then conflict with all other users.
The Blockchain Ecosystem
Holding cryptocurrency is one way to gain exposure to blockchain, but as companies continue to study it, new use cases are emerging. Here’s an explanation of the four segments of the blockchain ecosystem.
1. Digital Asset Mining
Digital asset mining consists of companies that process transactions on blockchain ledgers, including Bitcoin. Processing transactions is known as “mining” because participants can receive cryptocurrency as compensation.
From an operations perspective, cryptominers are relatively simple when compared to other businesses. The following table lists the components a cryptominer needs.
|Network infrastructure||Equipment that allows a miner to connect to various blockchain networks.|
|Mining computers||These computers run 24/7 to update and verify blockchain ledgers.|
|Internet connection||Cryptominers require an internet connection because blockchains are network-based.|
|HVAC||Mining computers must be kept cool for optimal performance. Some miners will locate in colder parts of the world to minimize costs.|
|Electricity||Electricity is one of the biggest costs for a cryptominer. Many companies locate in countries where electricity is cheap.|
Digital asset mining requires a significant amount of electricity and has sparked debate in recent years over its environmental impact.
2. Blockchain Hardware
Blockchain hardware consists of companies that produce blockchain-related equipment.
This includes graphic processing units (GPUs), which are used in computing applications such as rendering and animation. GPUs were not originally intended for blockchain use (and have been around for much longer), but their high processing speeds makes them suitable for mining.
Today, cryptominers are transitioning to application-specific integrated circuit (ASIC) chips that are solely designed for cryptomining. Using these chips is critical for maximizing hash rate and profitability.
3. Blockchain Transactions
The blockchain transactions category includes companies that operate digital asset trading platforms. The segment is quickly evolving as new and existing businesses enter the space.
|Company (year founded)||Blockchain Involvement|
|Visa (1958)||Visa aims to make cryptocurrency more usable through its crypto-linked credit cards.|
|PayPal (1998)||PayPal’s widely-used platform began offering cryptocurrency trading in 2020.|
|Square (2009)||Square added Bitcoin trading to its Cash App platform in 2018.|
|Coinbase (2012)||Coinbase is America’s largest crypto exchange with over 43 million retail users.|
4. Blockchain Applications & Integration
This segment is the broadest of the four, and includes any software or service that uses blockchain.
In many cases, blockchain can be used to improve our existing industries. Consider IBM Food Trust, a blockchain designed to create a more efficient and sustainable food supply chain.
Blockchain can also be used for more ambitious projects, such as creating a metaverse. While still largely conceptual, a metaverse is a digital world which would be accessed via virtual reality. In it, people would be able to work, play, socialize, and consume media.
These virtual worlds would also need their own economies—something blockchain could play a big role in. It’s reported that several companies, including the recently-named Meta, are investing billions each year in metaverse development.
Introducing: The Global X Blockchain ETF
The Global X Blockchain ETF (Ticker: BKCH) seeks to provide investment results that correspond generally to the price and yield performance, before fees and expenses, of the Solactive Blockchain Index.
|Segment of Solactive Blockchain Index||Index Weight|
|Digital asset mining||47.7%|
|Blockchain & digital asset transactions||24.7%|
|Blockchain & digital asset hardware||13.2%|
|Blockchain & digital asset integrations||4.3%|
Figures rounded. Source: Solactive AG, as of September 30th, 2021.
Investors can use this passively managed solution to gain diversified exposure to the blockchain ecosystem.
A Breakdown of Americans’ Monthly Credit Card Spending
Do you know where your money goes? From travel to gas, we break down Americans’ monthly credit card spending by category.
Americans’ Monthly Credit Card Spending
If you were fortunate enough to keep your job during the pandemic, you probably noticed a financial benefit: you spent less. Amid restrictions, credit card spending on fun activities—like going out for dinner—became less frequent.
Looking ahead, the majority of Americans plan to continue at least one budget change post-pandemic, including eating out less (49%), buying fewer clothes and shoes (41%), and traveling less (37%). Of course, the first step in budgeting is tracking where your money is going.
In the above graphic from Personal Capital, we break down Americans’ monthly credit card spending by category. It’s the first in a three-part series that will explore the spending and saving of Americans.
Behind the Numbers
Credit card spending is based on anonymized data from Personal Capital users, who tend to have a higher-than-average net worth. For this particular subset of users, people had an average net worth of $1.3 million and a median net worth of $405,000. Therefore, the credit card spending amounts may be higher than those of the general U.S. population.
It’s also worth noting that the data reflects credit card spending only. It does not include expenses such as mortgage or rental payments, which are typically paid through other methods.
Credit Card Spending by Category
Here’s a breakdown of monthly credit card spending, based on averaged data from November 2020 to October 2021.
|Category||Monthly Spend||% of Monthly Spend|
Users with no transactions in a particular category were excluded from the average spending amounts. Data is statistically weighted by age to ensure accurate and reliable representation of the total U.S. population, 20 years of age and older.
As border restrictions ease, Americans are spending the most on travel. In fact, 83% of Americans say they are excited to plan a trip in a post-pandemic world. The most popular merchant within travel is Airbnb, followed by airlines such as Delta and United as air travel recovers from its pandemic slump. However, this recovery could be in jeopardy amid fresh concerns over the Omicron variant.
Travel is closely followed by general merchandise, at places like Amazon, Costco, Walmart, and Target. Monthly spending in this category has averaged at $815 over the last year. Of course, this could climb even higher near year-end due to the holiday spending boom typically seen in the U.S. every year.
On the other hand, Americans spend the least on online services (such as Google and Facebook), entertainment, and gas. Though the average monthly spending on gas was the lowest of all categories, it increased by 60% from November 2020 to October 2021. This is likely due to gas being one of the categories hit hardest by inflation, along with increased travel.
Turning Reduced Spending Into Savings
With the swipe of a credit card, it can be easy to underestimate how quickly eating out and online shopping add up. However, by taking a closer look at your credit card spending, you can get a sense of where your money is going.
Like most Americans, you may also decide to carry over at least one budget change post-pandemic. What do Americans want to do with the extra cash? Over half plan to put it towards savings, and 16% aim to contribute more to retirement savings or investments.
In Part 2 of the Americans’ Spending and Saving series, we’ll break down Americans’ financial assets by age.
Copper’s Essential Role in Protecting Public Health
Copper can kill up to 99.9% of bacteria on surfaces within two hours of exposure and slow the spread of diseases.
Copper’s Essential Role in Protecting Public Health
Every day, high-touch surfaces present health risks to people in public spaces, and especially the most vulnerable in healthcare. In fact, of every 100 hospitalized patients at any given time, seven will get at least one healthcare-acquired or “hospital infection”.
With naturally antimicrobial properties, copper can kill up to 99.9% of bacteria on surfaces within two hours of exposure and slow the spread of diseases.
In this infographic from our sponsor Teck, we explore copper’s bacteria-fighting abilities and its crucial role in public health.
How Copper Kills Bacteria
Due to its powerful antimicrobial properties, copper kills bacteria in sequential steps:
- First, copper ions on the surface are recognized by the bacteria as an essential nutrient and enter cell.
- Then, a lethal dose of copper ions interferes with normal cell functions.
- Finally, the copper binds to the enzymes, impeding the cell from breathing, eating, digesting, or creating energy.
This rapid killing mechanism prevents cells from replicating on copper surfaces and significantly reduces the amount of bacteria living on the surface.
Antimicrobial copper is effective against bacteria that causes common diseases like staph infections and E. coli that causes foodborne illness. The metal continuously kills bacteria and never wears out.
Besides bacteria, researchers are currently studying copper’s impacts on the virus that causes COVID-19. A previous study suggested that SARS-CoV-2 was completely destroyed within four hours on copper surfaces, as compared to 24 hours on cardboard, and up to three days on plastic and stainless steel. Pre-pandemic studies also demonstrated copper’s ability to kill other coronaviruses.
The Applications of Antimicrobial Copper
Institutions around the world have already deployed antimicrobial copper solutions relating to hospitals, fitness centers, mass transit systems, schools, professional sports teams, office buildings, restaurants, and more.
To date, antimicrobial copper has been installed in more than 300 healthcare facilities around the world. Taking the reduced costs of shorter patient stay and treatment into consideration, the payback time for installing copper fittings is only two months, according to an independent study by the University of York’s Health Economics Consortium.
In Canada, Teck has worked with its partners to install antimicrobial copper coatings on high-touch surfaces in hospitals, educational buildings and transit.
The Stanley Cup champions Los Angeles Kings have installed antimicrobial copper surfaces in their strength and training facility in California. Furthermore, over 50 water bottle filling stations made from antimicrobial copper can also be found throughout the Hartsfield-Jackson International Airport in Atlanta.
Copper’s Role in Public Health
While many hospitals and other institutions are already using copper fittings, others are still not aware of its impactful properties.
As awareness increases, copper can become a simple but effective material to help control the spread of infections.
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