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, 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.
The History of Cannabis Prohibition in the U.S.
Cannabis is federally illegal in the U.S., but it wasn’t always that way. Here’s a look at the timeline of cannabis prohibition in the U.S.
The History of Cannabis Prohibition in the U.S.
The legal status of cannabis in the U.S. isn’t always clear. At the federal level, it is an illegal Schedule I drug. However, individual states have the ability to determine their own laws around cannabis sales and usage.
But cannabis was not always illegal at the top level. It was only in the last 100 years that cannabis faced a prohibition similar to the alcohol prohibition of the early 1920s.
In this infographic from Tenacious Labs, we explore the fascinating history of cannabis prohibition in the U.S. dating all the way back to the 1900s.
The Early History of Cannabis Legality
The earliest laws surrounding the cannabis plant in the U.S. were drafted before the country was even founded. In 1619, a law was passed in the colony of Virginia which required every single farm to grow cannabis and produce hemp, an important commodity at the time.
Over time, marijuana from the cannabis plant started to be used for medicinal purposes. Early recreational use was first introduced by Mexican immigrants in the early 1900s.
Flash forward to the 1930s, when the country was struggling financially during the Great Depression. To encourage economic growth, alcohol prohibition was lifted, and those who had supported teetotalling began to target marijuana instead. At the time, cannabis was consumed largely in black and Mexican communities, and racist attitudes began to shape an association between crime, lewd behavior, immorality, and marijuana.
The 1930s marked the beginning of America’s war against marijuana. Here’s a glance at some of the most famous laws around cannabis prohibition:
- The Marihuana Tax Act (1937)
- The Boggs Act (1952)
- The Narcotics Control Act (1956)
- The Controlled Substances Act (1971)
In 1937, the Marihuana Tax Act was enforced, prohibiting marijuana federally but still allowing medical use. Prior to that, 29 states had already outlawed marijuana on their own.
But by the 1950s, a counterculture movement had begun, with young people using marijuana recreationally much more than previous generations.
Eventually, the Boggs Act (1952) and Narcotics Control Act (1956) were put in place to combat the counterculture. These laws set mandatory sentences for drug-related offenses, including marijuana. A first-offense marijuana possession conviction could result in a minimum sentence of 2-10 years with a fine of up to $20,000.
In 1970, cannabis was classified as a Schedule I drug—the same category as heroin—under the Controlled Substances Act. However, the 70s also saw an opposing shift, with a number of states beginning to decriminalize marijuana.
After decriminalization, commercial businesses began to capitalize and started to market marijuana-related products. Some products were marketed towards children, which, in tandem with the intensive hippie culture from the 70s, sparked a war against marijuana led by parents and supported by president Ronald Reagan.
The Modern Era
During the 1990s, five states passed laws to allow the medical usage of marijuana—between 2010 and 2020, 16 states passed medical marijuana laws.
|New Jersey||Adult use|
|New Mexico||Adult use|
|New York||Adult use|
|North Carolina||Medical (Limited)|
|South Carolina||Medical (Limited)|
|Washington, DC||Adult use|
In 2021, a total of 18 states have fully legalized cannabis, while another 26 have allowed marijuana usage for medicinal purposes in some capacity. Furthermore, the MORE Act—a bill to legalize marijuana federally—was reintroduced in the House of Representatives in May 2021.
If passed, the MORE Act (the Marijuana Opportunity Reinvestment and Expungement Act) would essentially remove cannabis from its classification as a Schedule I drug under the Controlled Substances Act. It would also work towards the expungement of criminals who were charged with crimes related to marijuana.
While the U.S. government has gone back and forth with cannabis legalization over the years, it appears that in the 21st century, the path only leads one way: towards federal legalization.
Ocean Economy: The Next Wave of Sustainable Innovation
This graphic explores how the $1.5 trillion ocean economy can help fight against some of the toughest challenges facing the world today.
Ocean Economy: The Next Wave of Sustainable Innovation
Roughly 21–37% of total greenhouse gas (GHG) emissions are attributable to our current food system, which includes conventional agriculture and land use according to the latest IPCC report.
With the global population rising and more mouths to feed, now is the time to reconsider how we can tap into our global resources to build a more sustainable food system.
This infographic from Billy Goat Brands (CSE: GOAT) (“GOAT”) explores how the ocean economy—also referred to as the blue economy—plays a vital role in our fight against climate change and other environmental challenges facing the world today.
What is the Ocean Economy?
The ocean economy is described as the sustainable use of the ocean and its resources for economic development and ocean ecosystem health.
The global economic output of the ocean economy is $1.5 trillion each year. Here is an example of some of the activities and sectors that make up the ocean economy today:
|Harvesting of living marine resources||Fisheries
|Harvesting of non-living marine resources ||Marine biology
Oil & Gas
|Transport and trade||Tourism
Shipping and shipbuilding
|Renewable energy||Renewables (wind, wave, tidal energy)|
|Indirect economic activities||Carbon sequestration
Financing ocean-related economic activities will ensure the future sustainability of this vital resource, and help combat threats that pose a risk to humanity, such as overfishing, pollution, and habitat destruction.
However, some experts say that there is insufficient private and public investment in sustainable ocean economy activities.
The Investment Opportunity
Investors have a unique opportunity to drive change through companies innovating in the ocean economy and be part of the solution.
- The ocean could provide six times more food than it does today.
- Seafood continues to be the fastest growing sector by 2030 with only 60% of fish available for consumption.
- The ocean economy provides a smaller carbon footprint compared to conventional agriculture.
The potential for economic growth will only continue to grow, presenting investors and institutions with a chance to add value at this crucial stage of development while making a real and tangible impact.
In fact, investing $1 in key ocean activities can yield at least $5 in global benefits—a number that will continue to rise over the next 30 years according to a World Resources Institute report.
The report also states that investing between $2 trillion and $3.7 trillion globally across four crucial areas could generate between $8.2 trillion and $22.8 trillion in returns by 2050. These four areas are:
- Restoring mangrove habitats
- Scaling up offshore wind production
- Decarbonizing international shipping
- Increasing the production of sustainably sourced ocean-based proteins
An Ocean of Possibilities on the Horizon
Plant-based alternatives will play an important role in alleviating the pressure on ocean resources, and technological innovation has been pivotal in creating imitation products for the consumer market.
GOAT provides diversified exposure to expansion-stage companies that contribute to the ocean economy through innovative food technologies, functional foods and plant-based alternatives.
“We believe that plant-based seafood alternatives should be available for everyone, everywhere. That’s why we spent years creating a seamless experience that’s nearly indistinguishable from their animal-based counterparts.”
—Mike Woodruff, CEO Sophie’s Kitchen
Sophie’s Kitchen is one of GOAT’s investee companies and a leading California-based manufacturer and distributor of disruptive plant-based seafood alternatives.
Go to billygoatbrands.com to learn more about investing in the ocean economy today.
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