Going Beyond Crypto: Exploring the Digital Asset Ecosystem
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Going Beyond Crypto: Exploring the Digital Asset Ecosystem

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The following content is sponsored by Arca.


digital assets infographic

Exploring the Digital Asset Ecosystem

The digital asset sector has undergone a rapid expansion over the past couple of years, growing in value and functionality.

Beyond the price growth of popular cryptocurrencies, digital assets are powering innovative applications that enable value transfer beyond just payments. From tokens that grant dividend-like revenue to holders, to tokens backed by other digital and physical assets, the digital asset ecosystem is redefining asset and financial structures before our very eyes.

This framework created by Arca explores and defines the state of the digital asset ecosystem, looking at how traditional assets might one day be integrated into this new taxonomy.

The Functions and Types of Digital Assets

Digital assets can be broken down into three different types of assets that fulfill three primary functions. The first two functions of digital assets, store of value and medium of exchange, are well established functions of digital and traditional assets.

However, a third functionality of being able to pass through values to holders has emerged, with benefits like discounted application fees, governance voting rights, and monetary rewards passed onto token holders.

These functions are fulfilled by three main types of digital assets:

  • Currency: tokens that are a unit of account and medium of exchange
  • Asset-backed tokens: tokens backed by hard assets like equity, debt, or physical assets
  • Pass through tokens: tokens that grant revenues, rewards, and network benefits to holders

Many know of Bitcoin, the founding cryptocurrency that functions as a digital currency today. Along with this, tokens whose value is backed by other assets like Arca Lab’s ArCoin (Ticker: RCOIN) are also straightforward in nature and functionality.

Pass through tokens are where digital assets explore innovative concepts and structures unique to the blockchain networks that underpin the assets.

For example, cryptocurrency exchange FTX issued an exchange token (FTT) at launch, which provides holders with reduced trading fees on the platform. FTT holders can also stake, or lock up, their tokens to receive increased referral rebates, more votes in FTX polls, and more airdrop rewards (tokens exclusively given out to holders or stakers of another token).

Classifying Governance and Decentralization

Along with token types and their functionality, it’s important to understand the governing bodies and governance structures behind digital assets.

The governing body is the entity that issues and controls the function of a digital asset, ultimately defining the purpose and proposed value of a digital asset. These range from centralized governments and organizations, like the government of the Bahamas (issuer of the CBDC, the Bahamian Sand Dollar) to Decentralized Autonomous Organizations and blockchain protocols like Ethereum (ETH) and Solana (SOL).

Governing BodyGovernance Structure
GovernmentCentralized
OrganizationsCentralized
IndividualsCentralized
Decentralized Autonomous Organizations (DAOs)Decentralized
Protocols, Platforms, and DappsTypically decentralized

Governance structures define the framework and procedures which decide and implement changes for a digital asset. These changes can be about anything, like the digital asset’s tokenomics, pass through values, or future development goals.

While some governing bodies like governments and organizations have centralized governance structures, centralization and decentralization isn’t all or nothing and can be seen as more of a spectrum.

Certain DAOs or protocols might have a core team of developers that propose certain features, which are then voted on and ultimately decided by the holders of the digital asset.

The Future of Traditional Assets in a Digital Framework

With an established taxonomy of digital assets, we can start to map out how traditional assets fit into this framework.

From tokenizing real estate and commodities for easier digital exchange and settlement to equity-like tokens issued by companies that provide holders with voting rights or non-financial rewards, digital assets will reshape the traditional asset structures of today.

By providing unbound and transparent asset structures, digital assets are providing people around the world with more freedom in storing, transferring, and accruing value.

Go to Ar.ca to learn more about digital assets today.

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The History of U.S. Energy Independence

This infographic traces the history of U.S. energy independence, showing the events that have shaped oil demand and imports over 150 years.

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history of U.S. energy independence

The History of U.S. Energy Independence

Energy independence has long been a part of America’s political history and foreign policy, especially since the 1970s.

Despite long being a leader in energy production, the U.S. has often still relied on oil imports to meet its growing needs. This “energy dependence” left the country and American consumers vulnerable to supply disruptions and oil price shocks.

The above infographic from Surge Battery Metals traces the history of U.S. energy independence, highlighting key events that shaped the country’s import reliance for oil. This is part one of three infographics in the Energy Independence Series.

How the U.S. Became Energy Dependent

Oil was first commercially drilled in the U.S. in 1859, when Colonel Edwin Drake developed an oil well in Titusville, Pennsylvania.

Twenty years later in 1880, the U.S. was responsible for 85% of global crude oil production and refining. But over the next century, the country became increasingly dependent on oil imports.

Here are some key events that affected America’s oil dependence and foreign policy during that time according to the Council on Foreign Relations:

  • 1908: Henry Ford invented the Model T, the world’s first mass-produced and affordable car.
  • 1914-1918: The U.S. began importing small quantities of oil from Mexico to meet the demands of World War I and domestic consumption.
  • 1942: In efforts to save gas and fuel for World War II, the Office of Defense Transportation implemented a national plan limiting driving speeds to 35 miles per hour.
  • 1943: President Roosevelt provided financial support to Saudi Arabia and declared Saudi oil critical to U.S. security.
  • 1950: With 40 million cars on the road, the U.S. became a net importer of oil bringing in around 500,000 barrels per day.
  • 1970: Twentieth century U.S. oil production peaked and President Nixon eased oil import quotas, allowing an additional 100,000 barrels per day in imports.

The U.S. economy’s increasing reliance on oil imports made it vulnerable to supply disruptions. For example, in 1973, in response to the U.S.’ support for Israel, Arab members of the OPEC imposed an embargo on oil exports to Western nations, creating the first “oil shock”. Oil prices nearly quadrupled, and American consumers felt the shock through long lineups at gas stations along with high inflation. Combined with rising unemployment rates and flattening wages, the increase in prices led to a period of stagflation.

Despite the energy crisis, U.S. oil production fell for decades, while the country met its increasing energy needs with oil from abroad.

The Rise and Fall of U.S. Oil Imports

Here’s how U.S. net imports of crude oil and petroleum products has evolved since 1950 in comparison with consumption and production. All figures are in millions of barrels per day (bpd).

YearConsumption (bpd)Production (bpd)Net imports (bpd)
19506.5M5.9M0.5M
19609.8M8.1M1.6M
197014.7M11.7M3.2M
198017.1M10.8M6.4M
199017.0M9.6M7.2M
200019.7M8.7M10.4M
201019.2M9.5M9.4M
202119.8M18.7M-0.2M

Net oil imports quadrupled between 1960 and 1980, marking the two biggest decadal jumps. Given that production was falling while consumption was booming, it’s clear why the U.S. needed to rely on imports.

Imports peaked in 2005, with net imports accounting for a record 60% of domestic consumption. Both imports and consumption fell in the years that followed. In 2009, for the first time since 1970, U.S. oil production increased thanks to the shale boom. It ascended until 2019 to make the U.S. the world’s largest oil producer.

As of 2021, the U.S. was a net exporter of refined petroleum products and hydrocarbon liquids but remained a net importer of crude oil.

The New Era of Energy

Oil and fossil fuels have long played a central role in the global energy mix. The U.S.’ reliance on other countries for oil made it energy-dependent, exposing American gas consumers to geopolitical shocks and volatile oil prices.

Today, the global energy shift away from fossil fuels towards cleaner sources of generation offers a new opportunity to use lessons from the past. By securing the raw materials needed to enable the energy transition, the U.S. can build a clean energy future independent of foreign sources.

In the next part of the Energy Independence Series sponsored by Surge Battery Metals, we will explore the New Era of Energy and the role of electric vehicles and renewables in the ongoing energy transition.

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Ranked: Emissions per Capita of the Top 30 U.S. Investor-Owned Utilities

Roughly 25% of all GHG emissions come from electricity production. See how the top 30 IOUs rank by emissions per capita.

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Emissions per Capita of the Top 30 U.S. Investor-Owned Utilities

Approximately 25% of all U.S. greenhouse gas emissions (GHG) come from electricity generation.

Subsequently, this means investor-owned utilities (IOUs) will have a crucial role to play around carbon reduction initiatives. This is particularly true for the top 30 IOUs, where almost 75% of utility customers get their electricity from.

This infographic from the National Public Utilities Council ranks the largest IOUs by emissions per capita. By accounting for the varying customer bases they serve, we get a more accurate look at their green energy practices. Here’s how they line up.

Per Capita Rankings

The emissions per capita rankings for the top 30 investor-owned utilities have large disparities from one another.

Totals range from a high of 25.8 tons of CO2 per customer annually to a low of 0.5 tons.

UtilityEmissions Per Capita (CO2 tons per year)Total Emissions (M)
TransAlta25.816.3
Vistra22.497.0
OGE Energy21.518.2
AES Corporation19.849.9
Southern Company18.077.8
Evergy14.623.6
Alliant Energy14.414.1
DTE Energy14.229.0
Berkshire Hathaway Energy14.057.2
Entergy13.840.5
WEC Energy13.522.2
Ameren12.831.6
Duke Energy12.096.6
Xcel Energy11.943.3
Dominion Energy11.037.8
Emera11.016.6
PNM Resources10.55.6
PPL Corporation10.428.7
American Electric Power9.250.9
Consumers Energy8.716.1
NRG Energy8.229.8
Florida Power and Light8.041.0
Portland General Electric7.66.9
Fortis Inc.6.112.6
Avangrid5.111.6
PSEG3.99.0
Exelon3.834.0
Consolidated Edison1.66.3
Pacific Gas and Electric0.52.6
Next Era Energy Resources01.1

PNM Resources data is from 2019, all other data is as of 2020

Let’s start by looking at the higher scoring IOUs.

TransAlta

TransAlta emits 25.8 tons of CO2 emissions per customer, the largest of any utility on a per capita basis. Altogether, the company’s 630,000 customers emit 16.3 million metric tons. On a recent earnings call, its management discussed clear intent to phase out coal and grow their renewables mix by doubling their renewables fleet. And so far it appears they’ve been making good on their promise, having shut down the Canadian Highvale coal mine recently.

Vistra

Vistra had the highest total emissions at 97 million tons of CO2 per year and is almost exclusively a coal and gas generator. However, the company announced plans for 60% reductions in CO2 emissions by 2030 and is striving to be carbon neutral by 2050. As the highest total emitter, this transition would make a noticeable impact on total utility emissions if successful.

Currently, based on their 4.3 million customers, Vistra sees per capita emissions of 22.4 tons a year. The utility is a key electricity provider for Texas, ad here’s how their electricity mix compares to that of the state as a whole:

Energy SourceVistraState of Texas
Gas63%52%
Coal29%15%
Nuclear6%9%
Renewables1%24%
Oil1%0%

Despite their ambitious green energy pledges, for now only 1% of Vistra’s electricity comes from renewables compared to 24% for Texas, where wind energy is prospering.

Based on those scores, the average customer from some of the highest emitting utility groups emit about the same as a customer from each of the bottom seven, who clearly have greener energy practices. Let’s take a closer look at emissions for some of the bottom scoring entities.

Utilities With The Greenest Energy Practices

Groups with the lowest carbon emission scores are in many ways leaders on the path towards a greener future.

Exelon

Exelon emits only 3.8 tons of CO2 emissions per capita annually and is one of the top clean power generators across the Americas. In the last decade they’ve reduced their GHG emissions by 18 million metric tons, and have recently teamed up with the state of Illinois through the Clean Energy Jobs Act. Through this, Exelon will receive $700 million in subsidies as it phases out coal and gas plants to meet 2030 and 2045 targets.

Consolidated Edison

Consolidated Edison serves nearly 4 million customers with a large chunk coming from New York state. Altogether, they emit 1.6 tons of CO2 emissions per capita from their electricity generation.

The utility group is making notable strides towards a sustainable future by expanding its renewable projects and testing higher capacity limits. In addition, they are often praised for their financial management and carry the title of dividend aristocrat, having increased their dividend for 47 years and counting. In fact, this is the longest out of any utility company in the S&P 500.

A Sustainable Tomorrow

Altogether, utilities will have a pivotal role to play in decarbonization efforts. This is particularly true for the top 30 U.S. IOUs, who serve millions of Americans.

Ultimately, this means a unique moment for utilities is emerging. As the transition toward cleaner energy continues and various groups push to achieve their goals, all eyes will be on utilities to deliver.

The National Public Utilities Council is the go-to resource to learn how utilities can lead in the path towards decarbonization.

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