How do you discuss, let alone regulate, crypto, if you can’t clearly define it? As the crypto experiment surges on, it eviscerates existing categorizations, because it sprawls across boxes, not quite fitting into any single one, occupying several at the same time, or distorting them into new, puzzling shapes.

Even that catch-all term, crypto, is inadequate since it now contains so many different items. This is acknowledged by some people in crypto who maintain that they are not in crypto at all. You might notice this, especially among dedicated Bitcoiners who insist absolutely that bitcoin is not crypto.

In which case, what is Bitcoin, what is Ethereum, and what are the components that people are referring to when they talk, broad brush, about crypto?

Currencies and Commodities

Bitcoin is often referred to as digital gold, so is it a commodity, like regular gold? In the US, the SEC and CFTC seem to believe so, even though Bitcoin is very different to traditional commodities. It certainly isn’t a material used to make anything, but part of Bitcoin’s similarity to gold lies in its scarcity, which makes it valuable.

That said, scarcity in itself doesn’t automatically equate to worth, meaning Bitcoin is valuable because enough people have tacitly agreed that it should be.

Perhaps Bitcoin’s price tag comes from the fact that it can, potentially, function as an efficient revolutionary method for storing value.

That, though, would form a curious loop: value derived from the capacity to be valuable. Or can we simply classify Bitcoin as a currency? Bitcoin as money makes intuitive sense, and let’s not forget that the gold to which it is compared was utilized as a currency in the past.

Unlike standard currencies, Bitcoin is volatile, and many holders will not yet put it to work for payments
Payments

One of the bases of mediums of exchange in the modern world, a payment constitutes the transfer of a legal currency or equivalent from one party in exchange for goods or services to another entity. The payments industry has become a fixture of modern commerce, though the players involved and means of exchange have dramatically shifted over time.In particular, a party making a payment is referred to as a payer, with the payee reflecting the individual or entity receiving the payment. Most commonly the basis of exchange involves fiat currency or legal tender, be it in the form of cash, credit or bank transfers, debit, or checks. While typically associated with cash transfers, payments can also be made in anything of perceived value, be it stock or bartering – though this is far more limited today than it has been in the past.The Largest Players in the Payments IndustryFor most individuals, the payments industry is dominated currently by card companies such as Visa or Mastercard, which facilitate the use of credit or debit expenditures. More recently, this industry has seen the rise of Peer-to-Peer (P2P) payments services, which have gained tremendous traction in Europe, the United States, and Asia, among other continents.One of the biggest parameters for payments is timing, which looms as a crucial element for execution. By this metric, consumer demand incentivizes technology that prioritizes the fastest payment execution.This can help explain the preference for debit and credit payments overtaking check or money orders, which in previous decades were much more commonly utilized. A multi-billion-dollar industry, the payments space has seen some of the most innovation and advances in recent years as companies look to push contactless technology with faster execution times.

One of the bases of mediums of exchange in the modern world, a payment constitutes the transfer of a legal currency or equivalent from one party in exchange for goods or services to another entity. The payments industry has become a fixture of modern commerce, though the players involved and means of exchange have dramatically shifted over time.In particular, a party making a payment is referred to as a payer, with the payee reflecting the individual or entity receiving the payment. Most commonly the basis of exchange involves fiat currency or legal tender, be it in the form of cash, credit or bank transfers, debit, or checks. While typically associated with cash transfers, payments can also be made in anything of perceived value, be it stock or bartering – though this is far more limited today than it has been in the past.The Largest Players in the Payments IndustryFor most individuals, the payments industry is dominated currently by card companies such as Visa or Mastercard, which facilitate the use of credit or debit expenditures. More recently, this industry has seen the rise of Peer-to-Peer (P2P) payments services, which have gained tremendous traction in Europe, the United States, and Asia, among other continents.One of the biggest parameters for payments is timing, which looms as a crucial element for execution. By this metric, consumer demand incentivizes technology that prioritizes the fastest payment execution.This can help explain the preference for debit and credit payments overtaking check or money orders, which in previous decades were much more commonly utilized. A multi-billion-dollar industry, the payments space has seen some of the most innovation and advances in recent years as companies look to push contactless technology with faster execution times.
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since it has tended to rise so much in value against fiat currencies, but nonetheless, Bitcoin could certainly be a still-stabilizing future currency.

How about Ethereum?

The cryptocurrency of the Ethereum network, Ether, is often used to purchase digital items, NFTs (which are themselves a crypto sub-category), so is Ether a currency? Go to an NFT marketplace where JPEG-based artwork and auctions are priced in Ether, and it certainly looks that way.

But, Ether also acts as a kind of fuel for the Ethereum network, utilized to enable computations on the blockchain. In fact, these costs, which incur with every transaction, are referred to as gas fees (and can be notoriously high), creating the perception that Ether is an exotic digital substance, integral to the mechanical functioning of the network.

All of which could, arguably, shunt Ether into the commodities box, or a digital commodities box, and as is the case with Bitcoin, the CFTC has indicated that Ether should be treated as a commodity.

By this reckoning, Ether emerges as another currency/commodity hybrid. Although to add to the confusion, Ether was sold in an ICO, raising the BTC equivalent of around $18.3 million back in 2014, which you could be forgiven for thinking made it resemble a security.

Digital Artifacts

Are some kinds of crypto simply digital items, artifacts and collectibles? In the case of NFTs, that appears to be the case, as we have artists selling their work as NFTs, and collectors picking them up.

Do those collectors expect their buys to gain in value? Some do, and there are now platforms facilitating the trade of NFTs as if they were fungible crypto tokens, and a nascent sub-sector working on NFT-centered financial products.

On the other hand, there are collectors who are buying NFTs with the same mindset as traditional art collectors buying paintings, there are online NFT art galleries, and there are highly creative artistic collectives emerging around NFTs, not to mention established, traditional artists and brands releasing NFT collections.

One distinguishing feature of NFTs is that, unless the artwork is fully on-chain (which happens but is less common), then an NFT is simply a pointer to a file, somewhere online, containing the digitally rendered artwork.

Still, though, although the NFT itself may not actually be or contain the artwork, it is a token of ownership and provenance, with the caveat that the artwork referred to exists digitally, and will not be delivered in a truck and hung on a wall.

That said, NFTs can be used to trade physical items, and purchasing an NFT may unlock, for example, physical merchandise, services and access to real-life events.

Here, then, NFTs can function as tickets and receipts, in addition to being digital collectibles. But, at the same time, they are tokens issued on blockchains, falling squarely under the crypto umbrella.

Computer Programs

Many cryptocurrency networks are capable of running smart contracts, which essentially means computer programs that execute under certain conditions. In this case, crypto is referring to programmable tokens, or perhaps even to the programs themselves, with the tokens as containers.

We could refer to this as programmable currency, but such facilities don’t have to remain limited to currency uses. If some blockchains are to function primarily as decentralized computers, then some tokens can be thought of as the programs running on those computers.

This brings us back, again, to Ethereum, which is the prime example of such a blockchain, and so we have another possible classification for Ether to absorb.

As crypto continues to expand, we can expect to see its use cases diverge, and attempts at definition become increasingly strained. When it comes to regulation
Regulation

Like any other industry with a high net worth, the financial services industry is tightly regulated to help curb illicit behavior and manipulation. Each asset class has its own set of protocols put in place to combat their respective forms of abuse.In the foreign exchange space, regulation is assumed by authorities in multiple jurisdictions, though ultimately lacking a binding international order. Who are the Industry’s Leading Regulators?Regulators such as the UK’s Financial Conduct Authority (FCA), the US’ Securities and Exchange Commission (SEC), Australian Security and Investment Commission (ASIC), and the Cyprus Securities and Exchange Commission (CySEC) are the most widely dealt with authorities in the FX industry.In its most basic sense, regulators help ensure the filing of reports and transmission of data to help police and monitor activity by brokers. Regulators also serve as a countermeasure against market abuse and malpractice by brokers. Brokers adhering to a list of mandated rules are authorized to provide investment activities in a given jurisdiction. By extension, many unauthorized or unregulated entities will also seek to market their services illegally or function as a clone of a regulated operation.Regulators are essential in snuffing out these scam operations as they prevent significant risks for investors.In terms of reporting, brokers are also required to regularly file reports about their clients’ positions to the relevant regulatory authorities. The most-recent regulatory push in the aftermath of the Great Financial Crisis of 2008 has delivered a material shift in the regulatory reporting landscape.Brokers typically outsource the reporting to other companies which are connecting the trade repositories used by regulators to the broker’s systems and are handling this crucial element of compliance.Beyond FX, regulators help reconcile all matters of oversight and are watchdogs for each industry. With ever-changing information and protocols, regulators are always working to promote fairer and more transparent business practices from brokers or exchanges.

Like any other industry with a high net worth, the financial services industry is tightly regulated to help curb illicit behavior and manipulation. Each asset class has its own set of protocols put in place to combat their respective forms of abuse.In the foreign exchange space, regulation is assumed by authorities in multiple jurisdictions, though ultimately lacking a binding international order. Who are the Industry’s Leading Regulators?Regulators such as the UK’s Financial Conduct Authority (FCA), the US’ Securities and Exchange Commission (SEC), Australian Security and Investment Commission (ASIC), and the Cyprus Securities and Exchange Commission (CySEC) are the most widely dealt with authorities in the FX industry.In its most basic sense, regulators help ensure the filing of reports and transmission of data to help police and monitor activity by brokers. Regulators also serve as a countermeasure against market abuse and malpractice by brokers. Brokers adhering to a list of mandated rules are authorized to provide investment activities in a given jurisdiction. By extension, many unauthorized or unregulated entities will also seek to market their services illegally or function as a clone of a regulated operation.Regulators are essential in snuffing out these scam operations as they prevent significant risks for investors.In terms of reporting, brokers are also required to regularly file reports about their clients’ positions to the relevant regulatory authorities. The most-recent regulatory push in the aftermath of the Great Financial Crisis of 2008 has delivered a material shift in the regulatory reporting landscape.Brokers typically outsource the reporting to other companies which are connecting the trade repositories used by regulators to the broker’s systems and are handling this crucial element of compliance.Beyond FX, regulators help reconcile all matters of oversight and are watchdogs for each industry. With ever-changing information and protocols, regulators are always working to promote fairer and more transparent business practices from brokers or exchanges.
Read this Term
, this will present ongoing complexity, which indicates crypto’s potential significance.

After all, when existing frameworks and definitions simply cease to functionally apply, you know something rare is occurring.

How do you discuss, let alone regulate, crypto, if you can’t clearly define it? As the crypto experiment surges on, it eviscerates existing categorizations, because it sprawls across boxes, not quite fitting into any single one, occupying several at the same time, or distorting them into new, puzzling shapes.

Even that catch-all term, crypto, is inadequate since it now contains so many different items. This is acknowledged by some people in crypto who maintain that they are not in crypto at all. You might notice this, especially among dedicated Bitcoiners who insist absolutely that bitcoin is not crypto.

In which case, what is Bitcoin, what is Ethereum, and what are the components that people are referring to when they talk, broad brush, about crypto?

Currencies and Commodities

Bitcoin is often referred to as digital gold, so is it a commodity, like regular gold? In the US, the SEC and CFTC seem to believe so, even though Bitcoin is very different to traditional commodities. It certainly isn’t a material used to make anything, but part of Bitcoin’s similarity to gold lies in its scarcity, which makes it valuable.

That said, scarcity in itself doesn’t automatically equate to worth, meaning Bitcoin is valuable because enough people have tacitly agreed that it should be.

Perhaps Bitcoin’s price tag comes from the fact that it can, potentially, function as an efficient revolutionary method for storing value.

That, though, would form a curious loop: value derived from the capacity to be valuable. Or can we simply classify Bitcoin as a currency? Bitcoin as money makes intuitive sense, and let’s not forget that the gold to which it is compared was utilized as a currency in the past.

Unlike standard currencies, Bitcoin is volatile, and many holders will not yet put it to work for payments
Payments

One of the bases of mediums of exchange in the modern world, a payment constitutes the transfer of a legal currency or equivalent from one party in exchange for goods or services to another entity. The payments industry has become a fixture of modern commerce, though the players involved and means of exchange have dramatically shifted over time.In particular, a party making a payment is referred to as a payer, with the payee reflecting the individual or entity receiving the payment. Most commonly the basis of exchange involves fiat currency or legal tender, be it in the form of cash, credit or bank transfers, debit, or checks. While typically associated with cash transfers, payments can also be made in anything of perceived value, be it stock or bartering – though this is far more limited today than it has been in the past.The Largest Players in the Payments IndustryFor most individuals, the payments industry is dominated currently by card companies such as Visa or Mastercard, which facilitate the use of credit or debit expenditures. More recently, this industry has seen the rise of Peer-to-Peer (P2P) payments services, which have gained tremendous traction in Europe, the United States, and Asia, among other continents.One of the biggest parameters for payments is timing, which looms as a crucial element for execution. By this metric, consumer demand incentivizes technology that prioritizes the fastest payment execution.This can help explain the preference for debit and credit payments overtaking check or money orders, which in previous decades were much more commonly utilized. A multi-billion-dollar industry, the payments space has seen some of the most innovation and advances in recent years as companies look to push contactless technology with faster execution times.

One of the bases of mediums of exchange in the modern world, a payment constitutes the transfer of a legal currency or equivalent from one party in exchange for goods or services to another entity. The payments industry has become a fixture of modern commerce, though the players involved and means of exchange have dramatically shifted over time.In particular, a party making a payment is referred to as a payer, with the payee reflecting the individual or entity receiving the payment. Most commonly the basis of exchange involves fiat currency or legal tender, be it in the form of cash, credit or bank transfers, debit, or checks. While typically associated with cash transfers, payments can also be made in anything of perceived value, be it stock or bartering – though this is far more limited today than it has been in the past.The Largest Players in the Payments IndustryFor most individuals, the payments industry is dominated currently by card companies such as Visa or Mastercard, which facilitate the use of credit or debit expenditures. More recently, this industry has seen the rise of Peer-to-Peer (P2P) payments services, which have gained tremendous traction in Europe, the United States, and Asia, among other continents.One of the biggest parameters for payments is timing, which looms as a crucial element for execution. By this metric, consumer demand incentivizes technology that prioritizes the fastest payment execution.This can help explain the preference for debit and credit payments overtaking check or money orders, which in previous decades were much more commonly utilized. A multi-billion-dollar industry, the payments space has seen some of the most innovation and advances in recent years as companies look to push contactless technology with faster execution times.
Read this Term
since it has tended to rise so much in value against fiat currencies, but nonetheless, Bitcoin could certainly be a still-stabilizing future currency.

How about Ethereum?

The cryptocurrency of the Ethereum network, Ether, is often used to purchase digital items, NFTs (which are themselves a crypto sub-category), so is Ether a currency? Go to an NFT marketplace where JPEG-based artwork and auctions are priced in Ether, and it certainly looks that way.

But, Ether also acts as a kind of fuel for the Ethereum network, utilized to enable computations on the blockchain. In fact, these costs, which incur with every transaction, are referred to as gas fees (and can be notoriously high), creating the perception that Ether is an exotic digital substance, integral to the mechanical functioning of the network.

All of which could, arguably, shunt Ether into the commodities box, or a digital commodities box, and as is the case with Bitcoin, the CFTC has indicated that Ether should be treated as a commodity.

By this reckoning, Ether emerges as another currency/commodity hybrid. Although to add to the confusion, Ether was sold in an ICO, raising the BTC equivalent of around $18.3 million back in 2014, which you could be forgiven for thinking made it resemble a security.

Digital Artifacts

Are some kinds of crypto simply digital items, artifacts and collectibles? In the case of NFTs, that appears to be the case, as we have artists selling their work as NFTs, and collectors picking them up.

Do those collectors expect their buys to gain in value? Some do, and there are now platforms facilitating the trade of NFTs as if they were fungible crypto tokens, and a nascent sub-sector working on NFT-centered financial products.

On the other hand, there are collectors who are buying NFTs with the same mindset as traditional art collectors buying paintings, there are online NFT art galleries, and there are highly creative artistic collectives emerging around NFTs, not to mention established, traditional artists and brands releasing NFT collections.

One distinguishing feature of NFTs is that, unless the artwork is fully on-chain (which happens but is less common), then an NFT is simply a pointer to a file, somewhere online, containing the digitally rendered artwork.

Still, though, although the NFT itself may not actually be or contain the artwork, it is a token of ownership and provenance, with the caveat that the artwork referred to exists digitally, and will not be delivered in a truck and hung on a wall.

That said, NFTs can be used to trade physical items, and purchasing an NFT may unlock, for example, physical merchandise, services and access to real-life events.

Here, then, NFTs can function as tickets and receipts, in addition to being digital collectibles. But, at the same time, they are tokens issued on blockchains, falling squarely under the crypto umbrella.

Computer Programs

Many cryptocurrency networks are capable of running smart contracts, which essentially means computer programs that execute under certain conditions. In this case, crypto is referring to programmable tokens, or perhaps even to the programs themselves, with the tokens as containers.

We could refer to this as programmable currency, but such facilities don’t have to remain limited to currency uses. If some blockchains are to function primarily as decentralized computers, then some tokens can be thought of as the programs running on those computers.

This brings us back, again, to Ethereum, which is the prime example of such a blockchain, and so we have another possible classification for Ether to absorb.

As crypto continues to expand, we can expect to see its use cases diverge, and attempts at definition become increasingly strained. When it comes to regulation
Regulation

Like any other industry with a high net worth, the financial services industry is tightly regulated to help curb illicit behavior and manipulation. Each asset class has its own set of protocols put in place to combat their respective forms of abuse.In the foreign exchange space, regulation is assumed by authorities in multiple jurisdictions, though ultimately lacking a binding international order. Who are the Industry’s Leading Regulators?Regulators such as the UK’s Financial Conduct Authority (FCA), the US’ Securities and Exchange Commission (SEC), Australian Security and Investment Commission (ASIC), and the Cyprus Securities and Exchange Commission (CySEC) are the most widely dealt with authorities in the FX industry.In its most basic sense, regulators help ensure the filing of reports and transmission of data to help police and monitor activity by brokers. Regulators also serve as a countermeasure against market abuse and malpractice by brokers. Brokers adhering to a list of mandated rules are authorized to provide investment activities in a given jurisdiction. By extension, many unauthorized or unregulated entities will also seek to market their services illegally or function as a clone of a regulated operation.Regulators are essential in snuffing out these scam operations as they prevent significant risks for investors.In terms of reporting, brokers are also required to regularly file reports about their clients’ positions to the relevant regulatory authorities. The most-recent regulatory push in the aftermath of the Great Financial Crisis of 2008 has delivered a material shift in the regulatory reporting landscape.Brokers typically outsource the reporting to other companies which are connecting the trade repositories used by regulators to the broker’s systems and are handling this crucial element of compliance.Beyond FX, regulators help reconcile all matters of oversight and are watchdogs for each industry. With ever-changing information and protocols, regulators are always working to promote fairer and more transparent business practices from brokers or exchanges.

Like any other industry with a high net worth, the financial services industry is tightly regulated to help curb illicit behavior and manipulation. Each asset class has its own set of protocols put in place to combat their respective forms of abuse.In the foreign exchange space, regulation is assumed by authorities in multiple jurisdictions, though ultimately lacking a binding international order. Who are the Industry’s Leading Regulators?Regulators such as the UK’s Financial Conduct Authority (FCA), the US’ Securities and Exchange Commission (SEC), Australian Security and Investment Commission (ASIC), and the Cyprus Securities and Exchange Commission (CySEC) are the most widely dealt with authorities in the FX industry.In its most basic sense, regulators help ensure the filing of reports and transmission of data to help police and monitor activity by brokers. Regulators also serve as a countermeasure against market abuse and malpractice by brokers. Brokers adhering to a list of mandated rules are authorized to provide investment activities in a given jurisdiction. By extension, many unauthorized or unregulated entities will also seek to market their services illegally or function as a clone of a regulated operation.Regulators are essential in snuffing out these scam operations as they prevent significant risks for investors.In terms of reporting, brokers are also required to regularly file reports about their clients’ positions to the relevant regulatory authorities. The most-recent regulatory push in the aftermath of the Great Financial Crisis of 2008 has delivered a material shift in the regulatory reporting landscape.Brokers typically outsource the reporting to other companies which are connecting the trade repositories used by regulators to the broker’s systems and are handling this crucial element of compliance.Beyond FX, regulators help reconcile all matters of oversight and are watchdogs for each industry. With ever-changing information and protocols, regulators are always working to promote fairer and more transparent business practices from brokers or exchanges.
Read this Term
, this will present ongoing complexity, which indicates crypto’s potential significance.

After all, when existing frameworks and definitions simply cease to functionally apply, you know something rare is occurring.


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