Blockchain solves the double spending problem. This is explained with examples and a use case. The differentiation of private vs. public blockchains is tackled to learn about the incentive mechanism for miners and the use case of tokens. Electricity consumption is a hot topic when it comes to token mining and therefore, different consensus algorithms are being introduced and discussed. The example of Ethereum shows the change from proof of work to proof of stake and the forks that can result.
Crypto belongs in the alternative asset class. Low correlations among different asset classes are key when it comes to constructing a solid portfolio. Adding crypto to a mixed portfolio can improve the risk- return metrics of the portfolio. This is calculated and shown on the risk/return diagram. The asymmetric risk profile is explained and Alpha and Beta components are being discussed.
Whether it is possible to value crypto tokens and how is discussed a lot. Existing models that cover the supply side (e.g. stock to flow) and the demand side (Metcalfe, S-Curve) are presented. In the end, both sides are united in the SwissRex Model and it’s fundamental valuation of Bitcoin. The fair value of Bitcoin by the end of the year is calculated.
Adoption requires infrastructure and interfaces for a simple use. What are the developments with regards to the infrastructure in Switzerland and worldwide? What matters when it comes to deciding for a broker, an exchange or a custodian? We’ll give an overview of the relevant due diligence questions and talk about the tools available for investing: spots, futures and swaps. Moreover, safe storage, the universe of existing crypto products and risk management is being introduced.