🔸What is a commodity, and what is a security? 🔸Are $BTC and $ETH commodities, and how are they different? 🔸The implications of the rise of digital commodities Answers will be given in a breakdown of commodities by CMCAlexandria 👇
Before the rise of cryptocurrencies, a security could not be a commodity.
Securities are tradable financial assets. For instance, stocks are equity securities and bonds are debt securities. A derivative — like acontract of a commodity — is also a security. However, a commodity itself could not be a security, because there is no issuer. The invention of cryptocurrencies has raised the very thorny question of whether a cryptocurrency can be a security and a commodity, or just one or the other.often pops up concerning cryptocurrencies.
On the Ethereum blockchain, users can also transact value. However, Ethereum is more frequently used to execute smart contracts on the blockchain. These deterministic functions allow us to build applications that use Ethereum's decentralized blockspace as an "operating system." Hence, Ethereum is pitched as a decentralized world computer.
. This analogy is broadly correct, as ETH is "consumed as fuel" to execute smart contracts that make up decentralized applications.. However, if blockspace in and of itself is a digital commodity, then all blockchains are commodities. This is where we need to make a further distinction between commodities and securities.the difference between public and private goods:A private good is limited in its availability to its owners and whom they give access .
A rivalrous private good is when the consumption of the good by one person prevents the ability of others to consume it.. The network belongs to nobody, and there is no centralized control over it. However, the more people use its blockspace, the higher transaction fees become.However, some fear that its switch to
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