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Chris Burniske and Jack Tatar are the authors of Cryptoassets.

Money & Investments

Cryptoassets Book Summary - Cryptoassets Book explained in key points

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Cryptoassets summary

Name: Cryptoassets
Rating: 4.4 (580 reviews)
Author: Chris Burniske and Jack Tatar

Chris Burniske Jack Tatar

The Innovative Investor’s Guide to Bitcoin and Beyond

4.4 (580 ratings)

24 mins

Brief summary

Cryptoassets by Chris Burniske and Jack Tatar explores the world of cryptocurrencies and blockchain technology. It provides insights on how to evaluate the potential of various cryptoassets and how to invest in them wisely.

Topics

Cryptocurrency

Table of Contents

Cryptoassets
Summary of 9 key ideas

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Key idea 1 of 9

What’s in it for me? Get a grip on cryptoassets.

At the time of writing, cryptocurrencies are a hot topic of debate. Some say cryptoassets are the way of the future, and the time to get in is now. Others will tell you they’re a fad, and that investing in Bitcoin is just a fancy way of throwing your money out the window.

So who’s right? Or maybe all this crypto-talk is Greek to you, and you’re still wondering what exactly a cryptoasset is?

Either way, these blinks offer some answers, giving you a short history of Bitcoin and blockchain technology as well as some handy investment tips and cautionary advice. The future of finance is already here; the only question is how long it will take for the world to recognize it.

These are certainly exciting times, but a word to the wise: the landscape of cryptoassets is changing rapidly, so be sure to take the author’s advice and do plenty of research yourself.

In these blinks, you’ll learn

about the mysterious origins of Bitcoin;
what to watch for in a white paper; and
what makes a wallet “hot.”

“Cryptoasset” is an umbrella term for a new asset class that consists of software and a currency.

Unless you’ve been living in a cave on an abandoned island, you’ve probably heard about Bitcoin by now. In the last few years, it’s been all over the news, as have a handful of other cryptoassets – an unprecedented digital asset class that presents some thrilling new opportunities, both for experienced and amateur investors.

Here’s a narrower definition of a cryptoasset: a commodity consisting of software and an accompanying currency.

OK, but what exactly determines a cryptoasset’s value?

Well, the value of cryptoassets – just like the value of other commodities such as gold or oil – depends partly on market supply and demand. Unlike gold and oil, however, cryptoassets are intangible, and so it’s the value of the software (not of a physical resource) that goes up and down in tandem with the peaks and valleys of the market.

Let’s take a look at Bitcoin to get a better idea of how this works.

Bitcoin, like all cryptoassets, consists of software and an associated currency, “bitcoin” – and therefore, unlike other, non-cryptoassets, it doesn’t fall into a single asset class.

Let’s contrast this with oil, which is classed as a consumable/transformable asset (or c/t asset) – an asset usually bought so that something else can be made from it. Well, the software component of Bitcoin works similarly as it can be used for a number of different purposes.

Bitcoin, the currency, however, is similar to another asset; gold, which is classed as a store-of-value asset. Since gold is rare, beautiful and useful, people worldwide have agreed on its value. Cryptoassets function somewhat similarly – like gold, and unlike government-issued money, there is a finite amount of each cryptoasset’s currency.

So plenty of people buy bitcoin without intention of trading it. Rather, they leave it alone and let it appreciate value over time, as one might do with gold or any other precious metal.

Hence, the cryptocurrencies that succeed will be the ones that are both useful and work as a store of value.

As mentioned at the beginning of the blink, cryptoassets are an asset class unto themselves, but the fact that they fit into multiple preexisting classes only makes them both that much more enticing – not to mention valuable – to today’s investors.

Cryptoassets use blockchain technology, which is truly revolutionary.

Bitcoin, like all other cryptoassets, is supported by blockchain technology – a term that is more often bandied about than actually understood.

So how do blockchains work?

Bitcoin, the first cryptoasset on the market, has since been joined by many others.

Bitcoin is the most well-known cryptoasset, and its currency is worth the most because it was the first one on the market. But there are tons of other cryptoassets out there, and new ones are constantly being created.

Bitcoin’s genesis is tinged with mystery. Bitcoin’s – and, by extension, the blockchain technology’s – inventor is said to be a man named Satoshi Nakamoto. However, Nakamoto’s identity has yet to be verified, and there are those who believe “him” to be a group of people.

The world of investment and finance is changing, and the brave and well-informed have much to gain.

Have you ever considered putting money in the stock market? It’s scary – because, to the uninformed, and even to those in the know, it’s very hard to predict what will happen. One would think, therefore, that investing in cryptoassets, which are relatively young and volatile, would be extremely dicey. But it’s actually a pretty safe bet.

Cryptoassets such as Bitcoin, and the blockchain technology they’re supported by, may completely transform the financial world.

Investing in cryptoassets isn’t risk-free; you might lose your money.

Hold your horses! Before you withdraw your life savings and invest it all in cryptoassets, let’s take a detailed look at some of the dangers that go hand in hand with investment.

Danger number one: the speculation of crowds problem. In less technical language, it’s the danger of monkey see, monkey do.

Diversify your assets so that there is no correlation or negative correlation.

Now that you’re familiar with the dangers of investing let’s explore some of the finer points of investment. When building your investment portfolio, there are two things that should be at the forefront of your mind: correlation and diversification.

Investments should work together, with each asset complementing all the others.

You can buy cryptocurrencies in different ways but watch their varying trading pair diversities.

Maybe you’re feeling ready to buy your first cryptoassets. It seems like the way of the future, and you have a clear enough idea of how to avoid the pitfalls of investment.

Well, to buy your first cryptoassets, you’ll have to get an account on an exchange site such as Bitstamp or GDAX.

After investing in a cryptoasset, you can store it in two different ways.

Let’s imagine you did it – you took the plunge and bought your first cryptoasset. That’s very exciting, but what now? Where does it get stored and how do you access it?

Well, that’s partially up to you. Each cryptoasset has a private key that enables you to transfer it to other people who possess their own private keys, so all that storage really involves is keeping this key safe.

There are a few more things to which the truly innovative investor should pay attention.

Let’s imagine you’ve bought a few cryptoassets by now, but you’re still not sure how to calculate the risk that each new investment poses.

If you truly want to be an innovative investor, you’ve got to do more than glance at a cryptoasset’s valuation; you must consider its white paper and decentralization edge as well.

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What is Cryptoassets about?

Cryptoassets (2017) is both a brief history of Bitcoin and a detailed guide to investing in cryptoassets. It explains how blockchain technology came into existence and will help potential investors get their bearings in the world of cryptoassets.

Cryptoassets Review

Cryptoassets (2017) delves into the world of cryptocurrencies and blockchain technology with a focus on investment strategies. Here's why this book is definitely worth reading:

It provides a comprehensive overview of the emergence and potential of cryptoassets, making it an essential read for anyone interested in the future of finance.
With its practical insights and analysis of different types of cryptoassets, it guides readers on how to navigate this complex and rapidly evolving market.
The book's emphasis on risk management and portfolio construction ensures that readers gain a deep understanding of how to approach investing in cryptoassets responsibly.

Best quote from Cryptoassets

Blockchain technology is one of the most important innovations in the history of finance. – Brian Kelly

—Chris Burniske and Jack Tatar

Who should read Cryptoassets?

Innovative investors
Students of information technology
People interested in the world of finance

About the Author

Jack Tatar is the author of What’s the Deal with Bitcoins, one of the earliest books on the subject. He is an angel investor in cryptoasset startups and has worked in the financial-services industry for more than two decades.

Chris Burniske is a cofounder of Placeholder, a New York-based firm specializing in cryptoassets. He was instrumental in making Wall Street recognize cryptoassets as a new asset class.

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Money & Investments

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