Episode 71: Matt Hougan discusses the basics of blockchain and cybercurrencies, host Rick Ferri

Jun 25, 2024

Matt Hougan, Chief Investment Officer at Bitwise Asset Management, dives into the intriguing world of blockchain and cryptocurrencies. He discusses the evolution of blockchain technology and its foundational role in securing digital currencies like Bitcoin. The conversation covers the differences between public and private blockchains, the unique mining process of Bitcoin, and how this digital asset offers a new form of wealth transfer. Matt also touches on the future of digital currencies and the potential impact of central bank digital currencies, offering valuable insights for investors.

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INSIGHT

Blockchain Is A Shared, Permissionless Database

A blockchain is a shared, public database that updates in real time without a single controller.
Matt Hougan says this enables new capabilities by removing reliance on centralized authorities.

INSIGHT

Cryptography Secures Ownership And Access

Public-private key cryptography secures ownership and access to on-chain funds.
Matt Hougan compares addresses to a public house address and private keys to the front door key.

INSIGHT

Blockchains Enable Fast, Intermediary-Free Settlements

Shared blockchain ledgers let digital money settle quickly without intermediaries.
Matt Hougan notes Bitcoin settles 24/7/365 and can clear within about ten minutes.

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Matt Hougan is the Chief Investment Officer of Bitwise Asset Management, the world's largest provider of cryptocurrency index funds with more than $4 billion in assets under management. Before joining Bitwise, Matt held several notable positions in the financial industry, including CEO at Inside ETFs, Managing Director of Global Finance at Informa, and CEO of ETF.com. Matt also co-authored The CFA Institute's publication on ETFs, "A Comprehensive Guide to Exchange-Traded Funds."

Matt is a long-time Boglehead who attended the Bogleheads Conference in years past. I asked him to join me for a no-spin discussion about cyber-currencies. We cover the history of blockchain technology, why cryptology is important to the blockchain, and how this led to Bitcoin, the world's first digital currency, and eventually other digital currencies, including the digital dollar. The discussion is structured as purely educational. There is no sales hype, no recommendations for purchase or sale, and no price speculation.

The Bogleheads on Investing podcast is hosted by Rick Ferri, CFA, a long-time Boglehead and investment adviser. The Bogleheads are a group of like-minded individual investors who follow the general investment and business beliefs of John C. Bogle, founder and former CEO of the Vanguard Group. It is a conflict-free community where individual investors reach out and provide education, assistance, and relevant information to other investors of all experience levels at no cost. The organization supports a free forum at Bogleheads.org, and the wiki site is Bogleheads® wiki.

Since 2000, the Bogleheads' have held national conferences in major cities nationwide. There are also many Local Chapters in the US and even a few Foreign Chapters that meet regularly. New Chapters are being added regularly. All Bogleheads activities are coordinated by volunteers who contribute their time and talent.

This podcast is supported by the John C. Bogle Center for Financial Literacy, a non-profit organization approved by the IRS as a 501(c)(3) public charity on February 6, 2012. Your tax-deductible donation to the Bogle Center is appreciated.