Blockchain, the vehicle of the cryptocurrency, is a technology that nobody can own or control, but anyone can use. It has potential applications for almost any company involved in the maintenance of records, documentation, records and transactions.
Although bitcoin cryptocurrency was created in 2009, the idea behind the blockchain technology in which it was built dates back to the 1990s. Since the launch of Bitcoin, blockchain has gained widespread recognition in the world of technological investment. With many risk funds, numerous blockchain applications have been developed and many more are in process.
Even in its initial stages, blockchain is acquiring such a reputation for potential that any company associated with the term can attract new investments overnight, leading some to use “word B” so casually that they also attracted the attention of regulators.
Core Blockchain software lives on the Internet, available to anyone with a modem, just as Linux operating software is available for free as an open source element. It allows the creation of decentralized and public access ledgers, sequential chains of data blocks. Blockchain is like a digital security box, but its security does not come from the secret or exclusive access, but from being invulnerable.
With Blockchain, nobody is in charge, because everyone is in charge. Everyone knows what is happening, and nobody can change the record. Data blocks are immutable, so block chains are permanent audit trails.
Advocates argue that Blockchain’s role as a transparent tamper-proof registry and its decentralized nature make it more secure than any repository under an entity’s control, because central sources are much easier to hack. With blockchain there is no custody or control by a central source, such as a financial institution.
Cutting the middleman was a fundamental principle of the foundation of bitcoin, which eliminates banks, and is the premise for many evolving or anticipated uses of blockchain. Consequently, some blockchain applications can be disruptive, which poses an existential threat to companies whose business model is based on being a central source.
Although many individual investors consider that blockchain is an inscrutable technical enigma, as complicated to understand as bitcoin, potential applications in many fields are attracting a strong flow of venture capital and corporate development. In addition to the uses in cryptocurrency, the embryonic and planned blockchain applications include:
- Values. Nasdaq partnered with Chain, a bitcoin infrastructure company, for a pilot program to test the use of blockchain to market shares of private companies.
- Financial markets systems. A consortium of more than 80 members of banks, regulators and technology partners, led by blockchain tech’s R3 CEV start-up, is developing a blockchain platform operating system called Corda.
- Payment platforms. JPMorgan Chase has launched a new interbank payment platform based on a private blockchain for Ethereum, a form of cryptocurrency.
- Bank operations. UBS and Barclays are experimenting with blockchain as a means to accelerate back-office functions.
- Private blockchain These are secure private networks of blockchains developed by IT providers. IBM is developing new shipping tracking tools for the giant Maersk and Walmart stores.
- Management of digital rights. Spotify acquired start-up Mediachain Labs last year to use blockchain technology for music copyright attribution protocols. And Eastman Kodak is looking to develop public access repositories for stock photographs and their copyrights.
- Decentralize the collaborative economy. Organize the P2P hosting and share the trip: without paying the intermediaries, that is, Airbnb, Uber and Lyft.
- Medical records (private blockchain). Could Blockchain finally allow a secure long-term life history shared among the providers?
- Digital public records. Projects are underway in Rwanda and other African nations to build blockchain-based real estate titling systems.
- Compliance with the law Possible uses include the management of tests and tools to mark suspicious transactions.
- Vote. The proponents say that an immutable record of the votes cast could have the certainty of paper with the convenience of digital access and storage.
- Secure Internet of Things devices (IoT). There are more than 8,400 million devices enabled for the Internet, from refrigerators and bells to portable monitors and prototypical cars. Proponents argue that blockchain technology could be used to reduce the risk of many IoT devices being compromised by a single point of failure, such as a server.
- P2P e-commerce. Peer-to-peer of all kinds, potentially threatening to eBay.
Not surprisingly, much of the blockchain risk funds so far – notably Sequoia Capital, Founders Fund (Peter Thiel) and Andreessen Horowitz – have focused on bitcoin-related companies. But part of this money is for other applications, including e-commerce, media, identification and private blockchain.
The risk investment in blockchain start-ups started in 2012 and grew at a good pace in 2016 and 2017. According to a report by CB Insights, a technology financing research firm, Google and Goldman Sachs are among the largest corporate investors. assets. Other investors include Visa, PNC, Deloitte, Transamerica, Wells Fargo, Capital One and US Bancorp.
Investing in blockchain requires an understanding of the types of entities that now benefit from the evolving uses of technology. People seeking to obtain this exposure for their portfolios can do so now by investing in funds or individual stocks of companies involved in:
- Cryptocurrency The names include the Japanese company SBI holdings and Overstock.com, with its newly created digital currency subsidiary, tZero.
- Manufacturing. The manufacturers develop products for the cryptocurrency industry, including powerful and specialized computer processing chips and other hardware used by “miners”, independent operators who collectively validate and, therefore, allow transactions. Nvidia, Advanced Micro Devices and Taiwan Semiconductors are some examples.
- Services and software solutions . Several companies offer software services and solutions for entities related to Blockchain and Private Blockchain. Candidates would include publicly owned IT / computer services firms that enter, including IBM, Google, Accenture and Cisco.
As applications evolve, a wider range of investment opportunities related to the block chain among public companies is expected to emerge.