How to Invest in Blockchain?

Over the 13 years of its existence, blockchain has revolutionized not only finance but also many other industries – medicine, logistics, e-commerce, energy, etc.

And companies directly or indirectly associated with blockchain technology show good results. For example, PayPal grew 25% in a year by enabling customers to use advanced blockchain-based financial solutions.

In this article, we will tell you how the investment in the development of tools working on a distributed ledger can help you achieve a great ROI.

What is blockchain in plain language?

Blockchain is a distributed database that stores information about all transactions of the net participants. It consists of a chain of blocks combined according to certain rules. The technology is based on the principle of decentralization. This means that the database is located not on one particular server but the computers of all the users of the system. Thanks to this distribution, the information in the blocks cannot be replaced or deleted. - It would be necessary to hack all the computers on the network at once to update the records.

Hashing helps protect information from hacking: each new block of data in the blockchain is hashed and contains the hash of the previous block. This means that if we change the data in the first block, its hash will also change and no longer match the hash that was memorized to the second block. The system will notice this discrepancy and block the changes.

What is the future of this technology?

The main advantage of the blockchain lies in the combination of openness and security. Anyone with internet access can validate data on all operations performed, and no one can change or fake this data. Blockchain provides complete transparency, high speed, and transaction security. 

You can, for example:

• • store and verify personal information,
• • verify information,
• • track the origin and movement of goods,
• • automate processes and get rid of complex workflow,
• • protect intellectual property and much more.

In fact, the blockchain allows you to get rid of intermediaries in areas where the participants do not trust each other. For example, when concluding contracts, it eliminates the need to contact third-party authorities.

Where is blockchain used?

Distributed database technology has proven itself in banking, payment services, logistics and transport, healthcare, energy, and many other industries. Here are some examples:

Financial sector

Blockchain allows businesses to eliminate intermediaries in financial transactions, reduce costs and optimize processes. For example, financial institutions can speed up the reconciliation of documents during factoring, gain verification via smart contracts, and speed up the transactions, removing the middleman. 

Retail

In the field of commerce, blockchain capabilities are widely used to track supply chains. With this technology, retailers can control the origin of any goods and identify counterfeit or falsified products in just a few seconds.

For example, Nestle uses the IBM Food Trust blockchain technology to track the production and supply of Zoegas coffee. Thanks to the development, everyone can get complete information about coffee beans - from the place of origin to roasting point.

Healthcare

Blockchain helps track pharmaceutical supply chains and validate their authenticity and provenance in healthcare. In addition, this technology can be used to securely store electronic health records, control the distribution of donor organs, optimize health insurance and billing procedures, and conduct various studies.

Energy

Blockchain is also in demand in such a sophisticated industry as energy. The introduction of the DLT makes it possible to simplify the system, which consists of electricity producers, distribution network operators, banks, traders, and consumers. Thanks to the blockchain, all transactions for the purchase of electricity can be carried out on the network, and producers and consumers can interact directly. Eliminating intermediaries, reducing the cost of electricity, and increasing the transparency of transactions.

Choosing to invest in the technology of the future

Blockchain use cases confirm that this technology has great potential and can benefit companies from any industry. According to PwC forecasts, over the next decade, 10-15% of the world's infrastructure will run on the blockchain. All this makes investments in blockchain projects a promising direction.

Among the advantages of investing in blockchain, experts also highlight the pro-cyclical dynamics of the industry. Considering that the global economy is on the verge of the next stage of growth associated with gradual recovery from the pandemic, we expect high results from blockchain projects. In addition, investments in the blockchain show a low correlation with other asset classes (bonds, gold, etc.), due to which they improve diversification and other portfolio characteristics.

There are several ways to invest in this technology. Among them is the development of new cryptocurrencies and financial platforms. This has become a trend for many companies. Among the pioneers are arrays of giants: Amazon, Alibaba, Booking, Uber, etc. Thus, Amazon Business, launched in 2015, has grown 2.5 times over the past two years and reached $ 25 billion in revenue for 2020 (6% of total turnover companies). For the successful development of a new fintech project, it is important to single it out as a self-sufficient business unit.

Conclusion 

• ● Blockchain is a promising technology that is used in many industries.
• ● Experts expect that the blockchain can bring $1.76 trillion to the global economy over the next ten years.
• ● The rapid development of the blockchain makes it a prospective division for new project development. Investments in blockchain technologies are possible through the purchase of shares of companies working in this direction and via the realization of your own fintech solution.