Oftenly when we hear about blockchain, the first thing that comes to our mind are cryptocurrencies. This technology is what enabled the fast growth of currencies like Bitcoin, however, it’s potential doesn’t lay solely in the financial sector. Blockchain technology is set to make big changes in the way we conduct businesses and transfer information.
What is blockchain technology?
In simple terms, it’s a protocol created to allow direct transfer of data and ensure transparency and security of the whole process. Since cryptocurrencies are the best-known examples of its use, let’s stay with it. Your assets are stored in a digital wallet, which comes with a unique wallet address. Whenever you want to transfer some of it, you send it from your wallet directly to the receiver’s wallet, without the need for intermediaries. Blockchain technology creates a public ledger, which registers every transaction that took place. It’s a decentralized system, which guarantees security as it keeps track of all the operations, but also lets you maintain your privacy since the only information visible will be the date, the amount of money sent and the wallet addresses.
How is it used?
Blockchain technology can, and most likely will, be implemented in many different sectors as each industry can gain from the increased transparency and security. As of now, it’s most commonly used to create cryptocurrencies, but it’s starting to appear in other fields as well. The use of such technology is slowly changing the way the venture capital industry operates, with platforms like VNX Exchange bringing liquidity to the market, thanks to the tokenization of assets. Since data in the blockchain can be transferred, but cannot be replicated, it gives us many new possibilities in protecting intellectual property as well. Such a system could allow for music or books to be bought directly from the creators and become available right after the payment, without the need for the involvement of third parties.
What can it be used for?
Currently, people are more aware of the impact their choices have on the world and thanks to public ledgers, consumers could get easy access to the history of the products they want to buy. For example, it would let them know, whether the company behind said product is as environmentally friendly as it claims. However, its potential doesn’t lie only in commercial applications. Every year the increasing amount of counterfeit medical products end up on the market, and blockchains could help regulate this issue. It can be implemented in tax systems, increase the accessibility of medical data and allow the creation of digital IDs. Creating a voting system, based on the blockchain protocol, would revolutionise the way our elections work. Transparency of the whole process would effectively rule out any frauds.
Is it worth investing in?
Even though many people are still unaware of this technology, and even more fail to understand its relevance, with so much potential for growth, it’s not going away anytime soon. Quite the opposite, we’ll see it being used more and more every year. That’s why it’s the best time to invest in this industry. But when you have already decided on taking this step, the first question you have to ask is, of course, how exactly can you invest in blockchain? If you’re interested in this subject, you’ve probably already seen the articles about people who gained huge amounts of money thanks to the bitcoin price boom. So one of the options may be just buying cryptocurrencies, though it’s worth keeping in mind that such a move isn’t risk-free, as the value of such currencies tends to fluctuate a lot. If you’d rather invest in the technology itself, companies like 360 Blockchain Inc and IBM make a huge impact on the further development of blockchain technology, so buying their shares may be something for you.
The new blockchain-based startups appear regularly and getting to know more about them can give you an idea about where this industry is heading. Choose the type of investment that feels right for you but keep in mind that it will always involve risks. It’s especially true in an industry that’s only just developing, so before taking any decision, consult it with a financial advisor and consider all pros and cons.
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Founder Dinis Guarda
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