The surge in Bitcoin prices and popularity over the past two years has been incredible. Starting form $1000 in March 2017 to $20000 in December 2017, this meteoric rise has led to the greater interest in blockchain investment. At its core Blockchain is a highly secure decentralized ledger. Blockchain technology is seeing a huge influx of investors and startups who wish to break into the crypto marketplace. Apart from Bitcoin, there are many other cryptocurrencies such as Ethereum or Litecoin that can be viable investment options. There are also blockchain companies on the stock exchange for investors to look for. Another possible investment area are initial coin offerings of blockchain projects or startups.
What is blockchain technology?
Blockchain is an increasing list of blocks which are linked using cryptography. Each block contains a hash of the previous block, a timestamp and transaction data. A blockchain is decentralised and is secured by the users with the help of a consensus algorithm. Most cryptocurrencies use publicly readable blockchains. Some private blockchains are being used for businesses. Consensus algorithms are designed in such a way that a block once generated cannot be altered. The Blockchain technology was designed to be highly secure without the need of a trusted third party. Blockchains are being used in various fields such as cryptocurrencies like Bitcoin, implementing smart contracts, internet of things and in various other industries.
How to Invest in Blockchain Technology
There are various ways to invest in blockchain technology. Starting from cryptocurrencies such as Bitcoin and Ethereum, to blockchain companies and startups. Trading cryptocurrencies can also be a potential source of income. Trading only occurs on dedicated cryptocurrency exchanges.
Investments using Cryptocurrencies and Trading
Investing in cryptocurrencies is the most common way to invest in blockchain technology. Most cryptocurrencies use blockchain as their underlying technology. An investment in cryptocurrencies requires you to create a crypto wallet and an account on a cryptocurrency exchange. Bitcoin is the most dominant cryptocurrency by far, but it is not the only one. To create a well balanced portfolio, one should invest in many other cryptocurrencies such as Ethereum or Litecoin. Selecting assets to invest in is the most important aspect of any investment. There are thousands of cryptocurrencies in the crypto market. A simple strategy would be to invest in the top ten cryptocurrencies by market cap. The best way to invest in cryptocurrencies is to read them and understand what they represent and their use cases. The vision of the company behind the digital asset should be the primary criteria for asset selection.
Buying cryptocurrencies requires setting up an account on a cryptocurrency exchange. One should choose carefully which exchange to be used. An exchange within your own jurisdiction is always better than a foreign exchange. The process of buying is simple. Create an account, verify your identity and then use paper money to buy the desired currency. Another way to invest in bitcoin is to buy Bitcoin based investment products. These products allow you to bet on the price of Bitcoin without having to actually purchase Bitcoin. Currently, only Bitcoin has such investment products, other cryptocurrencies are still a work in progress. Trading cryptocurrencies is similar to trading stocks but instead of brokers, there are online exchanges. There are many exchanges in existence currently. A few of these are Binance, BitMex, KuCoin and Changelly.
Blockchain Stocks and Companies
Blockchain stocks or companies are other popular investment options in order to enter the blockchain market. A notable entry into the blockchain segment is MasterCard, which intends to begin facilitating payments using blockchain based technologies. As of now, this is still in development but theoretically, this could allow MasterCard to offer blockchain based credit and debit cards. IBM has started employing blockchain technologies for more efficient tracking of shipments, improving food safety and more. Eastman Kodak also entered the blockchain segment with its KodakCoin. It aims to create a digital currency which facilitates payments for photographers images. It also uses blockchain to ensure those photographs are not being used without explicit permissions from the owner. These were a few of the top tier entries into the blockchain segment.
The following companies are the low tier entries into blockchain. BTCS is a publicly traded company, which develops applications related to blockchain databases and digital currencies. It is one of the first blockchain based companies. Global Arena Holding is a holding and technology development company. It acquires blockchain related patents and then provides them funds to increase their growth. It is also working on applying blockchain technology to ATMs. These are two of the most popular blockchain based companies. Among others, there are DigitalX, BTL group, Coinsilium group and First Bitcoin capital. Most of these companies provide blockchain based consultancy services and other blockchain solutions. Coinsilium group and First Bitcoin capital also invest in other blockchain startups and assist them in their development.
Blockchain Startups and ICOs
Many startups across the world are trying to solve various problems by using blockchain technology. They can be found in every industry from content creation, transportation, internet of things or financial services. Initial Coin Offerings are a type of crowdfunding which use cryptocurrencies instead of fiat currencies. Tokens are sold to investors in an ICO as future currency units which will hold value after the project launch. Investing in an ICO can be extremely risky but also extremely rewarding. One should always make sure of the genuineness of a startup and its potential use cases before investing. These are a few startups that are using blockchain technology to make a difference in the world.
PATRON is building a decentralized influencer marketing platform which aims to eliminate inefficiencies in branded content and social media. The company generated forty million dollars in its token sale and is currently expanding its operations to the United States.
TraDove aims to develop a light, quick and trustable business to business blockchain payment network for international transactions. The world’s first business to business token, BBC, was launched by TraDove. Its social network connects corporate buyers and sellers.
Celsius network is a borrowing and lending platform that allows users to earn up to five percent interest on their cryptocurrency. It allows borrowing money at nine percent interest using cryptocurrencies as collateral. Their goal is to bring the next hundred million people into the crypto market.
Menlo One is a framework which is used to build decentralized applications as quickly as a traditional web application. Their framework offers developers all essential tools to build decentralized apps, from distributed databases to a proof of reputation algorithm.
Gameflip is an online marketplace funded by Silicon Valley venture capital. It has over three million members currently. It allows transactions of any type of digital goods by gamers. Their FLP utility token can be used to transact digital items within the Gameflip marketplace. Transactions of approved in game items will be enabled by their blockchain.
Buddy is essentially an app store for developers, created by developers. Their aim is to provide programmers with a backbone on which they can build blockchain technology applications. They intend to remove everything that can be automated and in the process give developers time to be creative. Buddy boasts a very impressive list of partners and customers. It is established on the cloud marketplaces of Google, Amazon and GitHub.
CIINCH media marketplace is a blockchain powered media planning and buying platform for traditional media assets. ADBIT is a token that will be used on the CIINCH marketplace. Their aim is to automate the multiple layers of manual processes that are currently used in the industry.
DACC is a content based blockchain that offers identity and access management at the infrastructure level. This allows users full control over the creation, storage and accessibility of their content. Their core team members are comprised of people from MIT and Harvard. Their early partners include TRON, Consensus Capital, Crypto Capital, Block VC and the Roark fund.
Most users only need access to their private data for a short period of time. The rest of the time, this data is stored online and is vulnerable to attacks by hackers. Goldilocks technology, which is pending a patent, makes this data more secure by making it offline until the time it is required, without sacrificing accessibility.
FCoin is a cryptocurrency exchange based in China. It is decentralized and completely transparent. The digital currency exchange is based on a mining and profit sharing mechanism that offers returns up to eighty percent to the community. It was launched in May 2018 and has since then seen a massive increase in daily trading volume.
Stocks issued by large companies that are experimenting with blockchain technology are currently the best way to invest in blockchain technology with minimum risk. For investors who have a higher risk tolerance can go for investments in cryptocurrencies and cryptocurrency trading. Blockchain startups have the most long term risk among all the options. ICOs may be the most rewarding if selected properly.
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