Have you heard about “Blockchain”? Well, surely, you might have. It is a buzzword in numerous circles. You might have been told how profitable it is. Perhaps, you might have been contemplating how to invest in blockchain and how to reap its benefits.
But first, you need to know a few basics. When you think about investing in blockchain technology, you can’t simply invest in it, per se. As most of the cryptocurrencies are actually based on the blockchain technology, you can buy them, hoping that their value appreciates.
In order to get started with this, you need to understand about blockchain first.
What is Blockchain and How to Invest in Blockchain?
Blockchain is essentially a database or a network which stores various transactions in a particular order. It is quite powerful as transactions are essentially stored immutably, that means they can’t either be deleted or even altered.
Also, blockchain is essentially distributed. A lot of computers, also known as “nodes” all over the world, can easily connect and assist in maintaining the entire network. As a number of nodes keep on joining the entire blockchain network, the ledger is quite guaranteed to be certainly immutable as no single person can simply or without permission, edit the record.
The trick or key to keep blockchain networks quite functional is through getting to reach a consensus. No decision can easily be made by one particular party or even a small minority. Often times, blockchain projects generally rely on a particular cryptocurrency to reach consensus and that’s where you can know how to invest in blockchain.
What Actually Makes Blockchain Technology Valuable?
Before you go ahead into making any investment, you should know the benefits of it to make it an attractive investment.
a. There is no financial oversight meaning no middlemen or any third parties.
b. It encompasses Data integrity since data can’t be altered and all computers carry the complete network.
c. The network is built through shared consensus, so there is low fraud.
d. Smart contracts which mean organizing a variety of transaction types among users.
e. Transparency is ensured through making all transactions known to the entire network.
f. Security is ensured through cryptographic protocols as well as network consensus, which prevent tampering.
Ways to Invest in Blockchain
The power of the blockchain technology was discovered by innovative minds. There are a plethora of blockchain startups which came into existence over the last few years. Due to this, the total number of various cryptocurrencies has increased swiftly.
As we know that blockchain is essentially the underlying technology of most of the present cryptocurrencies, knowing how exactly to invest in the blockchain is the final step in leveraging its benefits. Essentially, investing in cryptocurrency essentially means making an investment in blockchain.
Choosing your investment
At present, there is a wide range of cryptocurrencies for you to choose from. However, not everyone will achieve success. Investment is about protecting the capital. Hence, you should pick the investments with the utmost care
Make sure you consider carrying out an extensive fundamental analysis of each and every investment before you buy.
Mentioned below are the ways to invest in blockchain underlying the favourite cryptocurrencies.
Exchange-Traded Funds (ETFs)
They are investment funds which hold a broad basket of different commodities like bonds or stocks. They have particular focus like technology stocks or even one-to-three year treasury bonds.
A wide range of blockchain-focused ETFs has currently hit the market over the years. Some of them are mentioned below:
a. Reality Shares Nasdaq NexGen Economy ETF (BLCN)
b. Innovation Shares NextGen Protocol ETF (KOIN)
c. Amplify Transformational Data Sharing ETF (BLOK)
d. First Trust Indxx Innovative Transaction & Process ETF (LEGR)
Individual Stocks
Since it is the best time to invest in blockchain and if ETFs seems too paltry an investment choice, then you can certainly try individual stocks. A wide range of companies is heavily investing in blockchain technology. However, the challenges is to select the companies which are orienting a specific and significant portion of the operations of business around blockchain technology. Here is an entire cross-section of different companies to consider:
a. Overstock (OSTK)
You might have come across Overstock’s pivot to cryptocurrencies and blockchain. This company has duly bet big on the blockchain tech that it will transform the business and will also gross tremendous amount of profits in the following years. This company is transitioning out of its own e-commerce domain and is currently looking to run and operate a blockchain business.
b. Nvidia (NVDA)
Famous graphics as well as computer gaming company, Nvidia, is moving forward to reap quite a significant rewards from its own blockchain investments. A lot of cryptos actually run on a discovery model for the generation of new coins. It means computers have to work in solving complex mathematical problems or equations to “obtain” or “earn” new currency. Sales on GPU have increased over the years as miners are now purchasing GPU powerhouses in order to mine digital gold.
c. Mastercard (MA)
Being a leading credit card processor, this company will lose significant business if blockchain succeeds. Keeping this in mind, the company has made a significant investment in terms of resources into the integration of blockchain network into its own payment network.
d. Cryptocurrencies
Cryptocurrencies are certainly among the best ways to invest in blockchain. You can easily have a blockchain without any cryptocurrency, but you can’t simply have cryptocurrency without a blockchain.
