Blockchain, the secure ledger technology that regulates bitcoin, has become a driving force in the world of cryptocurrency, and it’s a free-for-all as everyone from individual, every day investors to some of the world’s biggest corporations weigh in on the viability of blockchain.
Around the world, venture capitalists are lining up to fund blockchain startups– companies like IBM are jumping on the blockchain bandwagon, and proponents of cryptocurrency are hailing blockchain as a catalyst for change in trading of just about every kind.
Notably absent from the conversation is the majority of banks– as institutions that have long built their reputations on stability, the volatility of bitcoin and other digital currencies in recent years seem a good reason to hesitate.
But blockchain doesn’t appear to be going away any time soon. It’s a brilliant system, one with the potential to transform our entire global economy, as it fast becomes perceived as a reputable source for financial transactions of all kinds.
Blockchain presents an interesting dilemma for investors of all kinds– from the heads of companies to individual investors, the choice between early adoption or erring on the side of caution waiting for the blockchain story to unfold, for the technology to mature.
Either way there are many who see cryptocurrency in general as a massive risk, and while investors need to keep an open mind, it’s also vital to walk the line between risk and the potential for return. As with anything investing, it pays to be conservative as we feel out the future of the global economy as we learn everything we can about this transformative new system.
At this point, it seems very likely that blockchain will play a role in the world’s financial future– the concept holds some interesting keys to the evolution of global finances. Even if it should all fall apart tomorrow, surely some aspects of blockchain can be used to create new business models, new ways of working.
After all, it’s difficult to deny that blockchain has benefits for investors that are difficult to ignore.
The Benefits of Blockchain
Increased Security: Both cryptography and the distribution of information on a massive scale is key to blockchain’s intensified security– the system also allows for the quick and easy identification of any breach, which means many investors feel confident in the safety of their cryptocurrency.
Transparency
Blockchain’s transparency is beautiful in that it’s a clear, specific view of all transactions that occur within the system. This allows authorities an accurate, on-demand accounting at any time, but more importantly it allows investors to know exactly where they’re at, any time and from anywhere.
Cost Reduction
Blockchain technology can reduce fees by using a shared infrastructure which does not require a middleman– while blockchain technology used in conjunction with bank systems is forecast to significantly reduce bank fees at some point in the future, in the meantime this reduction in fees has benefits for the average investor.
Given the massive potential of blockchain, there are four strategic moves that investors can make to help ease their way in while staying safe:
Explore
Businesses wishing to invest in blockchain should be exploring the innovation at a core level while keeping an eye out for potential opportunities to integrate it with current practice. Educating key staff on blockchain and enabling innovation will help keep possibilities at the forefront.
Individual investors should educate themselves carefully on options for individuals while maintaining a conservative distance as far as investing money.
Build Awareness
Before making any moves, business leaders should become educated on all the nuances of both blockchain and cryptocurrency, including risks, opportunities and potential changes to current business processes.
Future IT investments should also be made with potential blockchain integrations in mind to enable agile integration should a stable opportunity arise.
For individual investors, self-education should be ongoing, with a gradual increase in investment as confidence in the technology increases.
Conduct a Pilot
By identifying potential opportunities for blockchain to improve organizational processes and implementing systems with future blockchain functionality in mind, businesses can enable key staff to identify areas where blockchain pilots may be conducted in order to test process improvements.
Pilots have the advantage of affording staff an opportunity to work hands on with blockchain, which in turn allows for a change in mindset and innovative thinking. Pilots are a practical way to introduce staff to innovative ways of thinking while forging ahead into potentially lucrative territory without the risk of huge financial losses.
While this is not as applicable to individual investors, conducting mini-pilots with self-directed funds is a great way to further your cryptocurrency education and identify opportunities.
There are a variety of ways to ease into blockchain technology and trading cryptocurrency, and conservatism coupled with ongoing education should remain the hallmark of intelligent investment.
References and Citations:
https://www.ft.com/content/b5b1a5f2-5030-11e7-bfb8-997009366969
