How To Invest In The Blockchain Without Buying Bitcoin

How To Invest In The Blockchain
Without Buying Bitcoin

    

Blockchain Technology’s potential to change the Status Quo

Not a day goes by without a media mention about blockchain technology’s potential to change the status quo of how data will be recorded, stored and transferred in the future. As blockchain is booming, investors are taking note and looking at opportunities where they could benefit. Investing in bitcoin, the digital currency built on the blockchain is considered too risky by many investors and, at the same time, doesn’t actually offer exposure to developments of new blockchain applications and the growth of this technology. Fortunately for investors, however, there are ways to invest in the blockchain boom don’t involve buying bitcoin.

Blockchain Startup Stocks

Firstly, investors can purchase blockchain startup stocks. Currently, there are several publicly traded stocks in blockchain companies trading on global exchanges. The first blockchain stock that started trading in the U.S. is that of the company BTCS Inc., which provides an online bitcoin shop and a range of blockchain solutions, according to its website. Another prominent North American stock is the Vancouver-based blockchain consultancy service provider BTL Group, which has recently launched its own smart contract platform called interbit. Its stock is trading on the Toronto stock exchange.

Outside of North America, there are listed blockchain stocks in the U.K. and in Australia. In the U.K., the London-based blockchain technology investment and development company Coinsilium is listed on the ICAP Securities and Derivatives Exchange (ISDX) and was the world’s first initial public offering by a blockchain startup. On the Australian Stock Exchange, there is the blockchain startup DigitalX. DigitalX provides two blockchain-based services: a global peer-to-peer remittance service called Air Pocket and a software solution to provide bitcoin liquidity to institutional investors called DigitalX Direct.

Crowdfunding Platforms

Alternatively, investors can purchase shares in blockchain startups during early-stage funding rounds through online crowdfunding platforms. Young blockchain startups regularly choose the route of online crowdfunding to secure funds to develop their products or service. The crowdfunding platform BnkToTheFuture, for example, allows investors to place funds into a range of Bitcoin and blockchain startups. Notable blockchain startups that have raised funds through BnkToTheFuture’s platform have included the prominent African remittance startup BitPesa and the multi-currency mobile bitcoin wallet Shapeshift.

Invest in New Blockchain Projects’ Initial Coin Offerings

The third option for investors would be to invest in initial coin offerings (ICOs) of new blockchain projects. ICOs are a new, innovative way of raising capital that involves blockchain projects issuing their own digital currencies or tokens to early backers during a crowd sale. As this new form of crowdfunding is still entirely unregulated there is substantially more risk involved than investing in blockchain stocks or in traditional crowdfunding campaigns, but the returns of successful ICOs have been excellent.

When it comes to investing in ICOs, the key is to select blockchain projects that will have real-life applications and are managed by a team of experienced blockchain developers. Some projects may even have financial backing from leading Bitcoin investors. That is usually also a good sign. Unfortunately, the more the ICO market grows, the more fraudulent activity also occurs. Hence, it is vital to conduct thorough due diligence on each ICO before investing in the crowd sale to avoid falling victim to a scam.

As blockchain technology will likely become the standard to securely record, store and transfer data in many industries over the next ten years, it might be wise to start looking into the investment opportunities in this space, despite the potential risk involved in these investments.

Chuck Reynolds
Contributor

 

Alan Zibluk Markethive Founding Member

How does the Blockchain Work (for Dummies) explained simply

How does the Blockchain Work (for Dummies) explained simply

How does the Blockchain Work?

Well here is a simple explanation that cuts through the hype.

Blockchain is a hot topic around the world these days, yet for many, the technology remains an elusive concept. Yet it shouldn’t, the concept is simple once you get your head around the architecture and theory of basic crypto economics. When you do have your “a Ha” moment, the world will never seem the same to you again.

This blockchain basics guide is designed to deliver a clear, non-technical introduction to one of the most transformational & misunderstood technologies of our time. If you want to know what blockchain technology is, how it works, and it’s potential impacts, without all the technical lingo, then this post is for you.

A short History of Transacting Money

Historically, when it comes to transacting money or anything of value, people and businesses have relied heavily on intermediaries like banks and governments to ensure trust and certainty. Middlemen perform a range of important tasks that help build trust into the transactional process like authentication & record keeping. The need for intermediaries is especially acute when making a digital transaction. Because digital assets like money, stocks & intellectual property, are essentially files, they are incredibly easy to reproduce. This creates what’s known as the double spending problem (the act of spending the same unit of value more than once) which until now has prevented the peer to peer transfer of digital assets.

But what if there was a way of conducting digital transactions without a third party intermediary? Well, a new technology exists today that makes this possible. But before we dive into the mechanics of this revolutionary technology, it’s important to provide a little context.

Blockchain Vs Bitcoin — What’s the connection?

Bitcoin first appeared in a 2008 white paper authored by a person, or persons using the pseudonym Satoshi Nakamoto. The white paper detailed an innovative peer to peer electronic cash system called Bitcoin that enabled online payments to be transferred directly, without an intermediary.

How the Blockchain Transfers Value

While the proposed bitcoin payment system was exciting and innovative, it was the mechanics of how it worked that was truly revolutionary. Shortly after the white paper’s release, it became evident that the main technical innovation was not the digital currency itself but the technology that lay behind it, known today as blockchain. Although commonly associated with Bitcoin, blockchain technology has many other applications. Bitcoin is merely the first and most well-known uses. In fact, Bitcoin is only one of about seven hundred applications that use the blockchain operating system today.

“[Blockchain] is to Bitcoin, what the internet is to email. A big electronic system, on top of which you can build applications. Currency is just one.” — Sally Davies, FT Technology Reporter

One example of the evolution and broad application of blockchain, beyond digital currency, is the development of the Ethereum public blockchain, which is providing a way to execute peer to peer contracts.

What’s under the blockchain hood?

Blockchain is a type of distributed ledger or decentralized database that keeps records of digital transactions. Rather than having a central administrator like a traditional database, (think banks, governments & accountants), a distributed ledger has a network of replicated databases, synchronized via the internet and visible to anyone within the network. Blockchain networks can be private with restricted membership similar to an intranet, or public, like the Internet, accessible to any person in the world.

When a digital transaction is carried out, it is grouped together in a cryptographically protected block with other transactions that have occurred in the last 10 minutes and sent out to the entire network. Miners (members in the network with high levels of computing power) then compete to validate the transactions by solving coded complex problems. The first miner to solve the problems and validate the block receives a reward. (In the Bitcoin Blockchain network, for example, a miner would receive Bitcoins).

The validated block of transactions is then timestamped and added to a chain in a linear, chronological order. New blocks of validated transactions are linked to older blocks, making a chain of blocks that show every transaction made in the history of that blockchain. The entire chain is continually updated so that every ledger in the network is the same, giving each member the ability to prove who owns what at any given time.

“A blockchain is a magic computer that anyone can upload programs to and leave the programs to self-execute, where the current and all previous states of every program are always publicly visible, and which carries a very strong crypto economically secured guarantee that programs running on the chain will continue to execute in exactly the way that the blockchain protocol specifies.” — Vitalik Buterin

Blockchain’s decentralized, open & cryptographic nature allow people to trust each other and transact peer to peer, making the need for intermediaries obsolete. This also brings unprecedented security benefits. Hacking attacks that commonly impact large centralized intermediaries like banks would be virtually impossible to pull off on the blockchain. For example — if someone wanted to hack into a particular block in a blockchain, a hacker would not only need to hack into that specific block, but all of the proceeding blocks going back the entire history of that blockchain. And they would need to do it on every ledger in the network, which could be millions, simultaneously.

Will the blockchain transform the Internet & the global economy?

Make no mistake about it. Blockchain is a highly disruptive technology that promises to change the world as we know it. The technology is not only shifting the way we use the Internet, but it is also revolutionizing the global economy. By enabling the digitization of assets, blockchain is driving a fundamental shift from the Internet of information, where we can instantly view, exchange and communicate information to the Internet of value, where we can instantly exchange assets. A new global economy of immediate value transfer is on its way, where big intermediaries no longer play a major role. An economy where trust is established not by central intermediaries but through consensus and complex computer code.

“The technology likely to have the greatest impact on the next few decades has arrived. And it’s not social media. It’s not big data. It’s not robotics. It’s not even AI. You’ll be surprised to learn that it’s the underlying technology of digital currencies like Bitcoin. It’s called the blockchain.” — Don Tapscott

Blockchain has applications that go way beyond obvious things like digital currencies and money transfers. From electronic voting, smart contracts & digitally recorded property assets to patient health records management and proof of ownership for digital content.

Blockchain will profoundly disrupt hundreds of industries that rely on intermediaries, including banking, finance, academia, real estate, insurance, legal, health care, and the public sector — amongst many others. This will result in job losses and the complete transformation of entire industries. But overall, the elimination of intermediaries brings mostly positive benefits. Banks & governments for example, often impede the free flow of business because of the time it takes to process transactions and regulatory requirements. The blockchain will enable an increased amount of people and businesses to trade much more frequently and efficiently, significantly boosting local and international trade. Blockchain technology would also eliminate expensive intermediary fees that have become a burden on individuals and businesses, especially in the remittances space.

Perhaps most profoundly, blockchain promises to democratize & expand the global financial system. Giving people who have limited exposure to the global economy, better access to financial and payment systems and stronger protection against corruption and exploitation.

“Every human being on the planet with a phone, will have equal access. Expanding the total addressable market by 4X” — Brock Pierce

The potential impacts of blockchain technology on society and the global economy are hugely significant. With an ever growing list of real-world uses, blockchain technology promises to have a massive impact. This is just the beginning. Many of the most exciting applications and platforms haven’t even been invented yet!

Chuck Reynolds
Contributor

Alan Zibluk Markethive Founding Member

Coalition Launches to Promote Blockchain in the Netherlands

Coalition Launches to Promote Blockchain in the Netherlands

  

A blockchain consortium in the Netherlands has published a new roadmap.

First revealed on 20th March, the so-called National Blockchain Coalition was established by the Ministry of Economic Affairs' information technology team. Overall, the initiative aims to unite more than 20 public and private organizations including the government agencies, universities and private companies from financial, logistics and energy sectors, with the goal of turning the country into a leader of a blockchain tech.

Major supporters include ABN Amro, ING, and Nationale-Nederlanden, one of the region's largest insurance companies. In statements, Minister of Economic Affairs Henk Kamp stressed his optimism that blockchain technology would help make digital payments and data exchange easier and safer for global users while improving the economic outlook of the Netherlands.

Kamp said:

"By keeping the Netherlands at the forefront of the application of innovative technologies, our knowledge base remains progressive and world-class. That creates jobs and income."

The combined initial funding of the founding partners amounts to €700,000 by the end of March. Each member will invest €200,000 and €500,000 will come from available government capita.

High priorities

The statements coincided with the release of the National Blockchain Coalition's full agenda, of which identity was high on the list of the priorities. The agenda went on to explain how the group would now need to work with leading legal entities and other objects on standardization and interoperability challenges in 2017 on this goal and others.

Overall, the coalition aims to speed up the pace of rollout of blockchain technology within the government and use more government records such as data from the National Office of Identity Data, Chamber of Commerce, and registration records from the Ministry of Security and Justice.

Chuck Reynolds
Contributor

Alan Zibluk Markethive Founding Member

UK Research Council to Award £3.6 Million in Blockchain Grants

UK Research Council to Award £3.6 Million in Blockchain Grants

  

British, UK, money

A UK-based research agency charged with distributing government grants has announced that £3.6m ($4.5m) will be made available to seven blockchain projects.Revealed yesterday, the Engineering and Physical Sciences Research Council (EPSRC) said the grants will range from £420,000 ($525,000) to £617,000 ($772,000). The funds will be issued under its "Digital Economy Theme", an effort aimed at supporting research around digital technologies that could have a positive impact on daily life.

The EPSRC is the main funding agency for science and research initiatives in the UK, investing approximately £800m ($100m) annually for research and postgraduate training. According to EPSRC chief executive Philip Nelson, the decision to award the blockchain grants was made due to the apparent maturation of the industry beyond financial use cases.

He said in a statement:

"Distributed Ledger Technology may be synonymous with bitcoin to many, but as these projects show it has disruptive potential across a wide range of products and services. If it delivers on its radical promise, it could make a significant impact on the economy and society."

Each of the seven EPSRC-funded projects will bring together universities and private-sector companies, with projects being led by professors from British colleges and universities. Receiving the most funding, at £617,000, will be an initiative focused on regulation and compliance models.

The project is being led by Professor Tomaso Aste of University College London and will gain insight from blockchain consortium R3, as well as public institutions like the Cyprus Securities & Exchange Commission, the UK Financial Conduct Authority and the London School of Economics. The second most highly financed project seeks to develop trusted and transparent voting systems, using distributed ledger tech.

Perhaps unsurprising given the increasing interest in central bank-backed digital currencies, the EPSRC will also fund an initiative that will use data analytics to steer monetary policy decisions regarding the money supply.

Chuck Reynolds
Contributor

 

Alan Zibluk Markethive Founding Member

Russian Plans to Legitimise cryptocurrency by 2018

russia plans to legistimise cryptocurrency by 2018

Russia Plans To Legitimize Cryptocurrency By 2018

Russia is a country has never seen eye-to-eye with bitcoin up until now. Several legal proposals have been drafted which could have lead to jail time. Thankfully, it appears regulators have come to their senses, as bitcoin users in Russia no longer need to fear jail time. In fact, the country may turn bitcoin into a legitimate financial instrument as early as next year.

This U-turn by Russian legislators has quite a lot of people stunned in disbelief. Just a year ago, it seemed using cryptocurrency in the country would lead to jail time. While that is still a distinct possibility right now, things are going to change very soon. The Russian Finance Ministry wants to accept bitcoin as a way to fight money laundering. An interesting stance, as most countries feel bitcoin facilitates money laundering, even though there is no evidence.

If all things go according to plan, bitcoin will become a legal instrument in Russia as soon as 2018. Government officials want to combat illegal money transfer. As a result, the Russian central bank and government are working together on getting this new legislation approved as soon as possible. A positive stance towards digital currencies can benefit the country, that much is evident.

Russia Looks Differently At Bitcoin All of a Sudden

One thing bitcoin provides is absolute transparency regarding transaction participants. To be more specific, transactions can be seen by the public in real-time. Through the banking or other financial systems, there is little to no transparency. This effectively facilitates money laundering, costing the Russian government millions every year. Bitcoin transfers show which address is the sender and the recipient. It is anything but an anonymous payment method.

Do not be mistaken in thinking Russia will effectively regulate bitcoin, though. Despite what governments may think, it is impossible to regulate cryptocurrency in any way or shape. Legalizing bitcoin will force companies dealing with cryptocurrency to conduct additional AML checks. A similar scenario is playing out in China right now, with exchanges introducing additional verification requirements.

Russia has been battling money laundering for quite some time now. Hundreds of lenders lost their banking license in the past few years. Legalizing bitcoin is a direct result of investors looking for alternative solutions. Additionally, it will also help give bitcoin a better publish image moving forward. After all, once bitcoin is a legal currency, activity will be monitored even further. That is not necessarily a bad thing as long as people use it for legal purposes. Anyone conducting illegal activity with cryptocurrency will have to find other solutions, though.

For the time being, the first deadline to mark on the calendar is mid-2017. Around that time, legislators will decide if digital currencies are an asset in Russia. This will be an important day in the history of bitcoin, that much is certain. After Japan legalizing bitcoin, it appears other countries are scrambling to do the same. An interesting development, yet it shows how mature bitcoin has become over the past few years.

David Ogden
Entreperenuer

Alan Zibluk Markethive Founding Member