There might not be a hotter topic in the world right now than bitcoin and blockchain technology. A few years ago, bitcoin was almost unheard of. Now, this peer-to-peer has created a huge numbers of millionaires seemingly overnight and is spurring the growth of numerous hot startups. While bitcoin is the hot topic of today, what might turn out to be just as important is the blockchain technology that underlies bitcoin.
You may already be familiar with blockchain technology. If not, there are a ton of resources out there that can get you up to speed. Rather than digging into the meat of the technology, let’s consider what it might mean for the world and investing. Blockchain could become one of the most revolutionary technologies, but don’t believe too much hype, it’s still long ways from proving its full worth.
Regardless of Bitcoin, Blockchain is Going To Be the Next Hot Tech
Bitcoin has been lambasted by some as the “most obvious bubble ever.” Of course, those many bitcoin millionaires who are buying hypercars and San Francisco mansions may end up having the last laugh. However, bitcoin’s biggest long-term impact might be the revolutionary technology that it’s built upon: the blockchain.
What is the blockchain? More or less, it’s an incorruptible digital ledger that allows for distributed processing and validation. The ledger can keep track of transactions and processed data. This might not seem all too revolutionary until you think about the implications. This ledger allows for processing to be distributed across countless computers, smartphones, and other processor equipped devices.
There are vast, vast quantities of unused processing power at any given moment. At the same time, even as massive companies like Amazon continue to expand their server farms, they never seem able to satiate the demand for processing power. As more things go online, such as medical records, financial payment processing, and other quantities of “big data”, the demand for processing power is only going to increase.
The Biggest Opportunities May Be Business Side
At the moment, bitcoin and blockchain are arguably the hottest topics among techies, early-adopters, hackers, and all the rest. Certainly, these stakeholders have been vital for the growth of alt-currencies, and thus the blockchain itself. Nobody knows who bitcoin founder Satoshi Nakamoto is, but many suspect that he comes from a similar background. Nakamoto, in turn, largely formulated the current concept of the blockchain.
Yet the future of blockchain technology may ultimately rest in the hands of more traditional companies, businesses, and business owners. Already, some major financial institutions have begun to invest serious money and resources into blockchain.
Visa has its B2B Connect program up and running. The pilot program has now brought together businesses in Asia and United States to facilitate global payments and transfers. As of now, cross-border payments are often a hassle, but B2B Connect could make such payments both easier and more secure. So far the early results have been promising even if all the kinks have yet to be worked out.
While many traditional banks and financial institutions are skeptical of bitcoin, some of the biggest names have already jumped onto the blockchain bandwagon. Goldman Sachs has been investing heavily in blockchain technology, seeing it as a potential solution to facilitate global payments and other banking needs.
Goldman Sachs, Google, and others are investing in blockchain. Investors who want to invest in blockchain can pick up GOOG or GS stock. For those who don’t know the contours of blockchain technology, doing so might be the safest route. However, the safest route often means the lowest upside.
Investing in Bitcoin, Alt-Currencies, and Blockchain
Meanwhile, investors now have more opportunities to pour money into blockchain and alt-currencies. Of course, you can simply go out and buy bitcoin, ethereum, and ripple. However, many people don’t want to deal with the still considerable technological hurdles. One solution is to invest in an Exchange Traded Funds and Futures. Progress in getting these investment assets to market have been made in recent months, but as of yet none are traded on exchanges.
Another option is to invest in companies like Superbloom, which allows you to buy tokens. You buy SEED tokens. These tokens can then be invested in vetted companies that are part of Superbloom’s funding network. In a sense, it’s like the blockchain equivalent of a venture capital fund.
Expect many more developments and opportunities for investors. For now, investing directly in alt-currencies or market traded companies like Google remain the most straightforward ways to invest. However, these “easy” pathways may lose their dominance in the near future.