5 Ways To Explain Investing In The Blockchain Boom
What is blockchain technology? How is it influencing everyday life?Learn all about investing in blockchain.
How Has The Blockchain Boom Affected Investors?
One of the hottest trends in the finance scene, blockchain technology has the potential to completely transform traditional business models in several sectors. Similar to a massive digital spreadsheet, blockchain is shared by all members of a decentralized network. Frequently associated with confirming Bitcoin payments, this technology can also be used in several other ways as Bitcoin becomes more widely accepted by the mainstream valued at almost $6 billion.
How To Invest In Blockchain?
Bitcoin comes with a rapidly expanding user base considered by many financial services companies while paramount amongst the benefits offered by cryptocurrency comes as the ability to reduce the cost of transferring funds, particularly on a global scale. It is likened to the disruption causing the internet as the impact of Bitcoin and the technology behind it on the finance industry as well as used in the music and publishing industries.
With tremendous promise, investors are already looking at how they can tap into the potential of blockchain technology, as the nature of blockchain technology before the investment decisions are certain unique factors considering that they differ from traditional investments. With opportunities for investing in blockchain technology abound, the good news is giving investors at every level the chance to leverage the potential offered by the revolutionary technology. Largely depending on the amount of risk he or she is willing to incur when the investor chooses to invest in blockchain technology as well as the type of yield they wish to achieve.
1. Stockpiling Bitcoin
Many investors take advantage of the opportunity to stockpile gold in anticipation of rising prices, while other investors are taking advantage of the opportunity to stockpile Bitcoin. Even though the two assets are different, the reason is that gold is a tangible item whereas Bitcoin is not where many of the basic investment principles remain the same.
Considered rare, both assets have rates like that of Bitcoin generated in the early days of technology relatively fast at the rate slowed over the last few years when technology reached its built-in limit of 21 million coins.
Simply supply and demand is the reason behind this with limited supply as demand increases, values also rise. Think again in case you are under the impression that the concept o stockpiling Bitcoin is for investment purposes only for speculators. As more and more methods for procuring Bitcoin are being made available, there has certainly never been a better time to begin a cryptocurrency investment portfolio.
2. Blockchain Penny Stocks
It is a fact that cryptocurrency has penny stocks. Being the most well known digital currency, Bitcoin is certainly not the only option as other types of digital currency include Litecoin and Altcoins. Some alternative digital currencies were developed in the last few years in an attempt to compete with Bitcoin while many others were designed specifically to fill needs not met by Bitcoin.
3. Altcoin Crowdfunding
Considered a popular and mainstream method to raise seed capital, crowdfunding is for all types of investments. When you are seeking to get involved in blockchain technology, one option is to consider a unique crowdfunding method using alternative coins. The total coin supply is pre-mined and then sold in an initial coin offering or ICO which comes before the network being publicly launched. One of the many well-known coin networks is Bitshares using this method to get started. Using blockchain technology services and apps have utilized this same pre-sale method to raise funding as investors are allowed to purchase coins with the expectation that prices will surely increase at some point in the future if the service comes popular.
4. Angel Funding and Startup Ventures
Certainly not a new concept, angel funding and investing in startups, with one variation which is beginning to gain traction is this idea of investing in startups built on blockchain technology. Becoming increasingly popular, Bitcoin is accepted by more mainstream businesses whereas the number of entrepreneurs interested in experimenting with the technology behind the cryptocurrency has skyrocketed. Such startups need funding as is the case with any other new venture. It helps when providing startups and angel funding allowing you to get in on the ground floor of what could turn out to be the next blockchain frontier. It comes with significant risks as it is important to carefully weigh both the pros and the cons.
5. Pure Blockchain Technology Play
On the rise as an increasing number of pure blockchain technology plays as companies such that of hashing Space Corporation, BTCS, Inc. And Global Arena Holding that has rapidly become well-known names in the space.
Are you still doubting the investment method right for your risk appetite? To keep the risk low, the best option is to invest in stocks issued by one of the larger financial services companies currently experimenting with the potential of blockchain technology to improve services. Investing in one of the pure blockchain technology investment opportunities could deliver the right combination of risk versus return as investors can tolerate a higher degree of risk in exchange for a greater return.
The Bottom Line
Many of the naysayers contended that blockchain technology and cryptocurrencies such as Bitcoin were merely a fad, whereas six years in they represent a concept continuing to gain steam and even have the power to change the world. The payoff could be massive, for those adventurous investors choosing to become involved in the blockchain technology boom.