What is blockchain?

Blockchain is a veritable technological revolution that, in the long run, radically rebuilds financial, corporate and other business areas. Let us figure out what it is.

What is blockchain?

This development is a distributed information storage system: the database is not associated with a general processor. Blockchain gives you the ability to forward values to other users in the form of records and provides access to these.

Lists of ordered records are called blocks. Each of the following blocks commits the time it was created and contains a reference to the previous block. The inability to modify this information ensures that the system is safe and may be managed offline.

Blocks are connected to one another to form a whole chain (hence, the name of the technology: blockchain — the chain made of blocks). Users are able to change only the parts of the chained blocks that they own. Access is controlled by the encryption system. Each member of the system has a set of private, cryptographically generated keys that are required to make records. A third party can only receive data from the record if it receives a key from its owner.

The system continually synchronizes copies of the database from all users, excluding the possibility of fraud.

Blockchain is a great solution for recording transactions, controlling credentials, and confirming identity on the Web. This technology makes it possible to get rid of intermediaries in any transactions.

The possibility of using this development

Blockchain is not limited to the subject of cryptocurrency, where it is used to record transactions publicly. The technology can be used for:

  • decentralised operations between banks, located on different continents;
  • creating smart contracts — safe for all parties and quickly performed contracts that are enforceable after these conditions are met;
  • the development of supply systems;
  • the organisation of an ultra-modern courier service, etc.

Blockchain is the future

The actions taken by major players in the market, intending to apply the technology of distributed business registry, signify the serious prospects of industry development. More than 40 major banks around the world are cooperating within the R3 Partnership to research, standardize and unify the blockchain protocol. These are Barclays, J.P. Morgan, Royal Bank of Scotland, UniCredit, Bank of America, and many others.

The leaders of world-renowned IBM believe that blockchain is a prerequisite for the emergence of a second-generation economy. The IBM Cloud platform provides an opportunity to use integrated tools to develop, launch, and monitor blockchain applications (the first of which were released by the company in the spring of 2017). Among them is IBM Blockchain Founder Accelerator, aimed at facilitating the implementation of blockchain networks for organizations and developers.

Microsoft is not lagging behind IBM, using the Ethereum-based technology in the Azure cloud platform for corporate developers, as well as Intel and other major companies with a well-known name.

Blockchain is able to drastically change our reality. What we see today is only a prerequisite for future development, which is likely to be profitable for the developers of systems based on a distributed registry.

The report of the Infosys Finacle international company states that half of the world’s banks are already investing or planning to invest in blockchain until the end of 2017. The average size of such investments is about $1 million.

How can a private investor take advantage of this chance?

Types of investment for individuals

Purchase of shares

The ideal option is to focus on rapidly developing organisations that implement products based on blockchain. You should look at the following companies.

  • Global Arena Holding is working to develop the method to use this technology in ATMs and is an investor of Blockchain technologies.
  • BTCS is an American pioneer company in the blockchain sphere, which appeared on the stock market.
  • Coinsilium Group develops and invests in companies that use the distributed registry technology in its operations.
  • Digitalx creates products to provide cybersecurity for payment systems based on blockchain.
  • BTL Group develops a wide range of applications based on this technology, from banking to use in virtual sports games.
  • Hashingspace Corporation is in the process of developing tools for future blockchain services aimed at implementing cloud solutions, controlling BTC ATMs and wallets, and providing e-currency mining services.
  • First Bitcoin Capital buys BTC-startups and creates services for firms that are about to introduce Bitcoin in their business.

Participation in crowdfunding

Crowdfunding platforms based on blockchain allow startups developers to get the tools to implement the idea, and investors are able to invest their own funds into advanced development. These include:

  • Waves — crypto platform, which allows for the production, trade, and exchange of custom tokens (asset equivalents), voting on blockchain and conducting decentralised crowdfunding.
  • QTUM gives you the ability to develop and run smart contracts and decentralised applications.
  • BnkToTheFuture is a platform for contributors who have opted to support fintech companies and foundations.

Industry perspectives

Blockchain technology is predicted to have a great success. Experts from Markets argue that market turnover will reach $2.3 billion by 2021, taking into account the annual growth of 61.5%. The Grand View Research specialists predict the growth of the blockchain market to $7.74 billion by the year 2024. These figures are attributable to the possibilities of using this development beyond the financial sphere.

The impressive future of the blockchain market is a powerful argument to include investment into the industry in your portfolio.