Democratization of Finance: Blockchain for Everyone
Putting an end to top-heavy wealth generation by providing investment tools to the everyman/woman
Blockchain technology has a number of use cases spanning hundreds of industries. The distributed ledger offering has captivated everyone from insurance brokers to retailers, cementing its place at the forefront of technical discussion worldwide. It’s not hard to see why — transparent, open-source and immutable records for the transmission of value and information are poised to majorly disrupt the very foundations of how we communicate in the digital realm. Most importantly, we at OpenFinance Network feel that blockchain promotes inclusion, ensuring that tools and opportunities once restricted to the financial elite are made available to everyone.
The United States is a prime example of a growing divide between the ‘uber-rich’ and the rest of the population. Through a combination of inheritance and the phenomenon of ‘money making more money,’ the odds are heavily stacked against all but the major players. Although legislation like the JOBS Act of 2012 softened the rigorous regulations surrounding securities and the SEC chairman just recently discussed allowing more mainstreet investors in on private deals, there’s still work to be done. We believe that this work consists of demystifying investments in order to fight wealth imbalance. We strive to provide investment resources and the tools needed to apply these resources to facilitate the generation of wealth for everyone.
With blockchain technology, the paradigm is about to shift, and the rigid structures observed in finance up until now will begin to alter as new architecture arises. There’s no better time to push for inclusion than now — there’s an opportunity here, and we need to make sure that all can benefit from it. With the right technology, regulation and education, a more even distribution of wealth is within reach.
As we detailed in a previous Medium post, we aim to provide individuals with a highly-portable means by which to interact with the OpenFinance Network and its partner services in the form of our Investor Passport. To sign up, simply head over here and click ‘Register Now.’ It’s open to everyone — all that’s required is that verification is passed for KYC/AML purposes.
Investing, on a personal level, is very much about planning — after all, no two parties will have the same strategy. There are too many factors that investors need to adapt to their own preferences (whether it’s capital, timespan or risk appetite, to name a few). Understanding these different factors is crucial to responsible wealth generation. Below, we’ve provided some tips that we believe to be important in doing so.
Plan: it’s wise to first sit down, and consider what it is you want to get out of your investment — how much you can sensibly invest (remember that you should never put in more than you can afford to lose) and at what point you intend to take profits (or conversely, cut your losses).
Research: there are many different forms of investments that one may choose to consider. This largely depends on the investor’s time preference and risk profile — some assets are more volatile than others (greater potential for short-term gains, as well as losses), like cryptocurrencies or equity. The least volatile, conversely, are those that are expected not to fluctuate too much in value (precious metals, index funds).
Diversify: ideally, to mitigate risk, a good portfolio will not place all of its proverbial eggs in one basket. There are certain cycles in a market that will affect all assets therein, so spreading capital across a variety of different investment vehicles is necessary to hedge against overarching trends.
The ultra-rich are getting richer. This doesn’t mean no one else can. It’s never been easier for individuals to ensure that their money makes money for them. At OFN, we’re committed to providing investors from all walks of life with the tools to get there.
Juan M. Hernandez is the Founder and CEO of OpenFinance Network, the trading platform for security tokens and other alternative assets. Juan is a serial entrepreneur, technologist, and polymath experienced in financial markets, exchanges, and blockchain technology. He holds a CS degree from Northwestern University and an MBA from the Kellogg Graduate School of Management.
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