The Potential Of Tron
Tron was created as a direct challenge to the media industry, including the web-based giants like Amazon and Netflix. Its slogan is “Decentralize the Web” and its aim is to eject the corporate middleman from the process of consuming media.
Beyond the current cryptocurrency boom, surely its future success depends at least in part on the quality of the programming it brings to its users.
Investing in cryptocurrencies and other Initial Coin Offerings is highly risky and speculative, and this article is not a recommendation by Investopedia or the writer to invest in cryptocurrencies or other ICOs. Since each individual’s situation is unique, a qualified professional should always be consulted before making any financial decisions. Investopedia makes no representations or warranties as to the accuracy or timeliness of the information contained herein.
What Is A Blockchain
Blockchains are digitized, decentralized public ledgers that list all transactions made in their associated cryptocurrencies. Furthermore, computing the next block in the blockchain from new transactions is the mechanism through which digital currencies are mined or brought into existence as a reward that miners receive for successfully doing the complex computation required.
Blockchains are constantly growing as newly completed blocks get added to the public ledger in chronological order that allows cryptocurrency transactions to be monitored and updated without a central record. The record created by a transaction is unalterable and able to be verified by anyone using the blockchain and not just by major financial institutions like banks.
Several industries have successfully applied blockchain technology to solve business problems. These include banks, companies involved in the Internet of Things , artificial intelligence application developers, cybersecurity firms and online music companies.
The Value Depends Largely On Popular Opinion
Investing in crypto-assets is highly speculative. The market value can fluctuate a lot over short periods of time, and is affected by things like media hype and investor opinion.
The price of crypto may depend on:
- its popularity at a given time
- how easy it is to trade or use it
- the perceived value of the currency
- its underlying blockchain technology
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Learn About All The Different Applications And Use Cases For Blockchain Technology
The idea of a blockchain was first conceived as the mechanism supporting Bitcoin. To solve the double-spending problem associated with digital currencies, Satoshi Nakamoto devised an immutable ledger of transactions that chains together blocks of data using digital cryptography.
While the idea works extremely well for Bitcoin and other cryptocurrencies, there are loads of other useful applications of blockchain technology. Here are 15 of them.
Reform: Bringing Rfs Mandates In Line With Reality
When congress passed the RFS in 2005, few, if any, could have predicted the state of energy markets today.
Key projections like increasing fuel consumption and decreasing domestic crude oil production failed to transpire. As a result, the RFS needs to undergo urgent reform in order to be better aligned with the realities of modern gasoline and diesel markets.
For more information, visit afpm.org
Among those 47 IPOs were a number of high profile tech companies including Moonpig , Darktrace , and Deliveroo .
The UKs venture capital scene is also thriving, with U.S.-based Sequoia opening its first European office in London. Sequoia was an early investor in world-class businesses such as Apple, Google, and Airbnb.
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What Is Blockchain And How Does It Work
A blockchain allows data to be stored and distributed to every member of the blockchain. One thing that blockchain does not permit is for data to be changed. Once it is written digitally on a blockchain, that information will be immutable. It can never be changed.
On Bitcoins blockchain, there is a record of every transaction that has ever been made. When you take part in developing a blockchain for Bitcoin, you receive a Bitcoin. But, Bitcoin is not blockchain. Many types of data can be stored on a blockchain including inventories, database information, voter registrations and more. When information is stored into blocks stacked on top of each other, that is called a blockchain. Each block of information is given an identifying number or hash. If information is stored on IBMs blockchain, for example, everyone on the network has equal access to it through the peer-to-peer, transparent network of computers connected by nodes.
New Blockchain Funds You Could Invest In Today
Read on to discover five new entrants in the blockchain investment funds space that launched in 2021.
What are blockchain investment funds? Blockchain investment funds are investment vehicles that invest in a basket of shares in crypto companies or companies developing or deploying blockchain technology.
You can buy shares in blockchain funds to gain exposure to the fast-growing crypto and blockchain industries.
Most blockchain funds come in the form of ETFs , which can be traded like stocks on major securities exchanges. Provided you have an online brokerage account that gives you access to global stock exchanges, you should have no issue investing in blockchain funds.
Top new blockchain fundsLets dive in and explore the latest additions to the blockchain fund universe.
Bitwise Crypto Industry Innovators ETF BitWise Crypto Industry Innovators ETF is an equity-focused ETF that enables you to invest in companies involved in the crypto economy. The index fund primarily tracks the performance of the Bitwise Crypto Innovators 30 Index. As the benchmark implies, the index has 30 holdings.
The eligibility requirements for a company to be included in the index are: the company must derive at least three-quarters of its revenue from the crypto ecosystem or have a minimum of 75% of the net assets tied up in digital assets.
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Factors To Consider Before Investing In Blockchain
Five factors are generally considered before investing in blockchain technology. Investing in blockchain technology does not necessarily mean that you are buying Bitcoin. There are other companies, cryptocurrencies and projects you can investigate. Here are the factors you should consider before investing in a blockchain investment project:
What Can Crypto Do For Your Company
To spark your companys thinking about crypto, here are some of the rationales behind why some companies are currently using crypto:
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Too Many Coins Crypto Equities Might Be Your Best Bet
With so many coins performing well, it can be hard to pick out the winners and the losers. But crypto equities give investors a play that is likely to remain on top so long as cryptocurrency as a whole continues to develop.
Funds like the VanEck Digital Transformation ETF provide exposure to digital assets through companies that support digital infrastructure. Coinbase is expected to do well no matter what happens with Ethereum 2.0, and Square should thrive regardless of whether bitcoin keeps its throne or gradually gets supplanted by altcoins. Those two stocks are the top holdings in DAPP, which also includes everything from Miners like Hut 8 to firms like Galaxy Digital Holdings.
For more news, information, and strategy, visit the Crypto Channel.
Buy Shares In The Grayscale Eth Trust
Another Ethereum investment option for US investors is the Grayscale ETH Trust. Grayscale Investments is a digital asset manager that offers investors the ability to gain exposure to digital assets by buying shares in a Trust that invests in a specific digital asset. Investors that buy shares in the Trust get exposure to the price movement of ETH through a traditional, regulated investment vehicle.
You can buy shares in the ETH Trust through your broker, provided they have access to the OTC market, where the Trusts shares trade, which most brokers do.
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Why Invest In Blockchain
As a new technology with potential game-changing effects on the business world, blockchain is naturally garnering interest from the investment community. Here are a few factors that make it attractive:
- Blockchain could help an organization become more efficient, unlocking higher profitability over time.
- Blockchain is getting some high-profile attention from big tech firms, such as Amazon and Salesforce.com .
- Because of COVID-19, the world is making a rapid shift to digital. Blockchain goes hand in hand with other adjacent technologies, such as cloud computing, e-commerce, and AI.
There are also risks to consider:
- A lot of new cryptocurrencies are out there with underlying blockchain projects, and many of them don’t pan out.
- Cryptocurrency prices can be highly volatile, and purchasing them may lead to loss of principal.
How To Invest In Blockchain In 5 Steps
The most direct way to invest in the blockchain is to buy cryptocurrencies, which use blockchain technology. If you want to invest in crypto, then follow these five steps to get started:
Choose your blockchain-based assets
Start by researching the various blockchain investment options. The most popular cryptocurrencies are currently Bitcoin and Ethereum, though you can invest in more than 6,000 different cryptocurrencies and countless non-fungible tokens . Pick the digital asset you think aligns best with your investment goals and risk tolerance.
Choose a cryptocurrency exchange or brokerage
You can purchase many different cryptocurrencies through popular crypto exchanges like Coinbase or brokerage firm like Robinhood. Each exchange and brokerage has a different fee structure and available assets.
Fund your cryptocurrency account with fiat currency
Your next step is to fund your cryptocurrency account using your local currency, such as U.S. Dollars. You can do that by linking your credit or debit card or even your PayPal account, depending on what is accepted by your account. Due to the unique risks of cryptocurrency, its best to avoid investing more than you can afford to lose.
Buy your chosen cryptocurrency
Once your deposit clears, which may happen instantly, you can click the buy button for any cryptocurrency available on the exchange.
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Is Bitcoin Safe And More Final Thoughts On Bitcoin
Bitcoin is an incredibly volatile but explosive asset. Thats why you might not need an aggressive allocation for bitcoin to have a considerable impact on your portfolio.
And given that bitcoin is near all-time highs at the time of this posts initial publication in January 2021, you might simply dollar-cost-average into your position. You might be offered lower prices in the future. But if bitcoin keeps rising, then youre making money on the way up. Thats not a bad deal, either. If youre interested in going deep into bitcoin, have a read of The Bitcoin Standard from Saifedean Ammous.
Given its explosive nature, you might develop an exit or rebalancing plan as well. I invested at a weight of 2% with plans to add more. But the recent surge in bitcoin price quickly took me to over a 6% weighting. I may trim the bitcoin holding when it reaches a 15% weighting, reducing it to 10%. When or if it moves to 15% again, trim back to 10%. Rinse and repeat. My risk is managed, as I am then in a very positive position at the very first trimmingeven if I were to lose the remaining position.
For me, it was a no-brainer risk-return proposition, but you will have to decide for yourself.
This post is not a recommendation for bitcoin or crypto investment advice. If you decide to invest, please ensure that you understand the risks, and the risk of permanent loss.
Dale Roberts is a proponent of low-fee investing who blogs at cutthecrapinvesting.com. Find him on .
The Potential For Bitcoin Investors
Bitcoin has delivered mind-boggling returns from its inception. If you consider it an asset or an asset class, it has been the best-performing for many periods over the last 10 years. The following table takes us to the end of November 2020. Bitcoin then went on to add another 50% in December of 2020.
Despite the jaw-dropping overall gains over time, bitcoin is incredibly explosive and incredibly volatile. To come up a winner, one would have to be prepared for some violent moves to the downside.
And given the volatility and explosive characteristics, bitcoin historically has made a wonderful portfolio asset. Hows that? There is very little correlation between bitcoin and other major assets. Thats exactly what were looking for when we seek portfolio diversification. We want non-correlated assets that will move in opposite directions.
Keep in mind though, that because bitcoin is still very volatile and explosive at its core, it will increase the overall volatility of a balanced portfolio. But historically it has boosted returns .
As CoinShares offers, using a 4% weighting in a balanced portfolio increased returns from 9.3% to 18.8%. The calculation is a 5-year period to the end of October 2020 .
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Buy Eth Futures On The Cme
Investors can also buy ETH futures on the CME, which launched early this year.
A futures contract is an agreement to purchase or sell an asset at a predetermined price and date in the future.
ETH futures provide another way to gain exchange-traded exposure to the price of ETH without owning the cryptocurrency. However, they are primarily used by active traders for short-term speculation or large investors looking to hedge their digital asset portfolios.
You can access ETH Futures on the CME through your broker but make sure you understand how futures work before adding ETH futures into your portfolio.
How To Invest In Blockchain
Along with its rapidly expanding user base, Bitcoin is now being considered for use by a number of financial services companies.
Paramount among the benefits offered by cryptocurrency is its ability to reduce the cost of transferring funds, particularly on a global scale. The impact of Bitcoin and the technology behind it on the finance industry has been likened to the disruption that the Internet caused in the music and publishing industries.
The good news is that opportunities for investing in blockchain technology abound, giving investors the chance to leverage the potential offered by this revolutionary technology. How the investor chooses to invest in blockchain technology will largely depend on the amount of risk they are willing to incur.
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Is Bitcoin Bad For The Environment
The digital currency uses as much power as the Netherlands every year, with just 30 countries using more energy, according to researchers from the University of Cambridge.
Computers that mine bitcoin use up to 1% of the worlds electricity supply.
While some of bitcoins consumption is renewable , fossil fuels are still being used to power the mining and servicing of the digital currency.
This is why electric car manufacturer Tesla has stopped accepting crypto payments, causing bitcoin to fall. Find out more in our Guide to eco-friendly cryptocurrencies.
Blockchain Is In Its Infancy
Blockchain technology has only been around for a dozen years, and businesses are still exploring new ways to apply the technology to support their operations. With the growing amount of digital data used in our lives, there’s a growing need for the data security, access, transparency, and integrity blockchain can provide.
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How Widely Accepted Is Bitcoin Today
In July 2020, Michael Saylor, the billionaire founder of MicroStrategy, an American corporation that offers software-based solutions to client companies, directed his company to hold part of its cash reserves in alternative assets. By September, MicroStrategys corporate treasury had purchased bitcoins worth $425 million. Square, the San Francisco-based payments company, bought bitcoins worth $50 million in October 2020. More recently PayPal announced that American users can buy bitcoins, as well as hold and sell it in their PayPal wallets. Every week we see more major financial institutions come on board.
The Future Of Blockchain
Just like any other technology, blockchain technology is thought to shape up the world by 2030. By this year, its thought that most governments will have adopted some forms of virtual currencies. This is because cryptocurrency is more efficient compared to traditional fiat alternative.
Blockchain technology is also thought to bring trillion-dollar protocols. Today, theres a race among top valued companies as to who will reach a market stock valuation of one trillion dollars.
Some of these top companies include Amazon, Apple, Google and Microsoft. All these companies represent the new economy whereby theyre showing that its easy to have a transition of physical businesses to digital businesses through online connections. Blockchain technology will shape and change this equation. This will reduce the cost of transactions.
Finally, blockchain is thought to identify solutions to different systems threats and problems. This will reduce the risk of security breaches, increase efficiency, reliability and self-sovereignty. Also, the asset identity platform in blockchain technology will collect, store and share data for virtual and physical assets.
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Blockchain And Its Use Cases
Originally, blockchain was created to facilitate secure and transparent financial transactions with bitcoin and subsequent altcoins. Over time, blockchain developers realized that the benefits of the technology reach far behind currency and transactions and can be used to improve everyday work processes in a number of industries.
Some of the key advantages of blockchain technology are:
The above benefits can lower operating costs for companies, thus increasing profit margins and making money for both companies and investors.
Many blockchain-based companies create solutions that will transform how whole industries work. Picking the right one now can lead to substantial returns on your investment.