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‘The’ Blockchain – Reshaping the
World of Business
The first generation of the digital revolution
brought us the Internet of information. The second generation — powered by blockchain technology — is bringing us the Internet of value: a new platform to reshape the world of business and transform the old order of human affairs for the better.
I’m reasonably confident … that the blockchain will change a great deal of financial practice and exchange … 40 years from now, blockchain and all that followed from it will figure more prominently in that story than will bitcoin.
Blockchains come in many shapes and sizes – permissioned vs permissionless, proprietary vs open source, and with a sometimes confusing array of consensus mechanisms underpinning their core functionality. So how does one choose a direction that’s right for different financial applications? Determining how data transparency vs privacy and security plays a role in blockchain choice. We will discuss those topics, and so many more! But, let's get acquainted.
A Blockchain is a distributed ledger of unchangeable, digitally recorded data. Data of any type can be recorded in a blockchain: financial transactions, titles to real estate, etc. Unlike a traditional database housing the same data, a blockchain does not have to rely on a centralized administrator.
These are the use cases where blockchain technologies can be applied to improve efficiency or unlock capabilities for new technologies.
Overall blockchain related venture capital funding just crossed over the $1 Billion mark. This method of blockchain investing can have various levels of entry, with initial seed investments (as little as $5,000), up to Series A investments ($1M+). Venture capitalists can play a more dynamic role, such as providing mentorship and/or providing introductions. If a company is able to drive growth with promising results, a venture capitalist may opt to become a partner in the company, owning equity and joining the company’s board.
Cryptocurrency is the next evolution of money. We know that in ancient days, commodities essential to daily living were considered money (e.g. cows and chickens) and traded among micro-economies. Then the modernization of society and urban cities brought the need to track money and value across large territories of land, which resulted in the birth of paper and coin money issued from the ruling governments. A quarter of a century ago, an invention called the world wide web made it possible for people to buy and sell virtually anything, to anyone around the world using bank-issued credit cards, which are a substitute for paper and coin issued currencies and provide electronic payment. Finally, several years ago, a new form of money that is native to the internet was born – cryptocurrency. Below we explore what this new type of money is, how it works, and how you can get involved.
Cryptocurrencies
can be thought of as a new type of digital commodity or digital money. They can act as a fuel for distributed ledger networks and also be used as mediums of exchange to purchase goods and services. Depending on intent, cryptocurrencies can also be treated as an appreciating long-or-short-term investment. Cryptocurrency values have been subject to extreme periods of volatility (in some cases up to 20%±), creating both risk and opportunity. As such, it is a worthwhile effort to perform in-depth due diligence before making any investments in cryptocurrencies.
Chuck Reynolds
Contributor
