How to Invest in Blockchain?

Published : 6 years ago, on 29/08/2018

Bitcoin is a popular cryptocurrency, which is making waves in the market.  One more cryptocurrency in the news is Libra, that Facebook proposes to launch shortly. Both these cryptocurrencies use a technology called blockchain. This is a technology that works through a chain of blocks, where blocks represent digital information. The blocks store information related to online transactions carried out. The block stores information of the digital signature of the person carrying out the transaction, with a unique hash code to identify the transaction.

Blocks are all linked together in a chain. Whenever a transaction is carried out, there are millions of copies of this blockchain created. This makes it virtually impossible to manipulate a transaction after it has occurred. This is the reason for the popularity of blockchain. It is a highly secure way of carrying out transactions. It is not even possible for a hacker to hack a block and change it as changing one block would have a cascading effect on other blocks, making hacking difficult.

Crypto-currency is not the only application of blockchain. It can be used in banking to carry out financial transactions. It can be used in healthcare to store patient data. Other applications of blockchain are in elections to store records of voting, to store property records, and to manage identities of people. The future of blockchain is very bright.In the years to come, this would be one of the most popular technologies. This is the reason why you can consider investing in blockchain as it is the technology of the future.

Here’s how you can invest in blockchain and look forward to earning returns on your investment.

1. Buy stocks of blockchain companies

There are a number of blockchain companies that use blockchain technology to create products. The growth of blockchain will help these companies to do well. If you buy stocks of these companies, you can hope that the value of the stock appreciates over time. Buying stocks of blockchain companies is the best way to invest in blockchain. Like all stock market investments, there is a risk involved, which you should be ready to accept.

Most blockchain companies are new and investing in them can be risky. If you are risk-averse, you can invest in top companies that are using blockchain technology. These companies are not exclusively involved in blockchain, but it is a part of their business in one way or another. FedEx, IBM, Microsoft, and JP Morgan are top companies using blockchain. Investing by buying stocks of these companies is one way of investing in blockchain.

2. ETFs

An ETF is an exchange-traded fund. It is like a mutual fund but is traded on the stock exchange. You can buy Blockchain ETFs to invest in blockchain. Just like stocks, the value of ETFs is likely to go up as the technology becomes popular and accepted worldwide. You can research the top Blockchain ETFs and compare their performance before deciding where to invest your money.

3. Cryptocurrency

Apart from bitcoins, there are many other cryptocurrencies in the market. You can buy these cryptocurrencies from any of the leading cryptocurrency exchanges. Since cryptocurrencies use blockchain, buying them is one way of investing in this technology. However, cryptocurrencies are extremely volatile, and their prices can fluctuate a lot. You canpotentially earn handsome profits when you buy cryptocurrencies. You can also end up making huge losses. It is a high-risk investment that you should make only if you can tolerate the risk.

4. Invest in startups

Instead of buying stocks of blockchain companies in the stock market, you can consider becoming an investor of a startup company. This is the age of startups, where people with innovative ideas are starting new ventures. Blockchain presents a great opportunity for startups. They can come out with innovative products and solutions using blockchain. Since blockchain is the technology of the future, these startups are likely to grow by leaps and bounds.

You can invest in these startups by providing them funds and getting shares in return. This can be a good investment, as you will be investing in the company at an initial stage. If the company grows, you can expectgood prospects from your investment. However, you need a substantial amount of money to invest in a startup. There is also a possibility of startups closing down due to various reasons. If that happens you can end up with huge losses. A thorough analysis of the revenue model of the company has to be done before investing in it.

The above are some ways by which you can invest in blockchain. If you are impressed with blockchain technology and the potential it offers, you can consider investing money. It could turn out to be a good investment for the future.