Why Invest in Blockchain?

The advent of cryptocurrencies has brought along another phenomenon called Blockchain. Everyone is going crazy about the Blockchain at the moment and a lot of money is being invested in the sector. Still, many don’t have an idea what it is.

by Pavel Velichkov
05 February • 2 min
In Analysis

So What Is Blockchain?

People are slowly starting to understand the role cryptocurrencies will play in our short - (and probably long-) term future. The Blockchain phenomenon is of the same importance and magnitude with the only difference that the public is still struggling to cope with all the information on cryptocurrencies and is not paying attention to other factors that keep popping up.

Trying to explain what Blockchain is can be a difficult task. In the early 90s, people were trying to understand what the Internet is and what its future possibilities are. Even the wildest, most exhaustive guesses didn’t come close to being complete and fully accurate. There is no true answer, we still have no idea what the future holds for the Internet.

The situation is the same with Blockchain. What we know for sure so far is that while the Blockchain technology is the backbone of Bitcoin, Blockchain can exist separately from cryptocurrencies. Some companies have started investing in Blockchain and using it for different purposes, giving the first early examples of what it could do. IBM has started a food safety Blockchain service that tracks food from the farm to the store. The company has partnered up with Walmart, JD.com and the Tsinghua University in China. Usually tracking the food would take a week, but the latest IBM tests got a much better score – two seconds.

 

Utilization of Blockchain as a Technology

IBM might be the trailblazer in this direction. The end goal of their food safety program is to deliver a service asking customers to subscribe to their Blockchain and get better food safety. This is a very specific example, but it shows only one of countless other possibilities Blockchain could offer. Investors hope IBM’s program will kick the door open for other companies to roll out their own ideas on the market.

Blockchain has become a beacon of light for many of the biggest companies in the world who are trying to invest in the new big thing. The best option, such companies have found, is to invest in businesses that are already making a profit from Blockchain and are also developing new Blockchain systems for the future.

The power that the word Blockchain has nowadays is almost tangible. Companies from all over the world are reshaping their business models and simply adding that particular word to their portfolio (or their name) is enough for their stocks to go through the roof. On-Line PLC saw a 394% gain in just one day after announcing that they are getting involved with the Blockchain and crypto world, while Kodak enjoyed a 200% jump.

As we said, many companies have already started joining the Blockchain phenomenon and they’ve been keeping quiet for now. There are a lot of short-term and long-term risks and surely some of them are still trying to figure out how to use the new technology to their advantage.