Tuesday, December 12th, 2017

How Can You Make Money from Blockchain Technology?

 

Bitcoin has been a great deal for some investors who got in early. But many believe that the bitcoin phenomenon is simply the 17th century Dutch tulip bulb frenzy in disguise. Nevertheless, bitcoin is based on an interesting technology called blockchain. And blockchain technology has caught the attention of banks and other institutions because of the way it allows people to transfer value without a middleman. The point about how you can make money from blockchain technology instead of speculating in bitcoin is that you can invest in companies that use this technology or a new index fund containing just such companies. Business Insider writes about stock in a new blockchain index.

Exchange operator Nasdaq and Reality Shares, an investment marketplace, unveiled a new index on Monday designed to capture the growth of blockchain technology.

The smart-beta index called the Reality Shares Nasdaq Blockchain Economy Index, is planned to provide the basis for an exchange-traded fund by Reality Shares, according to a press release about the new index. The ETF has already been filed with the Securities and Exchange Commission by Reality Shares.

Blockchain is best known for being the technology underlying cryptocurrencies like bitcoin, but it could have applications outside of cryptocurrencies.

Blockchain insiders say that blockchain will do for the transfer of value what the internet has done for the transfer of information. How can you make money from blockchain technology? You can go out and learn how to use it and be a bitcoin miner to make money but this requires a lot of technical skill and will turn into a full time job. Or you can invest your money in companies that use the technology to transfer money. Picking the winners in new field like this can be difficult so a better choice might be to buy shares in the blockchain index to diversify your risk.

Does This Technology Work as Promised?

The basis of investing in a new technology such as blockchain is premised on the belief that it will function in such a way as be useful and profitable. But what if there are fatal flaws that no one is telling you about? Blockchain is a computer based technology so we looked at what Computerworld has to say about it. They list the top 5 problems with blockchain.

While the technology has great potential, CIOs and their business counterparts who are exploring blockchain should expect setbacks in deploying it, including the real possibility of serious software bugs and risks posed by quantum computing, according to a new report from Forrester Research.

Experts and analysts also warn that the technology isn’t a fit for every transactional business process.

For example, Bharath Rao, founder of Ethereum exchange Leverj, is skeptical of blockchain applications outside of cryptocurrencies; he argues that it’s slower and more expensive to deploy than traditional transactional technologies such as a centralized relational database.

What these folks are saying is that blockchain gives you autonomy but takes away efficiency. Because blockchain requires the updating of every chain of custody of an item of value since its inception it can make a simple transfer very time consuming compared to a simply data base controlled transaction.

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