Smart Research28 Jan 2018 20:39
Apologies If already posted.
When it comes to investing, what is comfortable is rarely profitable.
Michael Davenport, Smart Research
26th January 2018
The fourth industrial revolution. The second machine age. The zero marginal cost society. These are some of the metaphors used to describe the current wave of technological innovations that are rapidly evolving.
Robotics and artificial intelligence are surging in use, being deployed en masse in production processes by the private sector. Newer technologies are also part of the innovation wave. At the forefront of these innovations is the blockchain, a new technology developed as one of the core pillars of Bitcoin; the first, successful, decentralised, peer-to-peer cryptocurrency.
Simply put, blockchain is what powers Bitcoin as a currency. Along with some cryptographic mining (for another article all together), blockchain allows the currency to become decentralised (in this case, that means without a central banking unit) because it keeps both a record of transactions and removes the problem of double-spending.
Viewed another way, all record keeping, as it stands today, has a feature of corruptibility and relies on a central authority to confirm veracity; but blockchain allows a complete ledger and history to be distributed, copied, and kept in an incorruptible state. Think of a record of anything that could, theoretically, be confirmed with 100 percent positivity. You could see when something was said, written, or confirmed or when money was sent, received, and traded; all without reliance on an institution. To this end, blockchain, as a standalone technology, has not only the power to revolutionise the international commerce chain, something that measures likely in the trillions of dollars, but also to disrupt the global economy and address many of the socio-economic and political issues that countries are facing today.
It�s no wonder, then, that banks, financial institutions and many others are adopting blockchain technology faster than anticipated.
IBM, that well-known American tech behemoth, released a report in 2016 suggesting that 66 percent of all banks will have blockchain in commercial production by 2020 and that the blockchain technology market, as a whole, will be worth $2.3 billion by 2021; increasing at a compound annual growth rate (CAGR) of 61.5 percent. In other words, there�s a wealth of opportunity to be had from this exciting and fast-expanding market.
Now, a word of caution; blockchain, as an investment theme, is uncomfortable. It is not for the risk-averse investor seeking normalised capital growth. Why? Because the technology is in its infancy, very few people actually understand the tech let alone appreciate its enormous potential. This makes publicly-listed, blockchain-focussed companies highly volatile in the short to medium term; a bit like the internet in 1985� Very few investors understood how it worked, but those who di
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