Cryptocurrencies, which are built upon blockchain technology, have had a rough time of it ever since the crypto peak in November of 2021. The so-called crypto winter persists and investors in the broader crypto realm are confronted with questions like whether or not Bitcoin will follow the Nasdaq back up whenever the Fed is finally done raising interest rates and a recession is either avoided or endured. For that matter, will Nasdaq recover to its former levels with big tech companies laying off workers and tightening their belts? Looking forward, investors may wish to invest in practical applications of blockchain instead of speculating on the values of cryptocurrencies.
How Can You Invest in Blockchain Technology?
Successful long term investors like Warren Buffett never invest in any company or investment niche until they understand what companies do to make money and how their business plans are likely to generate consistent income year after year. If you apply this thinking to the blockchain you need a basic understanding of how the blockchain works. Then you need to understand how practical applications of blockchain by various investable companies or sectors will likely generate profits now and for years to come.
How Blockchain Works
Blockchains are databases. Unlike databases that are located on a central server or on an individual computer, a blockchain database is distributed across multiple computers and/or servers. A blockchain contains a steadily growing list of records called blocks which are ordered and linked via cryptography. Each block contains information that links it to the previous block (timestamp, transaction data, a cryptographic hash of the prior block). It is this interconnected nature of the block of data that makes the blockchain records unalterable without consensus of the network and alteration of all following blocks in the record. These features make the blockchain transparent and fair and save many businesses time and money.
Why Invest in Practical Uses of the Blockchain?
As cryptocurrencies have fallen over the last year or more a couple of things have happened. Regulation of large parts of the crypto realm once thought unlike are now already happening or certain to happen. Investors have lost money due to poor business management and outright fraud. Not matter what someone thinks about have decentralized finance, multiple investible crypto token, NFTs, or the Metaverse (which all use cryptocurrencies and are supported by blockchain technology), people are not happy about losing their investments and, at that point, are happy to see the businesses that lost their money held accountable after the fact and, ideally, prevented from losing their money before the fact by competent regulation! It has been our opinion for some time that cryptocurrencies and the various uses of cryptocurrencies and the blockchain will not dry up and go away. Rather the crypto and blockchain world will recover and grow but it will be the parts of this world that generate income for investors that will thrive. Here is where we start looking for examples of practical and profitable applications of blockchain and companies or niches to invest in.
Examples of Practical Blockchain Applications
We looked around and found several good examples of businesses using blockchain for practical and profitable uses. Businesses are using the blockchain to transfer money, enhance identity security, make logistics more secure, create smart contracts, and for healthcare applications in addition to use in NFTs, decentralized finance, and cryptocurrencies.
Healthcare Blockchain Applications
A company that used blockchain contracts to make medical information more secure both for patients and treatment providers such as doctors, clinics, and hospitals in BurstlQ. Their smart contracts define which data can be displayer or shared and in what manner. Their system even displays personalized health plans for individual patients. As the US population ages the health care investment niche will grow and we expect companies using the blockchain to facilitate more secure information storage and retrieval to grow and prosper as well.
Protection of Performance Artist Royalties
This is the sort of niche business that we expect to evolve as blockchain uses grow. A company called Mediachain helps musicians receive the royalties they have a right to by using smart contracts that are transparent and secure. This company was taken over by Spotify in 2017. This may well be the case with many startup companies finding unique ways to profit in the blockchain world. Investors who get in early will likely see impressive profits as companies are bought out.
All of the Variations of Decentralized Finance
The are many companies working in decentralized finance. Dfinity is a San Francisco-based company that runs an open source network where users can build smart contracts and other decentralized apps both small and large. Their business involves network services where smart contracts can be stored online, utilized without tokens or wallets or transferred directly to the developer’s own site. Unlike the DeFi businesses that have gone bankrupt, this approach does not involve holding other people’s money or getting involved in dollar vs token loans. It is similar to the old saying from the gold rush days. When everyone is digging for gold, the best money is in selling picks and shovels!
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