How to Invest in Blockchain Stocks
Blockchain technology has recently gained a lot of popularity, and many people are finding ways to cash in on the growing industry. If you want to invest in blockchain technology, consider buying a blockchain stock.
Typically, the cryptocurrency market is based on speculations. Most people are still worried about what’s happening on the cryptos. This is because the digital currencies lack intrinsic value, unlike the blockchain technology stocks which possess a base business.
What is blockchain?
In simple terms, blockchain technology is a peer to peer application that which allows fixed or immutable transactions only. These fixed transactions are combined into blocks. All these blocks are time-stamped and also appended to one another to form a chain that never ends.
A blockchain is essentially a decentralized database that’s used in recording all transactions which happen in the network. Most professionals refer to it as a form of public ledger.
On the other hand, blockchain stocks can be defined as the shares in companies that use blockchain technology to create applications. It’s essential to understand that there’re very few pure-play blockchain stocks that are listed on some major stock exchanges.
However, due to the rising number of industries trying to adopt the blockchain technology, more and more companies are developing blockchain-based applications.
Reasons to invest in blockchain stocks
Making money in blockchain stocks isn’t something you can do overnight; it requires both time and effort. Although every investment has its own risks, investing in blockchain stocks has some advantages as follows:
1. The blockchain ledger technology provides an excellent platform where stocks, currencies, commodities and bonds will be tokenized.
2. The use of blockchain technology speeds up the entire process of settling transactions.
3. Blockchain addresses the problems of data security and privacy. When there’s increased transaction security, the whole trading environment becomes efficient.
4. Blockchain technology can solve the issue of inside trading. To fix the insider trading problem is a huge deal. Fixing this problem creates a fair playground for all investors.
How to buy a blockchain stock
Before you decide the type of blockchain stock to invest in, it’s essential to consider the facts below:
a. Consider purchasing the top blockchain stocks only which develop genuine blockchain technology.
b. All investments have risks, and therefore, you should only invest in well-established firms which won’t disappear overnight.
c. Research is key. The more you understand what’s going on, the more likely that you’ll have a better chance of getting the winning lists of stocks to invest in.
To be in a more safe position, consider tech giants such as Google, NVIDIA, IBM, Hitachi, Bank of America etc. They all offer numerous opportunities for crypto investors. The process of buying blockchain stocks is similar to that of buying other stocks. If you want to ease the process, it’s advisable to begin by learning the process of trading online stocks.
Where to buy blockchain stocks
As an investor, it’s essential to perform intensive research before you decide to invest in blockchain stocks. Additionally, you should also note that the majority of the pure-play stocks are usually traded on the OTC market. You can purchase blockchain stocks via online brokerage companies like:
- eTrade
- TD Ameritrade
- Scottrade
- Ally Investment
- Webull
These are the most common blockchain stock trading firms, especially for beginners. Alternatively, if you’re willing to trade directly with your iPhone, consider using the commission-free stock trading application, Robinhood. This is a US-based crypto trading app that allows the trading of crypto-related stocks without any charges.
Blockchain public companies
Below are some top public companies where you can make blockchain investments:
1. IBM
IBM was the first company to offer blockchain as a service for both small and large businesses. It’s making businesses to make money quickly without a huge investment. For instance, Walmart uses IBM for its supply chain to ensure food safety.
2. Amazon
This is another big player offering blockchain stocks. Although Amazon is well known for its e-commerce services, it’s not where their most profits come from. Amazon has their BAAS solutions centralized and distributed. The use of blockchain makes it much easier for businesses especially shippers, growers and supply chain.
3. NVIDIA
NVIDIA is a company based in Northern CA. Mined currencies such as Ethereum, Bitcoin, and Litecoin require the miners to have in hand machines with fast and high memory chips. The chips types that dominate the market are GPU and ASIC.
4. Bitmain
Is a company based in Hong Kong. It’s known to mine Bitcoin blocks and has filed for an IPO but currently isn’t trading publicly..
The future of blockchain
Just like any other technology, blockchain technology is thought to shape up the world by 2030. By this year, it’s thought that most governments will have adopted some forms of virtual currencies. This is because cryptocurrency is more efficient compared to traditional fiat alternative.
Blockchain technology is also thought to bring trillion-dollar protocols. Today, there’s a race among top valued companies as to who will reach a market stock valuation of one trillion dollars.
Some of these top companies include Amazon, Apple, Google and Microsoft. All these companies represent the new economy whereby they’re showing that it’s easy to have a transition of physical businesses to digital businesses through online connections. Blockchain technology will shape and change this equation. This will reduce the cost of transactions.
Finally, blockchain is thought to identify solutions to different systems threats and problems. This will reduce the risk of security breaches, increase efficiency, reliability and self-sovereignty. Also, the asset identity platform in blockchain technology will collect, store and share data for virtual and physical assets.
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