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Blockchain and investment.https://Pexels.com
The time was, anyone who wanted to invest in the stock market used a broker. That broker provided investment advice and managed all operations. The reason, of course, was that brokers did the research and had access to information that the average single investor did not have.
All this has changed because technology has allowed individuals to access the same information that "big kids" have always had. Now, individual investors go through discount brokers for specific transactions. They continue to engage in institutional investments, through their 401K and through investments in large funds and products such as life annuities.
Enter cryptocurrency and its blockchain backchain technology. In the beginning, digital currencies were seen by institutional investors as "exotic fashion" – one to be avoided. They sat up and noticed, however, as Bitcoin and Ethereum gained value and, in 2018, seemed to achieve a more stable balance. Now, institutional investors, like Goldman Sachs, are development of investment products in cryptocurrency. This trend would infuse much more capital into digital currency markets, as well as provide greater "legitimacy" and transparency.
It is not just the growth of digital currencies that is destroying the traditional financial and investment industries. The same technology is completely changing the appearance of the investment. And here's how:
1. The cost of trading may decrease
A recent report by Oliver Wyman, an international financial services consultancy firm, has estimated that IT and operating costs in capital markets are close to $ 100- $ 150 billion a year, plus $ 100 billion additional in post-commission commissions. trading and securities services. These fees are transferred to customers in the form of front-end costs and annual administrative costs. Blockchain technology, with its transparent and immutable registration and storage of investment transactions, promises to significantly reduce these costs by capitalizing on public blockchains.
2. Reduction of settlement times
Traditional negotiation processes can take up to three days for payment. Blockchain technology has the potential to speed things up and reduce processing time to a day, or even a few hours. Though, public blockchains can become congested also due to some technological limitations codified in this technology & nbsp; – and this is a problem that developers will have to solve before attending a wider adoption.
3. 24-hour trading for global markets can be made possible
Currently, exchanges in each country have hours of operation. The US Stock Exchange, for example, is open from 9:00 am to 4:00 pm Eastern Time. Blockchain can "open" global markets to trade 24 hours a day, 7 days a week, eliminating the need to wait until a market opens to consume a trade.
4. Reduced fraud
The transparent system of registers, together with the immutability of any contract, document, trade recorded in a block, drastically reduces fraud or other illegal activities in the investment sector. This is further strengthened by digital currency investment groups and exchanges that integrate with KYC (Know Your Customer) compliance. Compliance has long been a requirement for traditional investments, but the verification process in the encrypted markets has lagged behind.
This is no longer the case. Cryptonomica offers an advanced KYC verification service, already used by Stex.com for the legal trading of cryptocurrencies in Estonia. Malta will soon start to grant licenses for cryptographic projects and Cryptonomica is already collaborating with the exchanges planned to launch in Malta. "Compliance that reflects that of traditional investments will add more transparency and confidence to the encryption markets, "he said Vadym Kurylovych, founder of Stex.
5. Tokenisation of resources can allow new types of investments
Suppose an individual has a baseball card worth $ 250,000 (yes, there are cards like that). He could sell partial investments in that paper through a blockchain tokenization process, which would be recorded and stored in an immutable blockchain environment.
Basically, with the help of blockchain technology, private equity trading can be "simplified" for P2P exchanges of the respective currencies that can be traded without any intermediary.
6. Change of Private Equity and Real Estate
Currently, private equity funds hold large sums of money from individual investors. This money is invested in start-ups, small scale companies, buyouts of companies in difficulty and in real estate. Investors put their trust in fund managers and pay for that trust. Blockchain has the potential to eliminate these brokers and provide a reliable means of investing individually and directly.
These six breaks are just the "tip of the iceberg" compared to how the blockchain will transform the investment world in the near future. Would it mean the definitive end of institutional investments? Probably not. But the "big boys" will have to embrace blockchain and use it to provide products and services that will make investors more and more experienced.
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Blockchain and investment.https://Pexels.com
The time was, anyone who wanted to invest in the stock market used a broker. That broker provided investment advice and managed all operations. The reason, of course, was that brokers did the research and had access to information that the average single investor did not have.
All this has changed because technology has allowed individuals to access the same information that "big kids" have always had. Now, individual investors go through discount brokers for specific transactions. They continue to engage in institutional investments, through their 401K and through investments in large funds and products such as life annuities.
Enter cryptocurrency and its blockchain backchain technology. In the beginning, digital currencies were seen by institutional investors as "exotic fashion" – one to be avoided. They sat up and noticed, however, as Bitcoin and Ethereum gained value and, in 2018, seemed to achieve a more stable balance. Now, institutional investors, like Goldman Sachs, are development of investment products in cryptocurrency. This trend would infuse much more capital into digital currency markets, as well as provide greater "legitimacy" and transparency.
It is not just the growth of digital currencies that is destroying the traditional financial and investment industries. The same technology is completely changing the appearance of the investment. And here's how:
1. The cost of trading may decrease
A recent report by Oliver Wyman, an international financial services consultancy firm, has estimated that IT and operating costs in capital markets are close to $ 100- $ 150 billion a year, plus $ 100 billion additional in post-commission commissions. trading and securities services. These fees are transferred to customers in the form of front-end costs and annual administrative costs. Blockchain technology, with its transparent and immutable registration and storage of investment transactions, promises to significantly reduce these costs by capitalizing on public blockchains.
2. Reduction of settlement times
Traditional negotiation processes can take up to three days for payment. Blockchain technology has the potential to speed things up and reduce processing time to a day, or even a few hours. Though, public blockchains can become congested also because of some technological limitations codified in this technology – and this is a problem that developers will have to solve before attending a wider adoption.
3. 24-hour trading for global markets can be made possible
Currently, exchanges in each country have hours of operation. The US Stock Exchange, for example, is open from 9:00 am to 4:00 pm Eastern Time. Blockchain can "open" global markets to trade 24 hours a day, 7 days a week, eliminating the need to wait until a market opens to consume a trade.
4. Reduced fraud
The transparent system of registers, together with the immutability of any contract, document, trade recorded in a block, drastically reduces fraud or other illegal activities in the investment sector. This is further strengthened by digital currency investment groups and exchanges that integrate with KYC (Know Your Customer) compliance. Compliance has long been a requirement for traditional investments, but the verification process in the encrypted markets has lagged behind.
This is no longer the case. Cryptonomica offers an advanced KYC verification service, already used by Stex.com for the legal trading of cryptocurrencies in Estonia. Malta will soon start to grant licenses for cryptographic projects and Cryptonomica is already collaborating with the exchanges planned to launch in Malta. "Compliance that reflects that of traditional investments will add more transparency and confidence to the encryption markets, "he said Vadym Kurylovych, founder of Stex.
5. Tokenisation of resources can allow new types of investments
Suppose an individual has a baseball card worth $ 250,000 (yes, there are cards like that). He could sell partial investments in that paper through a blockchain tokenization process, which would be recorded and stored in an immutable blockchain environment.
Basically, with the help of blockchain technology, private equity trading can be "simplified" for P2P exchanges of the respective currencies that can be traded without any intermediary.
6. Change of Private Equity and Real Estate
Currently, private equity funds hold large sums of money from individual investors. This money is invested in start-ups, small scale companies, buyouts of companies in difficulty and in real estate. Investors put their trust in fund managers and pay for that trust. Blockchain has the potential to eliminate these brokers and provide a reliable means of investing individually and directly.
These six breaks are just the "tip of the iceberg" compared to how the blockchain will transform the investment world in the near future. Would it mean the definitive end of institutional investments? Probably not. But the "big boys" will have to embrace blockchain and use it to provide products and services that will make investors more and more experienced.
