Blockchain gained importance in 2018, particularly in the corporate world. Despite the application of this innovative but innovative technology in different business spheres, many investors do not know it, except for those who find themselves in cryptocurrency transactions, according to a report on CNBC.
In a research conducted by the Software Equity Research unit at JP Morgan, the bank has appointed three overturned public companies as potential winners who can make the most of long-term innovative technology.
Integration of diffused accounting technology
Inspired by how software companies benefit from the use of artificial intelligence and machine learning, the US multinational Investment Bank believes that more companies will integrate blockchain technology into their processes in the future. The bank, however, has provided clients with a relatively unbiased prediction of the three public companies that they believe are able to create "opportunities for incremental material growth" from the use of technology.
Akamai, DocuSign and Ellie Mae
JP Morgan bets to change the status quo are "intermediaries moving opportunities" and "Blockchain as a Service" (Baas). According to the analysis, the three public companies that meet the criteria are Akamai, DocuSign and Ellie Mae.
J.P. Morgan assessed the US-based cloud delivery service provider, Akamai as "overweight" and claimed to be able to take advantage of the BaaS approach.
"Rather than building from scratch, we see customers looking to use a supplier like Akamai that offers its Blockchain capabilities as a service," said Sterling Auty, analyst of equity research software JP Morgan, in a note to customers.
"While there are a number of companies that have blockchain technology, IBM as an example, we believe that the considerable Akamai network is an inherent advantage in the execution of a register distributed in the blockchain."
The decentralized system of public blockchain is an inherent disadvantage which is a fundamental reason why J.P. Morgan also advocated the use of the closed and licensed blockchain commonly referred to as "private".
Unlike private networks, public blockchains such as Ethereum and Bitcoin allow anyone to read, write or participate. There is no one with overwhelming control over the network, which means that data can be invalidated even after it has been written on the network.
This is a problem that DocuSign seeks to address, as it claims that the company has the ability to connect a blockchain network to its standards-based digital transaction management platform. J.P. Morgan also voted as "overweight", arguing that he can exploit both public and private blockchains.
"DocuSign wants to be the platform to enable the entire digital bargaining process, over time we could see that most of the platform was based on a blockchain, essentially shifting its centralized security model to the distributed model of the blockchain ", noted Auty.
Ellie Mae, the third company, selected as the long-term winner, will benefit from the application of blockchain technology in the real estate sector that Auty has described as the most "obvious". Rated as "underweight" by JP, Morgan, Ellie Mae is a well-known software company known for the processing of thirty-five percent of mortgage applications in the United States.
Auty believes that the mortgage bank can use the distributed ledger technology to "manage the entire mortgage process could bring trust between the parties, and the use of smart contracts could help automate various activities (inspection, income / employment, verification) ".
JP Morgan describes Blockchain as the real deal
In March, JP Morgan published a report entitled "Unlocking Economic Advantage with Blockchain" which promotes the application of technology in the legacy business and asset management. The report also contained a timeline of adoption of evolving technology in the near future.
The report envisaged a paradigm shift in the way people relate to the financial sector.
He has declared:
"There is a growing awareness that distributed accounting technology – popularly known as blockchain – will bring a radical change in the way we think about financial resources and how the financial sector will operate in the future."
The report clarified four early stages of blockchain implementation that are the information sharing phase, the data solutions phase, the critical infrastructure stage and the completely decentralized stage. As these phases are bound to overlap, the report predicts that a truly decentralized economy will come to reality and therefore would see the blockchain replace the centralized models.