How Blockchain Will Affect Traditional Investing
In truth, cryptocurrencies have dominated the news during the last 18 months, thanks primarily to Bitcoin’s historic price run last year. Altcoins such as Litecoin have also generated significant interest among investors, however, while driving high levels of engagement across social media.
Although the interest in cryptocurrency investment remains largely speculative in the mainstream, there’s no doubt that the blockchain technology behind this marketplace is evolving at a rapid pace and continuing to disrupt a huge array of alternative industries.
In fact, blockchain is now emerging as the fastest-growing digital technology since the evolution of the Internet, with its distributed and immutable qualities promising to revolutionise the social and economic landscape.
From an economic and investment perspective, the only question that remains is how will blockchain disrupt the established order? Let’s find out:
From Stocks to Forex – Managing the Sale and Transfers of Shares
Blockchain has had an initial impact on the stock market, as it’s been more than two years since NASDAQ (which just so happens to be the second-largest stock exchange in the world) launched the ground-breaking LINQ platform.
This is a digital ledger that leverages blockchain to manage the entire process of issuing and managing private equity shares, creating a comprehensive and transparent set of records that has revolutionised a typically arduous and labour-intensive task.
This has also made the process of investing in shares more efficient and secure, and it’s little wonder that other exchanges have looked to integrate blockchain into their products and services in recent times.
NASDAQ continues to blaze a trail in this respect, however, with blockchain technology now used to underpin its own transactions and to support external marketplaces that are looking to integrate distributed ledgers into their business models. This has involved a number of innovative and crucial collaborations, including one particularly interesting partnership with Citigroup.
This banking organisation, which like many others previously banned the purchase of cryptocurrency through credit cards, recently collaborated with NASDAQ to develop an integrated payment solution that enables customers to trade securities internationally and in real-time.
This solution combines Citibank’s commercial, multi-currency payment network with NASDAQ’s blockchain technology, creating a futuristic platform that integrates cryptocurrency and enables investors to trade assets quickly, more efficiently and with minimal transaction fees.
Given the initial success of such collaborations, it’s little wonder that blockchain is now being used to introduce far greater efficiencies across a broader range of financial markets and asset classes. On a fundamental level, this technology makes it possible to trade various crypto token through virtual trading platforms like GKFX, creating a new revenue stream for investors and an opportunity to thrive in a volatile space.
Then there’s the mutual fund market, which has historically struggled as a result of inconsistent tracking methods and inefficient record keeping that involves a central authority and multiple intermediaries.
This translates into high volumes of duplication and user errors, which in turn triggers additional labour costs and makes it exceptionally difficult to track funds across multiple countries.
As a result of this, NASDAQ has restructured its own blockchain technology and applied it to this marketplace. It has initially focused its efforts in Sweden and neighbouring Nordic countries, as it attempts to reduce the risk of errors and duplication while presenting public and immutable records.
In theory, this should benefit individual investors in a number of ways, especially if the platform delivers quicker responses and drives more efficient mutual fund sales.
The Last Word
As we can see; blockchain is already having a seminal impact on investment across a number of different applications, from leveraging cryptocurrency in the pursuit of marginal gains to the way in which stocks and mutual funds are traded.
The core impact of integrating blockchain is also evident across these applications, with this technology capable of increasing efficiency, minimising the cost of investment and allowing rapid transactions that can capitalise on relevant market trends.