Review of Blockchain Investment Trends in 2018

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Blockchain has been one of the foremost technological investment trends in 2017 and appears to be in 2018 as well. In common terms, a blockchain is a growing list of records, called ‘blocks,’ which are interlinked and secured with cryptography. In more technical parlance, blockchain is a digitally distributed ledger where transactions between two parties are made in an efficient and verifiable way. The transactions are recorded publicly, consecutively and permanently.

Satoshi Nakamoto introduced the concept of blockchain in 2008 and it was later incorporated as a core component of the cryptocurrency Bitcoin. Since then, it has evolved and now has reached such heights in popularity that the total market capitalization of cryptocurrencies has gone up to $150billion (USD). The influence of the blockchain technology has fuelled renewed discussions about currency and value, centralized web delivery and digital governance of today’s internet. The reason for this growing interest in blockchain is related to its being largely untouched by intermediaries, brokers, and middlemen. The ever-increasing interest in blockchain is also connected to its potential to increase the efficiency of global supply chains, payment systems, and prediction markets and at the same time, to reduce the risk of financial fraud. The automated system of blockchain also has the potential to improve upon the time-consuming systems of tax collection, business incorporation, and risk management.

Recent technological investment trends have been dominated by Ethereum, an open source blockchain-based distributed computing system. In 2018, the price forecast of Ethereum has doubled its expectations and analysts have predicted a further rise in both usage demand and investment demand for it. However, for investing in Ethereum one needs a wallet, which is often unreliable and difficult to verify. Another way to invest in blockchain is through ICOs (Initial Coin Offerings), which come with inherent risks of their own. But ICOs can offer potentially long-term returns. More than 250 ICOs have been launched since January 2016, and by the end of 2017, these offerings had raised more than $2 billion.  Some companies launching successful ICOs have started receiving so much of money that over-capitalization is actually a cause of concern for them now.

The road ahead

Following this trend, it is possible that blockchain will remain the most profitable tech investment for the upcoming months, as more and more startups mature. Blockchain technology is finding its hold in sectors like banking and other financial services, IT automation, smart contracts and non-profit organizations. But due to the lack of a tried and tested legal framework, unclear property rights rules and other risks, contributors may take a cautious approach before participating.

As per a report published by World Economic Forum in 2015, ten percent of global GDP will be stored on blockchain technology by 2025. It appears that this trend is more than a passing fad.

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