How Blockchain is Ushering Financial Markets Into Modern Finance

There are four technological revolutions which are currently taking the world by storm, Blockchain, Artificial Intelligence, Internet of Things and Big Data Analytics – some are intertwined, particularly the last three, leaving Blockchain chanting it’s own path.

Blockchain is unfolding a world of possibility that even movies 26 years ago did not predict, like they have been doing for decades with Robotics.

This technology has disruption in it’s DNA, that many financial companies that do not comply with this change, might run the risk of what happened to Kodak and Nokia.

Therefore, what is blockchain, what’s the noise about, does it really matter, and why should we be concerned about it.

Firstly, Blockchain is a digital ledger in which transactions made in bitcoin or another cryptocurrency are recorded chronologically and publicly. However, it is not limited to the financial sector, it has prospects of many sectors.

Bitcoin is a great example of it, as it operates on that platform. As this technology is catching fire, you find father and son (Don and Alex Tapscott) evangelizing the message of possibilities in this field. This blockchain got people like Floyd Mayweather excited, even considers calling himself Floyd 'Crypto' Mayweather – this comes from his involvement with Stox.com.

It’s like a gold rush, many companies are established around it – corporate companies are adviced to adapt unless startups will eat away their market share.

Then you find business ventures like Chankura.com founded in Africa, and headquartered in Silicon Valley; a crypto-currency exchange that began trading Bitcoin almost 2 years ago in South Africa and then launched in Ghana and Kenya, it is now entering the token/ Initial Coin Offering (ICO) market to list tokens such as of EOS (Market cap $295 million) and Civic ($100million). In 2017 alone the total amount raised in ICOs topped early stage Venture Capital investing with more than $2 billion raised so far.

Some of the latest biggest ICOs include Filecoin which is a decentralized shared encrypted storage promising to disrupt Amazon Web Services which raised $200 million in 60 minutes. Tezos, founded out of ZUG a Switzerland district known as the Crypto valley which is the home for Ethereum, the technology behind most ICOs with a current market cap of $28 billion.

ICO is a new way to raise money, a crowd-sale model for startups to raise funding used initially by blockchain companies like Ethereum. The Decentralized Autonomous Organization (DAO) which was initially used by SEC investigation to test whether ICO could be categorized as a security under the Federal Government Law - is one of the most noted ICOs which was intending to disrupt Venture Capital with the $150 million fund raised from individuals in different parts of the world.

This form of asset class gives low barrier to entry on the fastest growing technology investment for non-accredited investors such as Chankura.com’s founder Thabang Mashiloane has stated:

"ICOs are a different level of financial inclusion with the mission to bring global finance for anyone anywhere in the world with a smartphone and internet. Only the Crypto community understand this so far. There has never been a time such as this when innovation is instantly accessible by allowing even non-accredited investors partake in ownership of these platforms that are invented by some of the smartest people regardless of their net-worth. The believe that with this model of funding anybody even with a $50 budget will have equal access, and at the same time the wall street banker/hedge fund manager with a $50 million cheque will be able to participate in the ownership of the next Facebook or Google".

This is quite simple process with crypto-currency as you basically buy crypto-currency like Bitcoin or Ethereum through an exchange then convert it into the ICO token. Note that the token usually becomes liquid in just a few weeks after the ICO. You can sell it via an exchange at a market price.

Why they decided to go after the token market. "After meeting with a few tech luminaries in San Francisco to get an idea of where the Blockchain ship is heading, in almost every crypto-currency meet up they went, there was an ICO discussion and it seemed obvious that most startups are considering this crowd funding approach as a new way to fund their startups.”

There are many companies jumping on board to capitalize on this technological revolution – this is the best time to get in, in order to create value.

This post was published on the now-closed HuffPost Contributor platform. Contributors control their own work and posted freely to our site. If you need to flag this entry as abusive, send us an email.
CONVERSATIONS