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Blockchain - Part I & 2 - By TrendFollower

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Part I:

 

I am getting asked a lot of questions on Blockchain. I have promised many that I will start a post and begin putting down some of my thoughts for the IG Community to read and consider. If those who read do not agree or appreciate my thoughts then that is absolutely fine.

 

In my opinion (based on what I have read on the subject matter) then Blockchain is at the same level to where the Internet was during its earlier years. If Blockchain is applied successfully then it could make the Internet more decentralised which is how it was initially intended. I think it is the most important development since the Internet. For me in simple terms, Blockchain is a form of technology that can record transactions on a permanent basis which cannot be altered. This is extremely useful from an audit perspective. I can envisage most people checking and verifying information on the 'Blockchain'. It may well even replace the word database!

 

Blockchain is the technology behind Bitcoin and Cryptocurrencies. They exist because of the Blockchain technology behind it and underpinning it. From a technical perspective, Blockchain could be described as a back end database that maintains a distributed ledger. From a business perspective, Blockchain could be described as an exchange network for moving transactions, value, assets without any intermediaries. From a legal perspective, Blockchain validates transactions which replaces that historically trusted institutions / organisations.

 

One way of looking at Blockchain is merely an extension of the Internet. Those who appreciate the historical evolution of the World Wide Web will appreciate Blockchain and the journey it is heading towards. Just like the World Wide Web needs the Internet so too does Blockchain applications. The ambition is that they can bypass the Web and create a more decentralised version. This is one of the biggest promises of Blockchain technology. 

 

In all my time investing, my experience tells me that as a trend follower, the strongest impact for a trend or technology is whether it has a strong narrative. In my opinion, Blockchain, has an extremely strong narrative. The Internet too had a strong narrative. The most popular use of Blockchain technology has been Cryptocurrencies such as Bitcoin and Ethereum. In simplistic terms, Blockchain is like a very large database.

 

Blockchain is also very technical. I suggest anyone who is genuinely really interested to read books on Blockchain as that is the only way they can really even begin to understand the complexities behind Blockchain. I am keeping things very simple for the IG Community. However I will add more detail and specifics in future parts to this post.

 

Part II:

 

If one looks at Blockchain from a technology perspective then one will implement it as a technology. However, if one looks at Blockchain as a business change enabler then one will begin to think about business processes. It is only when one starts looking at different business processes where Blockchain could be applied to make it more efficient, effective, robust and quick that the markets around the world really do begin to open up in one's mind. 

 

I think what people forget is that Blockchain offers a genuine new way of implementing trust in relation to transactions. It is perfectly feasible to make an assumption that going forwards in the future it will be machines that will compute trust rather than it being verified by humans. I think from an evidential standard, it is not unreasonable to even suggest that proving that something did actually happen will be served by Blockchains. A lot of people will be aware of smart contracts and smart property. These in my opinion will be Blockchain's initial biggest drivers. 

 

I think the mainstream is simply not educated enough in the subject area to truly appreciate Blockchain and Cryptocurrencies. For example, if I had a rare vintage Swiss watch, expensive art, unique stamp or rare diamond ring then I would go to the relevant specialists and experts to get a true valuation of its worth. Blockchain and especially Cryptocurrencies are the same but the audience commenting on it may not have the specialist knowledge required to even understand what the true valuation could be for Blockchain and Cryptocurrencies. Why should a journalist, news reporter, mainstream media, person on the street, your neighbour, relative, friend or colleague be qualified to even comment that Blockchain and Cryptocurrencies are worthless and frauds. How can they without having the technical knowledge behind the subject area suggest that for example Bitcoin is going down to zero.

 

I will end this part by stating that we are beginning to accept that the future of cars is 'self-driving' and 'electric / hydrogen'. If we open our mind then we will begin to accept that the future of money is 'digital' and the way to move assets and conduct transactions around the world are going to be based on the 'Blockchain'. 

 

Part III: Coming Soon

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Looking forward to this! Not many comments but looks like a good number of people have read it.

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,

 

No I do not work for IG. 

 

I played a part in the creation of the Cryptocurrency and Blockchain section within the IG Community Discussion Forum. It used to be mixed within the FX section which I did not feel was appropriate. I put my suggestions to James (IG Community Manager) and he arranged for this new section to be created. 

 

I spread bet crypto's using IG's platform (profits are free from CGT), invest in crypto's using XBT's trackers. I also invest in blockchain related companies.

 

I do a lot of reading and research within the crypto and blockchain space and feel that the IG Community allows me the platform to share my knowledge and experience with those who may be interested.

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