Blockchain Investment – Five Keys For Your Consideration

FinTech, Innovation, Investing | September 10, 2018 By:

For a lot of people, blockchain is considered a fad. Everyone got so hyped up about bitcoin, invested, and then watched their investments float off into the wind as the cryptocurrency severely decreased in value over the past several months. As bitcoin’s value plummeted, a lot of people thought the fad was over, but here’s the truth. Blockchain technology is about so much more than cryptocurrency. It provides a decentralized storage solution that not only enhances investment projects but leads to huge breakthroughs in health care and other industries. If you’re considering investing in any type of blockchain project, there are five key storage qualities to consider before you make your investment.

Size of Network

A blockchain is a distributed system, and as with all types of systems, hackers love to hack them. With blockchain technology, though, their enhanced security actually feeds off of attacks, making them grow stronger. As assaults on the systems take place, minor flaws and vulnerabilities can be tweaked, causing the system to mature much faster than it would have had the attacks not taken place. However, a large network of users is required to ensure it has a massively distributed grid of nodes. More so, to guarantee the platform can be strengthened through adaptability and true governance. Without a large network, the robustness of the blockchain is extremely limited. This is why you must consider network size when wanting to invest in a blockchain project.

Smart Contracts

Crowdfunding blockchain projects are notorious for scamming people. We’ve seen time and time again how a fraudulent founder will raise hundreds of thousands of dollars through a blockchain project and then run off and disappear once it’s time to fulfill their promised mission. This occurs because their projects boast a problematic flaw — the authority of the capital raised is placed into only one set of hands — the founder’s hands. Smart contracts solve this problem.

A blockchain project worth investing in will feature smart contracts that overlay its storage capabilities. A smart contract serves as an added layer of protection to the data being stored and executed on the blockchain. Not only does it add protection, but it heightens the complexity capabilities of the transactions that can be exchanged by codifying the terms and agreements of the parties involved, making them responsible for their roles in the transaction. The smart contract itself comes in the form of a set of logic rules that are embedded into the blockchain as a coded script. Once the smart contract has been embedded into the blockchain, it then carries out its governing duties as an autonomous agent. The smart contract is permanently tamperproof and is not limited to application specific code only.

Team Composition

We’ve inherently come to believe that blockchain technology is a safer and more secure investment vehicle than anything else available. But what happens when you have a set of project leaders who know very little about blockchain technology hosting a blockchain investment opportunity? The result is a week system that isn’t protected by safe and secure storage of the data being exchanged. This is why you must always consider the team composition of the project. Who is hosting the project? What are the accomplishments and skill sets of the team members? Do they have much experience in cryptocurrency? How does the experience of each team member contribute to the overall objective of the investment project?

Use of Ethereum

There are different blockchains that an investment opportunity can be designed on. According to online sources, 91% of the world’s largest tokens are currently being circulated via market capitalization using the computing platform known as Ethereum. If you come across a blockchain investment project being hosted on a different platform, this means the team members hosting the project built their own decentralized blockchain, which is by far an impressive accomplishment. But still yet, it also opens up a whole new world of storage vulnerabilities when you start exchanging data on blockchains other than Ethereum. This isn’t to say, however, that other platforms don’t boast completely secure decentralized storage capabilities. Take the Lambda project for example. This high-speed blockchain project features a completely secure infrastructure that delivers infinitely scalable data storage capacities for decentralized applications, and it even supports multi-chain data cooperative storage, data privacy protection, cross-chain data management, and more. Founder of Lambda, Xiaoyang He, says, the company’s investment from Bitmain “a global industry leader is a significant endorsement and recognition of Lambda’s long-standing dedication in creating a world-class blockchain-based storage solution.”

Strong Infrastructure

A blockchain project worth investing in and through is going to feature an extensive structure that prevents anyone and everyone from accessing sensitive data; this means even the root users along with the administrators will not be granted access to sensitive information. Any time attempts are made to alter applications within the network, the blockchain should have security protocols in place that deny these illicit attempts. And lastly, the project should enforce careful guarding over the encryption keys by deploying today’s latest state-of-the-art security standards; this ensures the encryptions keys cannot be misappropriated.

Conclusion

Blockchain technology continues to increase in popularity among traders, miners, and just about everyone. Even startup founders are using the advanced technology to raise capital for their companies. In 2017 alone, the majority of $5 billion was secured through blockchain token sales to fund startups operating via the blockchain industry. During the first few weeks of 2018, more than $1 billion was raised through pre-sales and token sales. To say blockchain technology is starting to make waves through the economy would be an understatement — it’s impacting every aspect of the economy and we are seeing time and time again how the technology proves to be a viable fundraising alternative to traditional venture capital funding.