Most of us know about blockchain thanks to bitcoin. Blockchain technology offers a way for untrusted parties to reach agreement (consensus) on a common digital history without the use of an intermediary.

At its most basic levels, the blockchain uses cryptography that allows each user on the network to add information to the chain securely. When a user enters a new block of data, it is verified by the rules of the blockchain (mathematical algorithms) based on information already stored on the chain. If the majority of the users agree that the transaction matches the blockchain history, the transaction is approved and the ledger is updated with a new block in the chain.

Other competing technologies, with one of our favorite being IOTAs technology, have tried to become relevant, but blockchain still rules the day.

The blockchain has three keys that make its tech so appealing:

Decentralization: Rather than storing data with a single source or server, the data resides on hard drives and servers all over the world. The lack of a central data hub ensures that no single entity controls the data and makes it more resistant to cyber- attacks.

Efficiency: Blockchain offers the potential to significantly speed up the settlement of transactions. Transactions can be validated 24/7 and payments settled in a matter of seconds. By comparison, cross-border payments can currently take up to 5-days to validate.

Eliminates Intermediary: Blockchain “cuts out the middleman” by establishing a mechanism to establish trust and security. This has important implications from a cost and transaction fee standpoint.

There are many companies you can invest in, or you can consider an investment in an ETF to gain exposure

Symbol ETF Name Total Assets ($MM) Inception Expense Ratio # of Holdings % In Top 10
BLOK Amplify Transformational Data Sharing ETF $172 1/17/2018 0.70% 53 46.65%
BLCN Reality Shares Nasdaq NexGen Economy ETF $106 1/17/2018 0.68% 59 23.21%
LEGR First Trust Indxx Innovative Transaction & Process ETF $14 1/24/2018 0.65% 68 34.19%
KOIN Innovation Shares NextGen Protocol ETF $4 1/30/2018 0.65% 40 56.78%

We think these plays offer less risk than a single investment, and far less risk than investing in a single cryptocurrency

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