We believe Blockchain has the potential to impact the world as much as the internet did in the 1990’s and become the next big infrastructure of innovation.
The technology is simply a decentralised secure database or digital ledger that keeps a continuously growing list of data records, agreements, contracts or transactions (blocks), that occur on a peer-to-peer (P2P) network.
By allowing digital information to be distributed but not copied or edited, blockchain technology has created the backbone of a new type of internet.
Similar to the impact mobile phones have on photography, the transformational technology that is blockchain, has delivered digitisation (photos are no longer primarily on film or paper), dematerialisation (virtually every smartphone has a camera app), demonetisation (it costs virtually nothing to replicate or transfer photos) and democratisation (everyone can now become a photographer).
These changes – initially deceptively small – have compounded at an exponential rate.
But It’s Not Bitcoin
Blockchain is however NOT Bitcoin, but simply the powerful technology used by Cryptocurrencies like Bitcoin, similar to how email uses the internet.
As the technology continues to evolve, and being nearly impossible to tamper with, we are seeing more and more companies across a variety of industries and sectors using the technology to enable the real-time transmission of information and data.
As Blockchain is decentralised, it makes it a global phenomenon that allows developers all over the world to work with and explore the technology.
It connects the digital world and has formed a new infrastructure for innovation within multiple industries globally.
Blockchain is nearly impossible to tamper with, making it increasingly more invaluable, in a world of constant cybersecurity threat.
The Real World & Blockchain
In the real world and away from the technical digitalisation sphere, Blockchain technology has many facets and capabilities. To show its diversity, Blockchain technology helps connect with the cloud, makes global payments easier via digital networks, monitors aircraft components to enhance safety, aids the sustainable optimisation of farming resources, and is even used to combat child labour in the Congo by more easily tracking the essential minerals used in smartphones and electric cars.
Blockchain as a Thematic Investing Opportunity
At its core, thematic investing is about identifying powerful macro-level trends that will potentially yield the growth stories of the future while providing two types of service: generating exposure to an investment thesis and simpler way of expressing it, and effectively trading/investing in a number of securities in one trade.
With this single transaction, the client gains exposure to a group of companies tied together by a theme rather than their country of domicile, sector classification or exchange listing.
In these early days of Blockchain, the technology’s impact on the top and bottom line of many companies can seem small, BUT if history is any guide, any change, could happen very fast. Our world today would be unrecognisable to Rockefeller, and Warren Buffett’s awe is that it only took a single lifetime. At the current pace of change, the next radical changes may take even less.
We see great legitimacy in the Blockchain revolution, and feel it has the potential to change technological infrastructure and have as much an impact on the world as the internet did in the 1990’s.
Author: Gregg Guerin, Senior Global Product Specialist. First Global Portfolios is a leader and pioneer in providing transformational technology ETF solutions, and to find out more on please visit www.ftglobalportfolios.com