Investing in blockchain is not a new idea, but the concept is being embraced by many in the sector, especially the early stage of the space.
The biggest challenge to investment, however, is its regulatory environment, said David Hynes, the head of investment strategy at investment firm FTSE 100 index provider Fidelity Investments.
“The regulators are very conservative in this area,” Hynes said.
“They don’t like anything to do with digital assets.
It’s very much a grey area.”
Investors looking for a secure, untraceable form of money are looking for an asset that’s highly regulated, and the blockchain-based tokens are a promising alternative.
“I think this is the perfect way to get started,” said Hynes.
“You can buy a lot of stuff online, so there’s a lot that’s on the market already, and if you have the ability to trade it, you can get a lot more value out of it.”
It’s a new eraFor many, the future of blockchain is bright, and a growing number of startups are taking a crack at this nascent technology.
The company behind Ripple, Ripple Labs, has raised more than $1 billion, with investors including investors in Facebook, IBM and Oracle.
But the technology is still in its infancy, and its potential is limited.
For example, there are no public records for the tokens sold to investors, and they’re not subject to any regulatory oversight.
This has led to some controversy, with critics claiming the technology may be illegal, or even a crime.
“This technology is a very nascent technology,” said Ryan Maue, founder of the blockchain incubator BitBeat, in a recent interview with CoinDesk.
“The blockchain is really very new, and there’s lots of work to do, but at least the founders have an idea of what they want to build.”
And they have a great idea.
“While the tokens are secure, they are still subject to regulatory oversight and, as such, investors will need to take the time to research the securities laws in their own jurisdiction.
That’s something that is a concern for many investors, with a recent report finding that investors are often underrepresented in blockchain-related securities filings.”
There are some pretty high barriers to entry.””
But it’s really important to take this seriously.
There are some pretty high barriers to entry.”
To help companies like Ripple Labs find their footing, Hynes believes that companies are starting to get the message that it’s time to start investing in the blockchain space.
“There are a lot [of] startups in this space that are trying to get their head around this technology, and I think the fact that the industry is taking this seriously is great,” Hines said.
The technology can’t be regulated and there are still a number of issues to work out with the technology, including how to deal with scalability issues, he added.
“If you think about it from a technology perspective, the only thing that’s really going to make it really secure is an audit trail,” he said.
“But you can’t just build your own blockchain and say it’s secure.
You have to build it from scratch, and it’s going to be hard.”
Read more:Investors will have to spend more time researching the securities law in their jurisdiction.
According to FTSe 100 Index Provider Fidelity, there’s no guarantee that blockchain tokens will be safe.
“There’s no one audit trail that can guarantee that an investment in a token is not fraudulent or fraudulent-looking,” said FTSC’s Hynes in an email.
“Therefore, investors should take this time to learn more about the securities and investment laws and how they apply to blockchain investments.”
Hynes, however is optimistic about the potential for blockchain to become a huge part of the investment ecosystem, as he believes that it can lead to an industry that is more transparent and transparent-looking.
“While it’s still in the early stages, there will be lots of excitement around this space,” he added in an earlier interview.
“We are seeing a lot in the technology and we’re seeing a ton of companies trying to innovate and to create value.
I think it’s just going to take a lot to put this to the test.”
Read the full article on Business Insider UK.
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