If you have been following banking, investing, or cryptocurrency over the last ten years, you may be familiar with “blockchain,” the record-keeping technology behind the Bitcoin network.

And there’s a good chance that it only makes so much sense. In trying to learn more about blockchain, you’ve probably encountered a definition like this: “blockchain is a distributed, decentralized, public ledger.”

The good news is that blockchain is actually easier to understand than that definition sounds, and we are going to be discussing it extensively in this article.

• What is Blockchain?
• What Are Cryptocurrencies?
• Do All Cryptocurrencies Use Blockchain?
• Can You Use Blockchain Without Cryptocurrency?
• Is Blockchain and Bitcoin The Same?
• What is a Blockchain Wallet?
• Blockchain Technology in Banking
• Blockchain Transactions
• Blockchain Applications
• Blockchain Companies
• Types of Blockchain
• Can You Invest in Blockchain?
• Can Blockchain be Hacked?
• Which is Better Coinbase or Blockchain?
• Who Owns The Blockchain?
• How do I Buy Stocks in Blockchain?
• Does Amazon Use Blockchain?

What is Blockchain?

blockchain is literally just a chain of blocks, but not in the traditional sense of those words. When we say the words “block” and “chain” in this context, we are actually talking about digital information (the “block”) stored in a public database (the “chain”).

Read Also: A Comprehensive Guide to Trading Bitcoin

“Blocks” on the blockchain are made up of digital pieces of information. Specifically, they have three parts:

1. Blocks store information about transactions like the date, time, and dollar amount of your most recent purchase from Amazon. (NOTE: This Amazon example is for illustrative purchases; Amazon retail does not work on a blockchain principle as of this writing)
2. Blocks store information about who is participating in transactions. A block for your splurge purchase from Amazon would record your name along with Amazon.com, Inc. (AMZN). Instead of using your actual name, your purchase is recorded without any identifying information using a unique “digital signature,” sort of like a username.
3. Blocks store information that distinguishes them from other blocks. Much like you and I have names to distinguish us from one another, each block stores a unique code called a “hash” that allows us to tell it apart from every other block. Hashes are cryptographic codes created by special algorithms. Let’s say you made your splurge purchase on Amazon, but while it’s in transit, you decide you just can’t resist and need a second one. Even though the details of your new transaction would look nearly identical to your earlier purchase, we can still tell the blocks apart because of their unique codes.

While the block in the example above is being used to store a single purchase from Amazon, the reality is a little different. A single block on the Bitcoin blockchain can actually store around 1 MB of data.

Depending on the size of the transactions, that means a single block can house a few thousand transactions under one roof.

What Are Cryptocurrencies?

A cryptocurrency is a digital or virtual currency that is secured by cryptography, which makes it nearly impossible to counterfeit or double-spend.

Many cryptocurrencies are decentralized networks based on blockchain technology—a distributed ledger enforced by a disparate network of computers.

A defining feature of cryptocurrencies is that they are generally not issued by any central authority, rendering them theoretically immune to government interference or manipulation.

Do All Cryptocurrencies Use Blockchain?

Blockchain forms the bedrock for cryptocurrencies like Bitcoin. As we explored earlier, currencies like the U.S. dollar are regulated and verified by a central authority, usually a bank or government.

Under the central authority system, a user’s data and currency are technically at the whim of their bank or government.

If a user’s bank collapses or they live in a country with an unstable government, the value of their currency may be at risk. These are the worries out of which Bitcoin was borne.

By spreading its operations across a network of computers, blockchain allows Bitcoin and other cryptocurrencies to operate without the need for a central authority. This not only reduces risk but also eliminates many of the processing and transaction fees.

It also gives those in countries with unstable currencies a more stable currency with more applications and a wider network of individuals and institutions they can do business with, both domestically and internationally (at least, this is the goal.)

Can You Use Blockchain Without Cryptocurrency?

Absolutely. Cryptocurrency is one application of blockchain, and in fact the original application, but the technology has many applications. Essentially a blockchain is a distributed ledger, which means its a record of transactions.

Cryptocurrency is one thing you could keep track of in the ledger, but you could also keep track of other assets, like real estate, or company shares. You could keep track of any data really.

You can use blockchain to create self sovereign digital identities that help the user maintain control of their own data.

There are many applications of the blockchain beyond cryptocurrency. The value of, and therefore hype around, cryptocurrencies is primarily speculative in nature.

There’s nothing inherently valuable about any cryptocurrency – like with any currency, it’s value has to do with our faith in it.

The real value from blockchain will likely come from applications that have little, if anything to do with cryptocurrency.

Is Blockchain and Bitcoin The Same?

Bitcoin is a type of unregulated digital currency that was first created by Satoshi Nakamoto in 2008. Also known as a “cryptocurrency,” it was launched with the intention to bypass government currency controls and simplify online transactions by getting rid of third-party payment processing intermediaries.

Of course, accomplishing this required more than just the money itself. There had to be a secure way to make transactions with the cryptocurrency.

Bitcoin transactions are stored and transferred using a distributed ledger on a peer-to-peer network that is open, public and anonymous. Blockchain is the underpinning technology that maintains the Bitcoin transaction ledger.

What is a Blockchain Wallet?

A blockchain wallet is a digital wallet that allows users to store and manage their bitcoin and ether. Blockchain Wallet is provided by Blockchain, a software company founded by Peter Smith and Nicolas Cary.

A blockchain wallet allows transfers in cryptocurrencies and the ability to convert them back into a user’s local currency.

E-wallets allow individuals to store cryptocurrencies. In the case of Blockchain Wallet, users can manage their balances of two cryptocurrencies: bitcoin and ether. Creating an e-wallet with Blockchain Wallet is free, and the account setup process is done online.

Individuals must provide an email address and password that will be used to manage the account, and the system will send an automated email requesting that the account be verified.

Once the wallet is created, the user is provided with a Wallet ID, which is a unique identifier similar to a bank account number. Wallet holders can access their e-wallet by logging into the Blockchain website, or by downloading and accessing a mobile application.

The Blockchain Wallet interface shows the current wallet balance for both bitcoin and ether tokens and displays the user’s most recent transactions.

Users can also click on the cryptocurrency balance, and it will display the value of the funds in the fiat or local currency of the user.

Blockchain Technology in Banking

According to IBM, 66 per cent of banks are expected to have blockchain in commercial production and at scale in four years. Here are 4 of the key advantages of implementing blockchain for banks.

Decentralised Trust

The primary advantage of blockchain is its method of verifying and tracking transactions—it enables individuals and organisations to process transactions without the need for a third party or a central bank.

Several banks have begun using the technology to provide a reliable alternative to systems that depend on intermediaries and third-party validation of transactions.

Instead of everything being controlled by a single central authority, blockchain produces a shared infrastructure by distributing control among all the peers in the transaction chain.

This reduces or even eliminates counterparty risk. Users can be assured that transactions will be implemented as per the protocol, eliminating the need for a trusted third party.

Enhanced Security

Once data is recorded in a block, it cannot be altered retroactively—this makes blockchain inherently secure. Since it is shared among a large number of users, it is difficult to shut down or hack, and can be viewed by anyone using the system, ensuring transparency.

The decentralised nature of the networks ensures that blockchain does not have a central point of failure, and is consequently able to withstand attacks more effectively.

Exchange of transactional value in blockchain involves the use of unique digital signatures that rely on public as well as private decryption codes; it is therefore governed by strict cryptographic rules. This reduces the risk of fraud.

Decreased Costs

By leveraging the distributed ledger approach to form a system that decentralises trust, banks are able to decrease transaction fees significantly by eliminating third party intermediaries and overhead costs for exchanging assets.

The elimination of the middle man has made it possible for processes such as cross-border payments, trading and settlement to become quicker, more reliable and less expensive. Additionally, blockchain reduces material costs by removing the need for expensive proprietary infrastructure.

It reduces risks due to enhanced data integrity, thereby cutting the costs associated with regulatory compliance in areas such as Know Your Customer (KYC) initiatives.

Increased Efficiency

Blockchain eliminates the risk of errors and duplication, and is consequently ideal for refurbishing a range of digital processes. The removal of intermediaries reduces the settlement time to mere seconds and the transaction time to minutes. It also enables transactions to be processed 24/7.

As blockchain helps banks to store data in blocks using a tamper-proof format, it lets them improve the mobility of data and decrease the time taken for KYC efforts. It also allows transactional processes—from payment to settlement—to be fully automated, and removes any delays in documentation caused by duplication.

Blockchain data is complete, accurate, and reliable. Additionally, adding all transactions to a single, publically available ledger eliminates the disorder and complexity associated with multiple ledgers.

Blockchain Transactions

Blockchain transactions bring huge advantages in terms of transactional speed and transfer fees. A normal bank transfer can take a week to complete. The delays are the result of numerous third-parties operating verification systems. A typical international transaction includes over 36 different third-party organizations.

When blockchain transaction completes, that’s it. There are no refunds, cancellations, or take backs. You can’t alter the data later or even delete the record of the transaction. It’s these traits that give blockchain transactions a huge advantage in the market.

The immutable nature of the technology makes it ideal for multiple business sectors including supply chain management, financial services, and government transparency programs.

A blockchain transaction’s approval comes from a process known as consensus. Consensus is an agreement between all the nodes on the blockchain as to what is the valid chain.

A block adds to the chain once 51 percent of the nodes agree on a transaction’s validity. Nodes compare chains to validate transactions. The longest chain is the valid chain.

This method of verification works well, but it can be corrupted if more than half of your blockchain’s nodes are controlled by one party. Bitcoin’s anonymous creator, Satoshi Nakamoto, warned against these dangers multiple times in the now famous Bitcoin white paper.

Blockchain Applications

International Payments

Blockchain provides a way to securely and efficiently create a tamper-proof log of sensitive activity. This makes it excellent for international payments and money transfers.

For example, in April 2018, Banco Santander launched the world’s first blockchain-based money transfer service. Known as “Santander One Pay FX,” the service uses Ripple’s xCurrent to enable customers to make same-day or next-day international money transfers.

By automating the entire process on the blockchain, Santander has reduced the number of intermediaries typically required in these transactions, making the process more efficient.

As a large commercial bank, Santander has numerous retail clients who would benefit from more efficient and cheaper payments, particularly in the area of international transfers.

Blockchain technology can be used to decrease the cost of these transfers by reducing the need for banks to manually settle transactions.

Capital Markets

Blockchain-based systems also have the potential to improve capital markets. A McKinsey report identifies benefits that blockchain solutions offer capital markets, some of which include: 

• Faster clearing and settlement 
• Consolidated audit trail
• Operational improvements

Startup Axoni was founded in 2013 and builds blockchain-based solutions specifically for capital market improvement. Most recently, Axoni announced the launch of a distributed ledger network to manage equity swap transactions – enabling both sides of an equity swap to be synchronized throughout their lifecycle, communicating changes to each other in real time.

Trade Finance

Historic methods of trade financing have been a major pain point for businesses because the slow processes often interrupt business and make liquidity hard to manage.

Cross-border trade involves a large number of variables when communicating information – such as country of origin and product details – and transactions generate high volumes of documentation. 

Blockchain has the ability to streamline trade finance deals and simplify the process across borders. It enables enterprises to more easily transact with each other beyond regional or geographic boundaries. 

Regulatory Compliance and Audit

Blockchain decreases the possibility of human error and ensures the integrity of the records. Business Insider Intelligence

The extremely secure nature of blockchain makes it rather useful for accounting and auditing because it significantly decreases the possibility of human error and ensures the integrity of the records.

On top of this, no one can alter the account records once they are locked in using blockchain tech, not even the record owners. The trade off here is that blockchain tech could ultimately eliminate the need for auditors and erase jobs.

Money Laundering Protection

Once again, the encryption that is so integral to blockchain makes it exceedingly helpful in combating money laundering. The underlying technology empowers record keeping, which supports “Know Your Customer (KYC),” the process through which a business identifies and verifies the identities of its clients.

Insurance

Arguably the greatest blockchain application for insurance is through smart contracts. These contracts allow customers and insurers to manage claims in a transparent and secure manner.

All contracts and claims can be recorded on the blockchain and validated by the network, which would eliminate invalid claims, since the blockchain would reject multiple claims on the same accident. 

For example, openIDL, a network built on the IBM Blockchain Platform with the American Association of Insurance Services, is automating insurance regulatory reporting and streamlining compliance requirements.

Peer-to-Peer Transactions

P2P payment services such as Venmo are convenient, but they have limits. Some services restrict transactions based on geography. Others charge a fee for their use.

And many are vulnerable to hackers, which is not appealing for customers who are putting their personal financial information out there. Blockchain technology, with all its aforementioned benefits, could fix these roadblocks.

Blockchain Companies

With the emergence of the blockchain technology, a lot of companies are already utilizing it. In fact, more than 90% of European and US banks are researching blockchain options. The technology can revolutionize government, finance, insurance and personal identity security, among hundreds of other fields.

We have put together a list of the top 10 companies who are already making use of the blockchain technology.

COINBASE

Industry: Fintech

Location: San Francisco, California

What it does: Coinbase is a digital portfolio that lets users buy and sell cryptocurrency. The company’s technology makes buying and managing cryptos easy with features like recurring buys and vault protection.

Since 2012, Coinbase has seen over $150 billion exchanged by more than 20 million people.

GEMINI

Industry: Fintech, Cryptocurrency, Trading

Location: New York, New York

What it does: Gemini is a digital asset exchange that allows users to buy, sell and trade cryptocurrencies. The company’s platform, using blockchain for both trading and cybersecurity purposes, allows individuals and institutional investors to trade everything from Bitcoin, to Litecoin and Ether.

CIRCLE

Industry: Fintech

Location: Boston, Massachusetts

What it does: Circle is an online money transfer and cryptocurrency investment platform. Without exchange rate fees, friends can transfer money in different currencies with a simple text. Recently, the Boston-based company began offering investment opportunities in seven different cryptocurrencies.

RIPPLE

Industry: Fintech

Location: San Francisco, California

What it does: Ripple is a payment network using blockchain to transfer money all over the globe. International financial institutions like American Express, BBVA and BMO use Ripple’s platform to process and send payments on its secure blockchain network.

SALT LENDING

Industry: Fintech, Lending

Location: Denver, Colorado

What it does: SALT’s platform allows users to leverage their cryptocurrency for cash loans. Borrowers can lock into cash loans, from 1-36 months, by leveraging cryptos like Bitcoin, Ether or even Dogecoin. The company’s platform is available in a majority of US states and multiple countries and loans start at $5,000.

MYTHICAL GAMES

Industry: Gaming

Location: Sherman Oaks, Calif. and Seattle

What it does: Mythical Games is studio creating games and online experiences that feature true ownership of digital assets. The creation of a secondary digital economy, based on a blockchain, helps to verify scarcity and create a clean record of ownership over unique digital items. Mythical Games’ first blockchain-based game, Blankos, is scheduled for release in early 2019.

BLOQ

Industry: Software

Location: Chicago, Illinois

What it does: Bloq develops global blockchain ecosystems that improve business infrastructures. The software management system supports both public and private networks, while protecting even the most sensitive data from breaches.

CELSIUS NETWORK

Industry: Fintech, Lending

Location: New York, New York

What it does: Like SALT, Celsius Network also allows users to leverage their crypto for cash loans. Instead of relying on traditional credit scores to determine interest rates, the company’s Loan-to-Value (LTV) Ratio reviews how much collateral a customer can offer and bases interest rates off of that number. Since June 2018, Celsius Network has done over $600 million in coin loans and has funded the largest single loan of $5 million.

CIVIL

Industry: Digital Media, Journalism

Location: Brooklyn, New York

What it does: Civil’s mission is to power sustainable journalism through blockchain. The company’s CVL tokens is the software on which journalists can launch their own independently operated newsrooms.

The tokens will give journalists a stake in making decisions and appealing violations of the company’s constitution. Since the journalism published is on blockchain, the stories can never be deleted or redacted to falsify information.

ROBINHOOD

Industry: Fintech

Location: Menlo Park, California

What it does: Robinhood is a stock brokerage app that lets users buy and sell stocks, ETFs and cryptocurrency. The fintech giant recently entered the blockchain realm by letting customers invest in everything from Bitcoin to Litecoin. With more than $500 million in funding, Robinhood is one of the major financial players currently embracing blockchain.

Types of Blockchain

There are primarily two types of blockchains; Private and Public blockchain. However, there are several variations too, like Consortium and Hybrid blockchains.

Now let’s have a look in detail about the four types of blockchains that are possible.

1. Public Blockchain

A public blockchain is a non-restrictive, permission-less distributed ledger system. Anyone who has access to the internet can sign in on a blockchain platform to become an authorized node and be a part of the blockchain network.

A node or user which is a part of the public blockchain is authorized to access current and past records, verify transactions or do proof-of-work for an incoming block, and do mining. 

The most basic use of public blockchains is for mining and exchanging cryptocurrencies. Thus, the most common public blockchains are Bitcoin and Litecoin blockchains.

Public blockchains are mostly secure if the users strictly follow security rules and methods. However, it is only risky when the participants don’t follow the security protocols sincerely.

Example: Bitcoin, Ethereum, Litecoin

2. Private Blockchain

A private blockchain is a restrictive or permission blockchain operative only in a closed network. Private blockchains are usually used within an organization or enterprises where only selected members are participants of a blockchain network.

The level of security, authorizations, permissions, accessibility is in the hands of the controlling organization. Thus, private blockchains are similar in use as a public blockchain but have a small and restrictive network.

Private blockchain networks are deployed for voting, supply chain management, digital identity, asset ownership, etc.

Examples of private blockchains are; Multichain and Hyperledger projects (Fabric, Sawtooth), Corda, etc.

3. Consortium Blockchain

A consortium blockchain is a semi-decentralized type where more than one organization manages a blockchain network. This is contrary to what we saw in a private blockchain, which is managed by only a single organization.

More than one organization can act as a node in this type of blockchain and exchange information or do mining. Consortium blockchains are typically used by banks, government organizations, etc.

Examples of consortium blockchain are; Energy Web Foundation, R3, etc.

4. Hybrid Blockchain

A hybrid blockchain is a combination of the private and public blockchain. It uses the features of both types of blockchains that is one can have a private permission-based system as well as a public permission-less system.

With such a hybrid network, users can control who gets access to which data stored in the blockchain. Only a selected section of data or records from the blockchain can be allowed to go public keeping the rest as confidential in the private network.

The hybrid system of blockchain is flexible so that users can easily join a private blockchain with multiple public blockchains. A transaction in a private network of a hybrid blockchain is usually verified within that network.

But users can also release it in the public blockchain to get verified. The public blockchains increase the hashing and involve more nodes for verification. This enhances the security and transparency of the blockchain network.

Example of a hybrid blockchain is Dragonchain

Dogecoin Blockchain

Dogecoin is a peer-to-peer, open-source cryptocurrency. It is considered an altcoin and an almost sarcastic meme coin. While it was created seemingly as a joke, its blockchain still has merit.

Dogecoin was launched in December 2013. Its underlying technology is derived from Litecoin. Its market capitalization is under $500 million, and its market cap rank given by CoinMarketCap is 26.

Dogecoin started as something of a joke, but after it was created, it gained a following, and by late 2017 it was participating in the cryptocurrency bubble that sent the values of many coins up significantly.

After the bubble burst in 2018, Dogecoin lost much of its value, but it still has a core of supporters who trade it and allegedly use it to tip on Twitter.

Blockchain Stocks

If you’re interested in investing in the blockchain technology, here’s a look at five of the best blockchain stocks to buy at the moment.

Intel Corp.

This traditional technology company might not be the first name that comes to mind for exposure to blockchain technology, but Intel’s new Software Guard Extensions (SGX) technology, which the company says “offers hardware-based memory encryption that isolates specific application code and data in memory,” can benefit blockchain transactions as well as autonomous driving and artificial intelligence applications, says Eric Ervin, CEO of Reality Shares.

His company offers the blockchain exchange-traded fund Reality Shares Nasdaq NexGen Economy ETF (BLCN).

While Intel is a large company that derives its revenue from other sources besides blockchain technology, SGX tech could help sales if it is widely adopted.

Canaan

When it comes to the best blockchain stocks with a much bigger percentage of revenue from the technology, Ervin likes Canaan.

The company manufactures hardware used in cryptocurrency mining, which is the process by which a network of computers is used to verify transaction information on cryptocurrency networks.

Ervin likes Canaan’s prospects. Because of the nature of the mining industry, equipment becomes obsolete quickly as miners look for more powerful and energy-efficient tools. That gives mining equipment makers the chance to sell newer, more expensive items.

Still, unsold equipment can be a risk for hardware makers and can lead to pressure to discount older models. The volatile price of bitcoin is also a risk, as miners may not want to put money into new equipment when prices are low.

Galaxy Digital Holdings

Michael Venuto, chief investment officer with Toroso Investments, which manages the investment strategy and portfolio selection for the Amplify Transformational Data Sharing ETF (BLOK), says Galaxy Digital is one of Toroso’s favorite ways to get exposure to the blockchain universe.

A digital asset, cryptocurrency and blockchain technology sector company, Galaxy Digital is involved in asset management, venture capital investments, trading and investment banking. “We find it to be one of the best pure plays,” Venuto says, who thinks the company is undervalued.

Because it trades in Canada, the company has less institutional money pushing its stock price up. Also, the assets it owns through its venture capital arm are hard to value, leaving investors to focus on other parts of its business.

Those venture capital investments could be worth more in coming years, he adds.

Silvergate Capital Corp.

This California-based banking company has become the premier banker focusing on blockchain and cryptocurrency companies, Venuto says, and it deserves a spot as one of the best blockchain stocks to buy.

While Silvergate is a relative newcomer to trading publicly, only debuting its initial public offering last year, the company’s Silvergate Bank subsidiary has been profitable for more than 20 years and began pursuing digital currency customers in 2013.

In its latest quarterly report, the company said digital currency customers grew to 850 as of March 31, compared with 617 the year prior. “You’re getting exposure to the growth of the industry,” Venuto says.

This year, the company launched a new product that allows customers to obtain U.S. dollar loans collateralized by bitcoin and held at digital currency exchanges that are also Silvergate Bank customers.

Square

While many investors may have heard of Square, or at least seen the company’s card-swiping devices at coffee shops or on cellphones, they may not be as aware of the company’s involvement in cryptocurrency.

Square’s Cash App includes a feature permitting customers to buy and sell bitcoin. With that comes a whole infrastructure and culture associated with the cryptocurrency, says Dan Weiskopf, a portfolio manager with Toroso Investments.

He says the leap into that culture is a mark of solid management decisions to target the blockchain space. In its latest quarterly financial results filing, Square said bitcoin revenue increased by $240.6 million, or 367%, over the prior year.

“The increase was due to growth in the number of active bitcoin customers, as well as growth in customer demand,” the company said.

Can You Invest in Blockchain?

As blockchain tech continues to grow, there will be many opportunities for investors. Blockchain is not a physical asset that can be purchased, so many are turning to other ways of getting exposure. Here’s a look at the three main options for how to invest in blockchain.

Stocks 

Investing in blockchain stock is the obvious place to start when thinking of ways to invest in blockchain. Below are just a few for investors to choose from.

• Codebase Ventures (CSE:CODE,OTCQB:BKLLF) — A company that is currently investing exclusively in blockchain-based technology.
• BTCS (OTCQB:BTCS) — This company was the first publicly traded blockchain company in the US.
• Interbit (TSXV:IBIT,OTC Pink:BTLLF) — Interbit’s blockchain services are used in a variety of industries, including banking and fantasy sports.
• HIVE Blockchain (TSXV:HIVE,OTCQX:HVBTF) — A firm that looks to create a bridge between the blockchain market and traditional capital markets. It is strategically partnered with Genesis Mining, a cryptocurrency-mining hashrate provider.

Exchange-traded funds (ETFs)

ETFs offer a lower-fee alternative to stocks, and provide access to a basket of blockchain companies to invest in. Here are a handful of blockchain ETFs available in the market.

• Amplify Transformational Data Sharing ETF (ARCA:BLOK) — This actively managed blockchain ETF was launched in January 2018. The fund’s holdings include companies that are involved in the blockchain sector.
• Reality Shares NASDAQ NexGen Economy ETF (NASDAQ:BLCN) — Established through a partnership between Reality Shares and the NASDAQ, this ETF is focused on generating long-term growth with a focus on blockchain-related companies.
• First Trust Indxx Innovative Transaction & Process ETF (NASDAQ:LEGR) — A fund that tracks the Indxx Blockchain Index. This index is comprised of international publicly listed companies that are involved in blockchain.
• Blockchain Technologies ETF (TSX:HBLK,OTC Pink:BKKCF) — Harvest Portfolios Group issued the Blockchain Technologies ETF, which was the first Canadian blockchain ETF on the market. The fund is focused on securities involved in blockchain, as well as instruments that could include preferred shares, convertible debt and warrants. The fund is listed on the Toronto Stock Exchange.
• Innovation Shares NextGen Protocol ETF (ARCA:KOIN) — An ETF with holdings that were selected by an artificial intelligence-powered algorithm based on textual analysis. The ETF invests in companies that are related to blockchain across four main categories.

Crowdfunding

While it might not be an immediate choice on how to invest in blockchain, crowdfunding platforms are an attractive way for investors to jump into blockchain investing. As Ameer Rosic, CEO of Blockgeeks, has said, crowdfunding is an easy way for innovative projects to obtain money.

This is where blockchain steps in. Rosic says blockchain crowdfunding allows startup companies to come up with their own digital currencies to sell. Examples of blockchain crowdfunding platforms include:

• BnkToTheFuture — A platform that allows investors to invest in fintech companies and funds.
• QTUM — QTUM permits the execution of “smart contracts and decentralized applications.” It also provides easy ways for standardizing workflow for business and smart contract development.
• Waves — A crypto platform for token assurance, transfer and blockchain trading.

Can Blockchain be Hacked?

Since blockchain is supposed to be extremely secure and unalterable, many individuals have dubbed this technology as “unhackable”.

However, recent incidents have unfortunately shown that hackers can access blockchains in certain situations. This includes the following scenarios:

• 51% attacks: During the verification process, individuals referred to as “miners” will review the transactions to ensure they are genuine. When one or more hackers gain control over half of the mining process, there can be extremely negative consequences. For example, the miners can create a second version of the blockchain, referred to as a fork, where certain transactions are not reflected. This allows the miners to create an entirely different set of transactions on the fork and designate it as the true version of the blockchain, even though it is fraudulent. This also allows the hackers to double spend cryptocurrency. These 51% attacks are more common on smaller scale blockchains because it is hard for miners to gain significant control over larger and more complex blockchains.
• Creation errors: Sometimes, there may be security glitches or errors during creation of blockchain. This may be more common with larger, more intricate blockchains. When this occurs, hackers looking for a way in can identify the vulnerabilities and attempt an attack. This has transpired with smart contracts, which use a blockchain network to operate. Common functions of smart contracts include assisting with the financial aspect of contract dealings and automating tasks. Legal professionals may encounter smart contracts in their practice, whether using them internally or through exposure from cases and client issues. If a security flaw exists on the blockchain network where a smart contract operates, hackers may be able to steal money from users without being detected because the fraudulent activity is not reflected. Unfortunately, since blockchain transactions cannot be altered, the only way to get back stolen money is to make a fork that all users recognize as the authoritative blockchain.
• Insufficient security: Many blockchain hacks have happened on exchanges, which is where users can trade cryptocurrecy. If the security practices surrounding the exchanges are weak, hackers will have easier access to data.

Blockchain Hacking is Increasing

Recently, blockchain hacks have drastically increased as hackers have discovered that vulnerabilities do in fact exist. Since 2017, public data shows that hackers have stolen around $2 billion in blockchain cryptocurrency.

This recent activity illustrates that blockchain is unfortunately not unhackable and users should still be cautious, especially when trading on exchanges. Looking forward, legal professionals who encounter blockchain should keep apprised on the risks and any new solutions.

Before using smart contracts or trading on an exchange, be sure to research whether there have been previous attacks and any relevant security measures.

However, at this point it does not appear that blockchain users need to be too apprehensive because the technology is still very secure in design. Creators and administrators will undoubtedly continue to perfect security measures to decrease future hacking risks.

Which is Better Coinbase or Blockchain?

On a general note, both CoinBase and BlockChain are trusted blockchain wallets. Though both are secure and are easy to set up, the main difference lies in the way in which funds are deposited and transacted.

While BlockChain only facilitates transactions carried out in cryptocurrencies, CoinBase allows fund deposit through credit card, debit card, and bank transfer and withdrawal through bank transfer, PayPal, and cryptocurrencies. Both these platforms offer an easy to use app, wallet, and website.

Both offer similar dashboards and provide information about your account, along with currency trends and prices. It only takes a few minutes to register for both the services. The registration process involves verifying your account through email and phone numbers.

An additional feature of CoinBase is that you need to verify or add financial accounts to start buying Litecoin, Bitcoin, or Ether with USD. CoinBase allows you to convert US Dollars or any other currency into cryptocurrency for a very minimal fee.

CoinBase’s user interface is very similar to BlockChain. In both, the user interface is laid out in panels on the website and navigation screens on the app.

Both allow you to monitor cryptocurrency trends on the exchange. CoinBase displays your portfolio information on the dashboard.

Let us now take a look at the features of both for better understanding.

Features of BlockChain

Some of the prominent features of BlockChain are:

• Security and safety– Its security center helps keep Bitcoin transactions safe. This center is responsible for the prevention of unauthorized access and backup of funds.

• 24*7 support– The users can reach out to its team at any time for support.

• Simplicity– It simplifies Bitcoin usage and allows Bitcoin transactions worldwide.

• Sophistication– It offers a sophisticated system with dynamic charges for transactions.

• Cross-platform– It offers applications for desktop, Android, and IOS that allows users to use their wallets from any device at any time.

• Global utility– It is a global platform offering conversion rates for around 20+ currency types.

Features of CoinBase

The notable features of CoinBase are:

• Security– It helps store almost 98% of digital assets in the digital mode. It helps protect Bitcoins from loss or theft.
• Cross-platform– These can be used on Android or iPhone applications.
• Complete control mechanism– It has multi-signature wallets that offer control for the private keys used.
• Instant transaction facilities– It lets users exchange their local currencies with digital currencies. Users will be able to transact instantly.

Selecting a blockchain wallet is a critical task as it is important to choose one that will ensure that the cryptocurrencies you have invested in are stored in a safe and secure manner.

Both CoinBase and BlockChain have their own benefits and deciding on which wallet to use depends on your own intent for use. If you are a newbie who is starting with crypto wallets, it is better you go with CoinBase as it is easier to use and offers two-factor authentication.

Coinbase will also let you store alternative coins such as Ether and Litecoin. In 2018, Ethereum Classic was also added to the CoinBase platform. On the other hand, if you only plan to use cryptocurrency transactions without the need for a bank, blockchain will be the perfect option for you.

Who Owns The Blockchain?

Blockchain was invented by a person (or group of people) using the name Satoshi Nakamoto in 2008 to serve as the public transaction ledger of the cryptocurrency bitcoin. 

The identity of Satoshi Nakamoto remains unknown to date. The invention of the blockchain for bitcoin made it the first digital currency to solve the double-spending problem without the need of a trusted authority or central server.

The bitcoin design has inspired other applications, and blockchains that are readable by the public are widely used by cryptocurrencies. Blockchain is considered a type of payment rail. 

Private blockchains have been proposed for business use. Sources such as Computerworld called the marketing of such blockchains without a proper security model “snake oil”.

How do I Buy Stocks in Blockchain?

Before you decide the type of blockchain stock to invest in, it’s essential to consider the facts below:

a. Consider purchasing the top blockchain stocks only which develop genuine blockchain technology.

b. All investments have risks, and therefore, you should only invest in well-established firms which won’t disappear overnight.

c. Research is key. The more you understand what’s going on, the more likely that you’ll have a better chance of getting the winning lists of stocks to invest in.

To be in a more safe position, consider tech giants such as Google, NVIDIA, IBM, Hitachi, Bank of America etc. They all offer numerous opportunities for crypto investors.

The process of buying blockchain stocks is similar to that of buying other stocks. If you want to ease the process, it’s advisable to begin by learning the process of trading online stocks.

Where to buy blockchain stocks

As an investor, it’s essential to perform intensive research before you decide to invest in blockchain stocks. Additionally, you should also note that the majority of the pure-play stocks are usually traded on the OTC market. You can purchase blockchain stocks via online brokerage companies like:

• eTrade
• TD Ameritrade
• Scottrade
• Ally Investment
• Webull

These are the most common blockchain stock trading firms, especially for beginners. Alternatively, if you’re willing to trade directly with your iPhone, consider using the commission-free stock trading application, Robinhood. This is a US-based crypto trading app that allows the trading of crypto-related stocks without any charges.

Does Amazon Use Blockchain?

Companies like Amazon, Wallmart, IBM, Infosys, Microsoft, UPS, are some big names that are exploring the use of blockchain. These companies are trying to implement Blockchain Technology in their daily business operations and to make it more efficient.

Read Also: How to Use Economic Cycles to Your Advantage

Amazon has simplified the complex task of creating, running and meaning blockchain by outsourcing the operational work of blockchain.

Its like Amazon will rent a blockchain from the blockchain provider.  They don’t have to spend on management and running of the blockchain system. It will eventually save the cost and time of the company so that Amazon can focus on its core business area.

A blockchain is actually a database because it is a digital ledger that stores information in data structures called blocks. A database likewise stores information in data structures called tables.

However, while a blockchain is a database, a database is not a blockchain. They are not interchangeable in a sense that though they both store information, they differ in design.

There is also a difference in purpose between the two, which is perhaps what is not clear to those who want to understand why blockchains are needed and why databases are better suited for storing certain data.

Last Words

It’ll take many years and buy-in from numerous different industries before blockchain becomes commonplace.

And while we don’t recommend SMBs worry too much about blockchain just yet, it’s important to keep an eye on the emerging tech as larger enterprise businesses start developing more blockchain applications.

So the next time you find yourself sinking into a deep hole of depression because you didn’t scoop up bitcoin while the iron was hot, remember the most rewarding technology — blockchain — is still to reach its full potential.