Total capitalization is now USD 140 billion – compared with just USD 16 billion in January 2017.
Although media attention for cryptocurrencies is growing considerably, there is currently little discussion of the genuinely revolutionary technology that makes them possible: blockchain. Blockchain is a digital accounting system that precisely registers all transactions and stores every change as a "block." Lining up the individual blocks that each contain the information in the previous block creates an endless "chain" – which is where the name comes from. Blockchain is stored locally and simultaneously across all connected computers around the world, which makes it almost impossible to manipulate.
Large companies like Apple, Google and especially IBM and Microsoft, as well as significant portions of the banking sector, have been using blockchains for a long time.
Along with the big players, there are also many innovative new concepts based specifically on blockchain technology. One good example is the Sia cloud . Sia makes a fully decentralized cloud available with enhanced security and very attractive pricing. Compared with the Amazon S3 (USD 115/month), Google Cloud (USD 100/month) and Microsoft Azure (USD 120/month) cloud solutions, the same amount of storage (5 terabytes) costs only five US dollars per month.
How can we participate in blockchain theory beyond the technological advances? One way is to invest in cryptocurrencies – the other is to invest in blockchain shares. The complexity of these shares depends primarily on the broker used. Not all brokers list blockchain shares, but we have had good experiences with the free brokers at Comdirect and ING-Diba.
Currently, the topic of blockchain shares can be divided into two areas:
Many of the startups named here are in our view not so strongly rooted in the market that they can be seen as fully established. There are still few figures available for the exchange-listed companies, so investment involves a high degree of risk – probably even higher than for an investment in one of the top ten cryptocurrency firms. That is why we believe it makes more sense right now – alongside investments in cryptocurrencies such as Bitcoin, Ethereum, Litecoin, Zcash or Monero – to acquire shares in established companies, by which we mean Apple, IBM or Google, for example. These firms are all involved in the blockchain sector and are also pursuing developments such as artificial intelligence (AI), Internet of Things (IoT), cloud computing and cybersecurity.
If you have already invested in both fields and still want to do more, we recommend taking a look at shares in Digitalx and TIO Networks. This year TIO Networks was acquired by PayPal for USD 233 million. It delivers cloud-based services that customers can use to pay invoices immediately via multiple payment channels. It is positioned primarily for LMI (low to moderate income) users in underserved banking markets, and has currently completed the Softgate Systems integration phase. This has resulted in three new internal business units: Biller and Agent Solutions (process payments), Telecom Solutions (service provider), and Consumer Financial Solutions (B2C).
Digitalx is in the early stages according to its market cap, but has major potential due to its collaboration with Telefonica and the innovative use of Airpocket – particularly in a market like Latin America. TIO Networks, like Sia Tech, has the potential to shake up the cloud market – in particular when it comes to pricing and security, both clouds offer clear advantages over Amazon S3, Google Cloud and Microsoft Azure.