OFF INTO THE WILD WET YONDER How does this...
How to Invest in Bitcoin Without Actually Investing in Bitcoin
I have remained on the fence about investing in cryptocurrencies like Bitcoin, or any others, for years now. I am attracted, of course, to all of its inherent possibilities—to its decentralization nature and disruption capabilities, and certainly attracted to its growth characteristics… but as a new “currency,” or even a standardized online system of payment, I’m a bit hesitant right now—at least in regards to anything strictly “Bitcoin.”
First off, all the “breached” and/or “hacked” news regarding cryptocurrency exchanges, platforms, and wallets is in no short supply—from Mt. Gox to Bitstamp, and others in between, things look a little too wild-west for me as a relatively conservative investor at this stage of the game.
Secondly, the cryptocurrency space is not as uncrowded as some might expect—Bitcoin, Dogecoin, SolarCoin, CannabisCoin, and my personal favorite, HayekCoin. There is a flavor for everyone and new ones seemingly being created every day.
Couple all of this with companies like Apple and Google designing and creating their own payment systems, and not only does it look crowded, but also way too chaotic to predict future winners and losers.
The obvious next best option is to look at investing in the technology behind cryptocurrencies.
Blockchain is the foundation behind it all. It is what keeps cryptocurrencies legitimate. It also has an unlimited number of possibilities from securities trading, record keeping, auditing, etc. It is, by in large, revolutionary and is the next frontier in internet technology.
The best way to explain the technology is like this: Blockchain is an interconnected protocol that governs the rules and regulations of whatever it is monitoring—be it cryptocurrency or a security like a stock. Each “block” has its value electronically engraved into it that cannot be erased and is intricately connected to all other blocks in the chain. It’s also highly transparent and its footprint is left everywhere, not just with some random custodian, broker or government facility.
So the next question is, if it’s transparent, decentralized and, quite obviously, unpatentable… how do you invest in it? Good question.
I have come up with a short list of the most strategic ways to invest in this technology, purposely leaving out information regarding direct investment in cryptocurrencies and using venture capital routes. Although both may very well be great avenues, both also carry many inherent risks that many investors—myself included—would rather avoid. It is not a perfect list, nor does it have the gift of longevity because the industry is ever so rapidly changing, but at the very least it should give any stock investors a decent place to start navigating from.
Coinsilium regards itself as a hybrid venture capital and business growth consultancy firm. It’s also going to be the first blockchain company of its kind to publicly float on London’s AIM market. The company is currently doing roadshows and hopes to be listed using the ticker symbol “coin” around the first or second week of August, 2015. (This is the purest blockchain play on this list.)
Overstock is a publicly listed American online retailer. In 2014, they were one of first major retailers to start accepting bitcoin as payments for its goods. In that same year, they also committed 4% of their bitcoin revenue to foundations that were advocating for cryptocurrencies. On June 5, 2015, Overstock launched the first ever “cryptobond” to be issued on the company’s newly-developed platform TØ.com. Overstock CEO Patrick Byrne is an ardent backer of blockchain technology and is committed to seeing the technology move forward.
Seagate Technology PLC
Seagate is an American data-storage company probably most famous for its hard disk drives (HDDs). But most recently it made headlines when it was revealed that it decided to join a round of fund raising to invest in Ripple Labs, an online payment system protocol with a native digital currency (its own cryptocurrency). The desire to invest came out of the need, like many, to seek alternative methods of moving capital around the globe. Although Seagate will not start using Ripple’s technology right away, the door is cracked open and progress is underway.
No introduction necessarily needed, the multi-national technology behemoth unveiled a device system protocol developed in partnership with Samsung that uses elements of blockchain technology. In simpler terms, imagine a system that would allow your TV to communicate with your refrigerator and your local supermarket to bring products to your home on demand or automatically—say, for example, your fridge is running low on milk and eggs, or you see something delicious on the boob tube.
If you feel I have (ignorantly or intentionally) left a company off the list, please feel free to give us a heads up in the comment section below.