Today, the U.S. markets are closed for the Labor Day holiday. So I thought I’d take the opportunity to do something a little different for today’s Bleeding Edge…
For more than five years, I’ve wanted to help investors explore the world of blockchain technology and cryptocurrencies. And I’ve been an angel investor in blockchain and cryptocurrencies since 2014.
I first recommended bitcoin (BTC) in 2015. Back then, it was trading for just $235. It rocketed to more than $60,000 earlier this year.
But blockchains have so much potential besides bitcoin and online currency transactions. In fact, there are many blockchains… which means there are many investment opportunities that we want on our radar.
So today, I’d like to dive a little deeper than usual and explain why we need to pay attention to this space… and show how blockchain technology is going to change the world as we know it.
More Than Just Bitcoin
Bitcoin was just the beginning of blockchain technology. It’s a safe store of value that we can transfer on a peer-to-peer basis. And those transfers are immutable – they can’t be changed. That was the revolution of the Bitcoin blockchain.
Another blockchain many people have heard of is the Ethereum blockchain. Its digital asset is ether (ETH). The revolution the Ethereum blockchain brought about was the ability to have “smart contracts.”
Smart contracts – pieces of code that exist on a blockchain – can be used for anything from insurance to lending to gaming.
For example, you can lend some ETH to someone at an interest rate for a certain time using a smart contract. It all happens completely automatically. When the contract is up, all the money comes back to your account.
And there are thousands of blockchains like this. Each can be used for different kinds of applications.
We’ve only just scratched the surface of the industry. And a big part of what I see coming is the development of Web 3.0, an upgrade of the current 2.0 internet.
A Free, Uncensored Internet
An upgrade to the internet may sound odd to many people. But Web 3.0 will be better than our current internet and will enable a whole new generation of apps built on blockchains.
The original internet was created to be free, open, censorship-free, and free of centralized control. Yet now we have monolithic gatekeepers that can – and have – banned and censored what we can see online. It’s becoming a closed system.
Many people have a philosophical problem with that. And we’re going through a disruption as a result. Web 3.0 – the next-gen internet – is an effort to decentralize the internet and make it free again.
After all, the people who built the original protocols – or agreed on sets of rules – the internet is based on made them free to use.
Take TCP/IP protocols, which specify how data should be packaged, addressed, transmitted, routed, and received. Big Tech giants such as Google (GOOG), Facebook (FB), and Twitter (TWTR), which were built on top of these free protocols, made all the money – rather than the people who actually built the protocols.
Not only did they make all the money, but also these Big Tech giants extracted our data and our content for their profit. We didn’t get a penny.
But blockchain technology is remedying this. For example, there’s a project called Aave [pronounced “ah-veh”] – It’s a blockchain-based version of Twitter. But it won’t have a CEO to censor what goes out on the platform.
As many of our readers will know, censorship is a huge problem right now. Censorship is a restriction of one of our basic freedoms – to be able to read and form our own opinions.
This is why blockchain technology is so important.
Blockchains can be censorship-proof. They are built on tens of thousands of nodes. The decision-making happens by consensus among the different nodes. It’s a distributed system. No single executive… or corporation… has the ability to tamper with what happens on the network.
Even if one country were to censor or ban all blockchain technology, all the other countries would still be up and running.
The tables have turned against Big Tech. And what’s amazing is we have these built-in, economic incentives in blockchain technology. They allow normal investors to invest in the protocols of the next-generation internet by owning the digital assets associated with blockchains.
We couldn’t do that in the last generation of the Web. Now we can actually own the protocol, via a cryptocurrency. That’s why investing in blockchain tech is such an extraordinary opportunity.
The Rise of NFTs
They really started making headlines with Beeple’s digital painting that sold at auction in March for $69 million. And now even the National Basketball Association (NBA) is getting involved in NFTs. It’s easy to dismiss these new assets as wacky. But what’s happening with NFTs right now is extraordinary. And it’s not just about art and collectibles.
NFTs are smart contracts. So not only do they represent a digital piece of art or a digital sports trading card, for example, they can also confer benefits to their owners.
People who are passionate about sports can buy a limited-edition NFT. It will give them a digital token along with other perks. For example, a dinner with their favorite sports star. Or access to a private party the sports star will be at.
Another exciting concept is “digiphizzy,” which stands for “digital to physical.” These NFTs give you rights to a physical object.
Sticking with our sports fans example, if you buy a digiphizzy NFT, you might be sent an autographed football as a benefit of owning the NFT. The applications for NFTs in the gaming community are pretty extraordinary too. An NFT game called Axie Infinity already surpassed $1 billion in sales.
So NFTs are going viral. But they’re not a fad. They’re the next generation of art, collectibles, fan clubs, and gaming.
Last year alone, the NFT market did about $250 million in sales. This year, sales will top $10 billion. And 2022 will be even bigger. We’ll see tens of billions of dollars in sales.
It’s such an exciting space within the blockchain industry. It’s growing so fast and has so many practical applications.
If NFTs still seem odd, don’t worry. There are also more mundane yet still powerful applications of blockchain tech.
For example, the environmental, social, and governance (ESG) trend has been growing quickly. And people are concerned about where goods are coming from… whether they’re real or counterfeit… or whether they’re from conflict areas.
They want to be able to track those goods through their entire supply chain.
That’s precisely what blockchain technology is meant to do. Records on blockchains are immutable. We can trust them because no one party controls that individual blockchain.
My background is in corporate high tech. So these practical applications that solve real-world problems are particularly exciting for me.
And blockchains are going to affect multiple industries. Think about decentralized finance, or DeFi. Pretty much any financial transaction is ripe for disruption by blockchain tech.
For example, we can remove intermediaries and do peer-to-peer exchanges. No need for middlemen and their associated costs.
Derivatives markets are also popping up. These allow investors or institutions to hedge their portfolios, speculate on future directions of digital assets, or get leverage on their investments.
Then there’s decentralized lending. It’s still in the early stages. People who hold digital assets, such as bitcoin, can lend them out. They then get paid attractive yields for providing that liquidity.
Why is this attractive? Well, go to your bank, and see what interest rate they’re going to give you for your savings. It’s a fraction of a percentage. But with digital assets, you can see yields above 10% for folks willing to lend them out.
It’s just remarkable.
These are the kinds of developments every investor should know about. And this is why it is the right time for me to launch Unchained Profits, my new blockchain-focused investment advisory.
With Unchained Profits, I’ll be able to share the most promising projects, tokens, and platforms in this space. I’ll finally be able to put my research and experience to good use on behalf of my readers.
If you haven’t yet taken the time to check out my new service, I’d invite you to do so now.
We’ve already seen explosive movement in the short span of time this service has existed – I don’t want any of my readers to miss out.
And I’ll continue to cover the latest trends in blockchain technology and cryptos here in these pages.
Editor, The Bleeding Edge
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