Blockchain Investment Insights is a top-down investment approach designed to capture transformative technology trends and help investors understand and proactively manage how these themes impact portfolios.
Blockchain is a distributed, immutable and public database that records transactions in a peer-to-peer network. It can be used to enable new business models and solutions, such as increasing trust and transparency in marketing, improving data security for customer information, and reducing fraud in digital ad buying (Policy Horizons Canada, 2021).
This technology underpins cryptocurrencies like Bitcoin, enabling faster and cheaper transactions. But blockchain’s potential goes beyond digital currencies. All traditional assets, from currencies to art, are being reimagined as provably scarce and secure blockchain-based digital assets.
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The technology is gaining momentum, with the global value of blockchain-based projects set to grow to US$3.1 trillion by 2022. However, it is still a relatively early stage for many applications. For example, in Aotearoa New Zealand, awareness, use and capability is limited to technology companies and early-adopter businesses in the creative sector, with less penetration within universities and government (BlockchainNZ, 2021). Some blockchain technologies – particularly those using ‘proof-of-work’ methods – consume a lot of energy, creating a sustainability risk that could limit their growth. We expect ‘proof-of-stake’ blockchain technologies, which use less energy, to become more widespread in the coming years.