Weiss Crypto Ratings Suggests Owning “Blockchain Stocks” as Tech Becomes IT Priority
As Bitcoin (BTC) promises to set new records and Facebook adopts a distributed ledger, Weiss Ratings suggests investment in companies applying blockchain solutions.
One of the effects of the ascent of Bitcoin (BTC) was the creation of startups and companies proposing blockchain solutions, while distancing themselves from coin trading. Their mantra was, “blockchain, not Bitcoin”. Now, Weiss Ratings suggests it may be wise to add those company stocks as an investment in blockchain technology.
“To large businesses, blockchain is quickly becoming as much of an IT priority as network upgrades, cloud transition, cybersecurity, big data, social media collaboration, Internet of Things and artificial intelligence,” commented Tony Sagami of Weiss ratings.
Sagami cited the most recent Deloitte Consulting research for 2019, stating that 53% of business managers put a high priority on blockchain solutions. He does not mention specific companies, but points to increased spending on blockchains in the coming years.
Yet not all investments are equal. During the boom of 2017, OTC companies quickly switched to having “blockchain” in their name, without a real product. Additionally, the US Securities and Exchange Commission banned the usage of “blockchain” within the name of exchange-traded funds (ETF).
Since the first large-scale rally, the definition of blockchain has also changed. The globally spread, anonymous chain of Bitcoin is the exception. Businesses seek to build lighter models which are also more user-friendly. Thus, block production and governance are becoming semi-centralized. In some cases, the consensus is also controlled by a central entity.
Additionally, several projects are offering business-grade blockchains, or side chains, including Stellar (XLM), Stratis (STRAT), and many others. A business could also use any blockchain protocol to create a new network. Hardware demands are also increasing.
As blockchains become more widely used, with a longer history and greater requirements, some of the tasks are offloaded to startups. In the case of Ethereum (ETH), ConsenSys offers more accessible services to communicate with the network.
While interest in blockchain technology is increasing, previously hot projects are lagging, having lost more than 90% of their market price without recovery. It is possible that business-grade blockchains or permissioned networks rebuild the ideas which ICO-based projects failed to achieve.