Blockchain stock may not be the household name it once was, but if you hear about it, startups or companies at all, there’s a good chance they’re somehow related to this type of technology. That’s because it can be used for much more than cryptocurrencies like Bitcoin. It also has applications in public records, company records, and even stock trading.
It is a decentralized ledger of digital events. In the case of these types of stocks, those events are financial transactions. Many different computers, known as nodes, can contain a copy of ledgers. When one computer validates an event or transaction on it and adds that update to its copy of the blockchain, all the other computers on it use algorithms to assess and validate that update and compare it to their own ledgers. If any one of them disagrees with the proposed update, it rejects it as invalid and continues onward with its current ledger containing the most up-to-date version.
A practical example: Let’s say Maria records trades on this platform via her account. The record is sent to the blockchain where it’s validated and approved for all node members. Those stock records are then replicated and updated throughout the platform so that every computer has the most up-to-date ledger of Maria’s blockchain trading activities — without a central authority. Since it is decentralized, these stock trades are stock trades without the costs associated with centralized trading systems.
Why blockchain stock?
How can it be used for these types of stocks? Its ability to streamline business transactions while maintaining security and decentralization makes it ideal for company ledgers. While you might not know these stocks by name, this technology has probably already touched your stock portfolio. From stock trading to company ledgers, it is likely in everyday use by the companies you own stocks through.
Partnership between blockchain stocks announcements between startups and companies are commonplace these days, so when one of them mentions stocks in their announcement, it’s worth taking note even if it is a relatively new stock market.
These types of ledgers have the potential to replace transaction systems currently in use by these types of companies. This means companies could take this share from existing players as it becomes more prevalent within their own company ledgers and these become more reliant on technology for day-to-day trading transactions.
Investors who want to own these types of shares without having to directly invest in these companies can buy stocks through the platforms ETFs, mutual funds o stock portfolios. For investors who aren’t sure whether they’re ready to get into this technology directly, buying these types of shares is a way to ease investments.
A Blockchain stock is a good investments for company leaders. When you own these types of shares,companies, and startups that want to access your money and your network of contacts can go through you. If those companies create technology-based products and services, their investment could pay off.