Investing in Blockchain

Blockchain is very much like teenage sex -- everyone talks about it, nobody really knows how to do it, everyone else is doing it, hence, everyone claims they are doing it as well.

Let's keep it real - blockchain is one of the hottest buzzwords nowadays. In fact, I would argue that it is way overrated, as simply too many problems are intended to be solved with the help of this technology.

The truth of the matter is that, first, there might be no problem in the first place. Second, blockchain might contribute very little (if at all) to solving it. However, let us keep this open for a while, and focus on the topic of this article. Which is investing in blockchain.

Placing Bets on Blockchain

I have a very simple question for you -- do you know where to place your bets when it comes to blockchain tech?

If you do not know, or you are not sure yet, here's what's in the market right now. Read carefully, apply your own judgement, and only then decide.

Cryptos

Of course, by far one of the most popular and arguably the easiest way would be to simply invest in a particular cryptocurrency. Here you might choose between the long-term investment (with the hope that the price of a particular crypto keeps rising), or simple speculation (trying to earn some $ on daily fluctuations of the crypto of your choice).

As it is visible from the graph above (source: Coinmarketcap), despite some obvious fluctuations (this is inevitable, you have to deal with it), majority of the top 10 cryptos virtually tend to show an upward trend. For instance, looking at the year-to-date, Bitcoin has increased by more than 400%, whereas Ethereum has skyrocketed by more than 3800%. Crazy, absolutely crazy.

For those who are interested in the future of two of the most valuable cryptocurrencies today, read my separate passages about Bitcoin and Ethereum. You must keep an eye on them.

ICOs

Another option is to pour your money into Initial Coin Offerings, or simply - ICOs. Again, if you see the future value in the token of your choice, you might make a long term commitment. Alternatively, looking for an easy $, you can buy the token during the pre-sale at the discounted price, and later dump it once it is put on the exchange.

The truth of the matter is that majority of the people choose the latter option. And you have to take this into account no matter whether you are an investor, or a company doing an ICO.

If you are a company raising funds though, then you most definitely have to know how NOT to do an ICO. Precisely for this I have written a separate passage.

As we see from the graph above (source: CoinSchedule), more than $3 billion have been raised via ICOs, with September being the most generous moth thus far.

However, no matter whether you are a short or long-term investor, you have to be really careful with ICOs. Since majority of them are worthless, and in fact you have bigger chances in winning a lottery than making some money from the tokens you bought (not to mention that you can lose here even more money). Be wise here, please.

Infrastructure

Finally, there is another option, which I see as undervalued. And this is investing in the blockchain infrastructure.

When I name infrastructure, I mean companies that are providing the backbone for the whole industry. For the purpose of this article, I would like to name a few of them - NVIDIA and AMD (Advanced Micro Devices).

Both of these companies are producing powerful processing engines for cryptocurrency mining (such as Bitcoin, Ethereum etc.), as well as building other products for the blockchain industry.

Due to an obvious increase in demand for their products, the share price of both NVIDIA and AMD has been steadily increasing over the last 5 year period.

If you would have invested $100 in NVIDIA back in 2012, today you could have more than $1640. Smaller, but still sizable gains as well could have been achieved if one had invested in AMD. From 2012, its share price rose by circa 700%.

The thing I like about these companies is that they are big corporations with real clients and strong business models. Moreover, the are among best ones in their fields, therefore, increasing market demand should only strengthen their overall position and performance.

Bringing it all together

The opportunities presented above are obviously not finite and absolute. There most definitely are other options to explore, which as well can bring considerable return on investment.

Yet, the ones I covered I personally see among those that should be properly evaluated if one thinks of investing in blockchain.

If you have to pick one, which would you choose? I would appreciate if you would leave your thoughts in the comments below.

Disclaimer: the opinion below is not an investment advise. Cryptocurrencies, ICOs and the like are high-risk investment, therefore, they should be evaluated with caution. One should not invest more that s/he is willing to lose.