As companies, government agencies and individuals realise the potential of blockchain to create efficiencies, lower costs and improve security, it could trigger a value-creation event as profound as the arrival of the internet. Blockchain is a transaction tool and a new form of consensus technology, taking intermediaries out of the process, making transactions cheaper, quicker and more secure. And this is its appeal.
Blockchain’s most high-profile role to date has been in decentralised finance, focused on the transfer of value. The purest form is cryptocurrency, but the technology also can be used in areas such as insurance, alternative finance (such as crowdfunding), cross-border remittances and consumer finance.
Blockchain adoption is still in its early stages, but there are numerous utilisation opportunities for companies that want to provide safer, cheaper, faster financial services.
Not only are more pure play blockchain options coming to market but also the materiality of blockchain exposure is increasing across many other companies. In our view blockchain is becoming a more important part of their business model and central to their growth, and we believe this is an important moment in blockchain adoption as it moves from a niche technology to broader adoption. It offers greater speed, security and efficiency for companies willing to explore its potential. For investors, we believe its full potential is only just starting to be revealed.
The Blockchain Innovation Team, Newton Investment Management.
Doc ID: 903500