Companies to Watch as Blockchain Tech Takes Off
LONDON, March 2, 2018 /PRNewswire/ --
The value of cryptocurrencies gyrated wildly over the past year, minting millionaires and shattering dreams with each passing day. The crypto craze - epitomized by the skyrocketing value of Bitcoin [https://charts.bitcoin.com/chart/price ] from less than $1,000 to more than $19,000 per coin - has hit some speed bumps, but it is far from over. The price of Bitcoin crashed by about two thirds from its late 2017 peak, and while it seems to be on the rise again, investing in the cryptocurrency is not for the faint of heart. Included in today's commentary: Bank of America (NYSE: BAC), Accenture (NYSE: ACN), Microsoft (NYSE: MSFT), Mastercard (NYSE: MA), Celestica Inc. (NYSE: CLS).
But the underlying technology upon which Bitcoin rests - blockchain - is just getting started. Blockchain, a digital ledger that offers rapid, secure, transparent and tamperproof recordings of transactions is set to disrupt nearly every industry one can think of, including real estate [https://www.msci.com/www/research-paper/real-estate-market-size-2016/0183961169 ], shipping [http://www.prnewswire.com/news-releases/global-logistics-market-to-reach-us155-trillion-by-2023-research-report-published-by-transparency-market-research-597595561.html ] , banking [https://cointelegraph.com/news/7-global-banks-partner-up-to-develop-blockchain-based-syndicated-loan-market ] and healthcare [http://technopow.com/index.php/2017/10/09/health-care-it-market ].
Blockchain, however, remains inscrutable and confusing to the average person, and for investors, there are no obvious ways to profit from the unfolding blockchain revolution.
Here are five companies making moves in the blockchain space that investors should keep an eye on.
#1 Bank of America (NYSE: BAC)
Bank of America has 43 blockchain patents or applications [https://www.fool.com/investing/2018/01/21/surprise-this-company-holds-the-most-blockchain-pa.aspx ] , according to Envision IP, the most out of any other company. The bank is planning for the days in which the current financial system switches over to the blockchain. While it appears to be backing the blockchain, Bank of America has not helped its clients jump into the cryptocurrency game.
Bank of America's portfolio of blockchain patents appears to be a bet on the eventual mass adoption of blockchain.
In one particularly interesting patent [http://patft.uspto.gov/netacgi/nph-Parser?Sect1=PTO2&Sect2=HITOFF&u=%2Fnetahtml%2FPTO%2Fsearch-adv.htm&r=1&p=1&f=G&l=50&d=PTXT&S1=9,836,790.PN.&OS=pn/9,836,790&RS=PN/9,836,790 ] , Bank of America laid out [https://www.coindesk.com/bank-of-america-outlines-cryptocurrency-exchange-system-in-patent-award ] a cryptocurrency exchange system that would convert one digital currency into another. The system would be automated and would establish optimal exchange rates based on external data.
Bank of America is clearly hedging for the future. It has been skeptical of advising clients on getting into cryptocurrencies, but it is aggressively planning - just in case - to directly benefit from a potential mainstream adoption of blockchain technology. If financial transactions shift to the blockchain and cryptocurrencies en masse, Bank of America is laying the groundwork to lead the way.
#2 Hashchain Technologies Inc. (KASH [https://web.tmxmoney.com/quote.php?qm_symbol=KASH ].V; HSSHF [https://finance.yahoo.com/quote/HSSHF?p=HSSHF ])
Hashchain Technologies Inc. has plans to become a diversified cryptocurrency holder, spanning a range of crypto assets that offer investors a lot of upside to the burgeoning crypto trend.
Hashchain has 870 mining rigs currently in operation, and it will be able to produce 20 MWs [https://www.prnewswire.com/news-releases/hashchain-technology-enters-into-purchase-order-agreement-for-5000-mining-rigs-and-commitment-for-20-megawatt-facility-668015353.html ] if its Montana facility space is operating at fully capacity.
The mining craze exploded last year, with mining operations proliferating around the globe. But Hashchain is ahead of the pack, already scaling up existing mining operations. Soon it could be one of the largest crypto miners in the world.
Better yet, Hashchain is far more than just a cryptocurrency miner.
Hashchain plans to mine existing coins to develop a diverse portfolio of cryptocurrencies, allowing casual investors to bet on the space, but not run the risk of individual currencies.
There's more. Hashchain recently acquired the assets of Node40 which created a proprietary software that can help holders navigate the regulatory challenges and tax windfalls of the cryptocurrency market - allowing it to profit from the sudden spike in scrutiny from regulators worldwide.
The crypto market is a Wild West of speculation, hype, and volatility. Crypto boosters have only scorn for regulation, but the instability of various cryptocurrencies - epitomized by the boom and bust of Bitcoin - has raised threats to the entire sector. China and South Korea have called for bans on crypto mining, and more regulators are taking a look at the crypto market because of the insane fluctuations in coin prices.
The recent launch of the "Petro," a cryptocurrency backed by the Venezuelan government, has raised the ire of regulators in Washington.
Against this backdrop, regulation could be a good thing. Regulation may bring more scrutiny, but it would also bring legitimacy and stability. More rules could allow the cryptocurrencies to profit, as a stable market could unleash a massive wave of potential investment from more cautious investors.
The trend towards regulation could benefit the sector on the whole, but Hashchain Technologies wants to explicitly profit from regulations.
"Cryptocurrency accounting and reporting for tax purposes is a major concern in the industry at the moment," HashChain CEO and Founder Patrick Gray said [https://bitcoinmagazine.com/articles/hashchain-technology-acquires-blockchain-company-node40 ] , "The recent Coinbase subpoena from the IRS highlights the significant need for the software developed by NODE40."
Finally, Hashchain also has a "masternode" for the Dash currency, which earns Hashchain a tidy 8 percent return. The Dash network pays out masternodes at a rate of 6.67 Dash per month - and even better for Hashchain, the value of Dash is on the rise.
It's a compelling narrative. Hashchain plan to develop a diversified cryptocurrency basket for investors: cryptocurrency mining, exposure to coins, software to profit from the shift towards regulation, and topping it off with a Dash masternode.
#3 Accenture (NYSE: ACN)
Accenture, the global consulting and technology firm, is arguably at the forefront of blockchain technology. Accenture can claim leadership on multiple fronts in the blockchain space, working with industries, governments, the academic community and crypto-tech experts.
Accenture is a founding member of the Enterprise Ethereum Alliance (EEA), which connects Fortune 500 companies, startups, academics and tech companies with Ethereum experts.
Accenture is also premier member of Hyperledger, an open source collaborative effort to advance blockchain technologies across various industries. Accenture is actually on the board of directors of Hyperledger, which boasts 130 members worldwide.
Most importantly, however, when companies decide that they want to implement blockchain technology into their individual business, they are going to hire companies like Accenture to help them do it. And because Accenture has developed an expertise, the richest corporations are going to pay the consulting firm to flesh out their ideas on how to use blockchain.
In one instance, Accenture helped [http://www.cityam.com/278982/bitcoin-mere-drop-ocean-blockchain-opportunities-were ] the United Nations develop biometric data using blockchain to help provide documentation to millions of refugees that didn't have legally documented identities.
There are countless opportunities across an endless number of sectors in which blockchain can help solve problems.
In other words, Accenture offers a unique opportunity for investors - rather than placing a risky bet on a cryptocurrency, which is an extremely specific bet, Accenture offers upside to the broader trend towards blockchain development.
#4 Microsoft (NYSE: MSFT)
As a leading computing and technology company, Microsoft is an obvious choice.
Microsoft has developed Azure, which supports a rapidly growing number of distributed ledger technologies that target specific problems for a business. Azure provides a rapid, low-cost, low-risk, fail-fast platform, all located on the cloud.
The Microsoft Azure platform has solution templates for companies to customize and deploy their choice of blockchain network. Much of it is automated and can be setup in minutes using Microsoft Azure computer, networking, and storage services across the globe. Users are charged based on the underlying infrastructure resources consumed, meaning the amount of storage, computing and networking.
The advantage here is that it is integrated with the wider Microsoft ecosystem, which means that in the future world in which blockchain is ubiquitous, Microsoft could be dominating the space in the same way it does with everyday computing.
Reality Shares Nasdaq NextGen Economy ETF (NASDAQ:BLCN), an ETF that tracks blockchain technologies, includes Microsoft among its top 10 holdings [https://finance.yahoo.com/quote/BLCN/holdings?p=BLCN ].
#5 Mastercard (NYSE: MA)
Mastercard is another obvious bet on blockchain, owing to the company's deep interest in the financial system and payment services. Mastercard is going big on blockchain, and according to Envision IP, the company has 27 patents related to blockchain technology, tied with IBM (NYSE: IBM) for second.
Mastercard has the world's second largest payment system after Visa (NYSE: V), and it is testing a blockchain platform to process business-to-business payments. "The challenges of speed, of transparency and costs -- both in domestic and cross-border payments in B2B -- are more interesting than trying to find technology looking for a problem to solve in consumer payments," Mastercard CEO Ajay Banga said [https://www.bloomberg.com/news/articles/2018-01-16/bofa-tops-ibm-and-payments-firms-with-most-blockchain-patents ] , on a call with analysts last October.
Blockchain is aimed at the "manipulation of data, and that's why it's really taken off in the payment-processing industry," Shah added. "This is only going to increase."
Mastercard also has another incentive to develop blockchain. The cost of fraudulent goods is estimated at $1.4 trillion globally. Blockchain promises secure, confidential and transparent payments which can help severely cut down on fraud and abuse. Mastercard, unlike some of its competitors, is not waiting. Late last year it began allowing certain banks and merchants to process payments [http://fortune.com/2017/10/20/mastercard-blockchain-bitcoin ] on its blockchain.
Mastercard is hoping to use blockchain while avoiding cryptocurrencies - its blockchain platform works with traditional local currency rather than cryptocurrency. Crypto advocates may not like that, but the flip side is that the platform could demonstrate the importance of blockchain that goes far beyond cryptocurrencies.
In future years, when blockchain is used in every corner of the global economy, historians will point back to a few moments when a handful of large companies began using the blockchain as a critical juncture for the technology, helping to spark mainstream adoption.
Honorable Mentions:
Celestica Inc. (NYSE: CLS) is a manufacturer of electrical devices used in IT, telecommunications, healthcare, defense and aerospace industries. The company has seen strong growth YoY which we expect to continue as the sales expectations are almost 3% better than last year's.
While many investors thought the stock was overvalued after a stellar run in 2016, the recent correction and volatility in the stock has attracted new buyers and the stock has recovered since.
By. Joao Piexe
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Certain disclosure in this release constitute forward-looking statements. These include that KASH will dramatically increase operations, that the 3,000 Rigs will be successfully delivered, the 3,000 Rigs will perform as expected by management and the timing, installation and performance of KASH's current and ordered Rigs will be consistent with management's expectations; that mining capacity will increase to mine 20 MW; that KASH will hold a diverse portfolio of cryptocurrencies through mining and otherwise; and that KASH's software can become part of a regulatory push for regulation of cryptocurrencies. The forward-looking statements in this release are subject to numerous risks, uncertainties and other factors that may cause future results to differ materially from those expressed. Such risk factors may include, among others, the risk that the 3,000 Rigs will not perform as expected by management or that expected capacity is not achieved; that KASH may not earn cryptocurrencies through mining and may not be able to purchase them; risks related to changes in cryptocurrency prices, and the profitability of mining them; that cryptocurrencies will not increase in use as expected; that cryptocurrency regulators don't accept KASH's accounting and other solutions; risks associated with competition offering better or cheaper solutions, attracting away employees or using tactics to drive out competition; capitalization and liquidity risks including the risk that the financings necessary to fund continued development of KASH's business plan may not be available on satisfactory terms, or at all; the risk and the risk that cyber-crime may severely damage the value of any or all of KASH's investments. Accordingly, readers should not place undue reliance on forward-looking information.
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