Ripple’s XRP has the third-largest market cap in the cryptocurrency world, but what gives it value? Ripple Lab’s intent was not to be a store of value or a currency, per se, like Bitcoin. Neither did it intend to be a platform for developers to explore the possibilities of blockchains, like Ethereum. Ripple was always focused on being a payment system, facilitating transfers between banks, currencies, and countries in a way that would not be possible without blockchains. Continue reading...
Investing in a private placement opportunity is done off-exchange, and usually involves a small number of investors who are either institutions or accredited private investors. There are many possibilities when it comes to the types of private placement investments that can be made, but the nature of the offering is that it is not public, it is made to a small number of institutional level or individual accredited investors (see Regulation D, Rule 505 and 506), and the offering is not registered with the SEC. Continue reading...
In the world of finance, private equity is a relatively new industry whereby private companies finance other businesses through direct investment, often in exchange for equity in the company and in some cases, decision-making capabilities. Private equity companies generally use capital of the principals or of high net worth investors to strategically invest in growing companies that need growth capital or seed capital to expand operations. Continue reading...
The overarching theme of blockchains is that they can provide security and asset verification in a decentralized system, which is perhaps the best-known method for preventing fraud. Blockchains are a technological revolution that provides an opportunity to establish strong systems for digital identity. Here are some of the applications and uses for it: A user can authenticate a unique physical item by pairing them with a corresponding digital token. In that sense, these tokens serve to connect the physical and digital worlds. With a token assigned to each physical good, that can revolutionize supply chain management, managing intellectual property to prevent counterfeiting and fraud detection. Continue reading...
Blockchain technology is a decentralized network structure used to obtain consensus on changes to a ledger shared and distributed throughout a system. Blockchain technology allows for peer-to-peer trust-less validation and record-keeping that is superior to centralized database systems in many situations, in terms of security, reliability, and efficiency. Blockchains tend to be integrated with smart contract technology that serves as the mechanical-legal framework for interactions between the co... Continue reading...
Blockchains create an indisputable digital record that is decentralized, i.e, cannot be changed by a single actor. Using blockchain is generally for digital security. Here are few reasons to use a blockchain: Tokenization A user can authenticate a unique physical item by pairing them with a corresponding digital token. In that sense, these tokens serve to connect the physical and digital worlds. With a token assigned to each physical good, that can revolutionize supply chain management, managing intellectual property to prevent against counterfeiting, and fraud detection. Continue reading...
Ethereum is an open-source, public, blockchain-based distributed computing platform. Ethereum provides a cryptocurrency known as ether. Ethereum is a decentralized platform that runs what are known as “smart contracts.” Smart contracts are applications that run on custom built blockchain, which functions on its own accord through rules programmed into the protocol, and which also makes decisions and keeps records based on consensus throughout a peer-to-peer network. A blockchain oversees its own activities without requiring any trust in a central authority or the other parties involved. Continue reading...
A distributed ledger is a records system in which the same information is held redundantly across many nodes in a network, and is essential to blockchain technology. Centralized databases used to be the primary way that important records of transaction histories and so forth were held. Databases validate the identity of those requesting access to the records by asking for and retaining personally identifying information. If that office building were to lose power, was hacked, or was destroyed, it is possible for all of the information to be lost or given over to hands of bad actors. Even with cloud storage backups, the security and financial risk to any one of these storage depositories remain a problem. Continue reading...
Different opportunities to invest in private placements may present themselves to wealthy individuals over time. Unless the opportunity comes from someone that you know and trust, and you have the ability to research the opportunity, it is probably something you should avoid. Private Placements are sometimes complex deals that cost people a lot of money. You should definitely have your guard up if one is pitched to you. In general, the company or partnership seeking the private placement will not have to register with the SEC or report their books accurately on a public record. Continue reading...
Blockchain is an emerging technology and arguably one of the next “big things.” As with anything so big and impactful, it comes with a few issues and limitations. Before even diving into the technology behind blockchain and potential issues, perhaps one of the broadest issues facing blockchain is gaining the public’s trust. Blockchain is not only a new technology, it also comes with its own language, literally. There are numerous terms and definitions that accompany a person’s grasp of blockchain, and it can take some commitment of reading and learning to figure out. Not everyone is willing or able to do that. Continue reading...
Two words: blockchain technology. Transactions in bitcoin are encoded, packed into a block of other transactions, and all of these are sent out to thousands of computers running blockchain computations, known as hashes. All of these computers are running similar algorithms designed to force honest work and to take time for the computers to complete. The purpose of this step is merely forcing the blockchain to require time, energy, and effort, and to be randomized and decentralized when it is validating transactions. Whichever computer solves it first receives an incentive reward, and the entire blockchain, comprised of all computers running bitcoin client software, then updates the ledger to include the most recent validated transactions. Continue reading...
Blockchain technology does not always have to be implemented in a public peer-to-peer system. Blockchains rely on a network of computers, representing nodes, that collaborate and distribute the information required for the blockchain to function. The nodes in some blockchains can be established by any computer willing to run the client software for the network. Bitcoin and most cryptocurrencies are intended to function this way: as a public, open-source, permission-less, and trust less network. The nodes are used indiscriminately by the rest of the network as long as the node is performing the functions required of nodes, and this is called a proof-of-work system. When Satoshi Nakamoto coded the first blockchain, his intention was to keep the network functioning with only one tier: “one CPU, one vote.” That vision has encountered obstacles in the form of ASIC mining and other unforeseen circumstances that have empowered some nodes and groups of users over others. Continue reading...
The code for most cryptocurrencies is open-source, and the community operates by consensus, so sometimes newly modified code is released that is adopted by some, creating what’s called a fork. A Bitcoin Fork is when the blockchain, made up of interconnected computers holding a distributed and permanent record of all bitcoin transactions up to that point, is offered a modified currency protocol that is adopted by some of the Bitcoin community, which creates a “fork” in the previously longitudinal history of the ledger (i.e. “a fork in the road”), where one ledger continues to grow based on the changed protocol, and one ledger continues to grow with the old protocol still intact. Continue reading...
Blockchains are intended to maintain integrity in the system without anyone needing to monitor or control it. By instituting a system of checks and balances that functions on its own accord through rules programmed into the protocol, and which also makes decisions and keeps records based on consensus throughout a peer-to-peer network, a blockchain oversees its own activities without requiring any trust in a central authority or the other parties involved. Continue reading...
Blockchain, if applied on a broad basis, could lower costs substantially for both financial institutions and consumers, while also preventing fraud. This could upend the financial markets as we know it, in a good way. With blockchain, virtually any type of asset can be stored digitally and securely, meaning that money, equities, bonds, contracts, deeds, etc.. can be moved from peer to peer with little to zero fear of fraud, and no vulnerable (or costly) intermediary like a bank or a government. Continue reading...
The pseudonymous inventor(s) of bitcoin and blockchain technology, Satoshi Nakamoto, likely walks among us today. Satoshi Nakamoto was the pen-name of the author(s) who anonymously gave the world the design and code for bitcoin and blockchain technology. Penning a white-paper entitled “Bitcoin: a Peer-to-Peer Electronic Cash System,” the author(s) described the need for a decentralized digital currency and proposed blockchain technology as the way to validate digital transactions with a distributed ledger. Continue reading...
Private placements fall under Regulation D, usually, which stipulates the rules by which investors can be sought and placed into privately arranged contracts for equity investments. Private placements may be for non-public companies, or it may be a private offering of a publicly traded company. Regulation D stipulates the guidelines by which investors can engage in private investment without many reporting requirements. Continue reading...
Blockchain technology is already being used and developed for many important and impressive applications, and much more is yet to be discovered. Blockchains use distributed work to obtain consensus for changes to a distributed ledger. Because of their nature, blockchains are incredibly powerful tools that can be used in many realms and applications. They offer security in that they are almost unhackable; any attempted unauthorized changes to the system are immediately obvious to the entire system because it is built on agreement and consensus among its many nodes. Because this structure gives each addition to the ledger, and the record in the ledger, a high degree of integrity and security, future applications of blockchains are being researched in various fields around the world. Continue reading...
The short answer is, you can’t. Private placements have no reporting or registration requirements with the SEC or other entities. Sometimes this can be good for investors who enjoy the discretion. But it can also be a shield for unethical business people who prefer to avoid regulatory oversight. There is no source for detailed information about private placements unless you personally know a general partner who can describe to you his project, or who comes highly recommended with a lot of references. If an offering seeks to raise over $2 million in the capital in a year’s time, they are obligated under Regulation D to provide audited financial statements to the investors. Continue reading...
ICO is an acronym for Initial Coin Offering, and it is the primary way that new companies can use blockchains to raise capital. Many entrepreneurs have gotten their start in the last decade through crowdfunding sites such as Kickstarter, where anyone can contribute funds to help an idea get off the ground. Obviously, such funding methods were bound to reach new heights when peer-to-peer blockchains came onto the scene. Blockchains allow transfers of value anywhere in the world without regulatory... Continue reading...