Since inception, blockchain has been widely praised as a global revolution and with time, it proves to be an amazing technology that can completely change the way, we run this world. It seems to be equivalent of financial fairy dust by tremendously increasing the market value of companies that have simply adopted this technology. Therefore, businesses are assessing and evaluating that how blockchain can benefit their operations.
What is blockchain?
Blockchain is an electronic database of transactions, whereby new data is added to the chain, it becomes protected with the help of a mathematical equation. The database is shared among numerous computers so, whenever a new transaction is added, the information is updated on every device — making it virtually impossible to hack it, change it or manipulate it.
Blockchain technology offers a verifiable, yet immutable, and transparent public record, which gains a number of advocates for it.
Where is it being used?
Mainly, the technology is used behind the virtual coins (such as bitcoin) that are being created, stored and traded online. However, experts opine that its potential is far greater than just being used in crypto-currencies world. Still, if we just talk about investment, the most exciting way with which many ventures implement blockchain technology, is the initial coin offering (ICO), which has already captured the attention of investors globally.
Though the new capital raising mechanism is not completely owned or defined by the government regulators yet, significant increase in the capital is witnessed for the new projects. This modern capital raising model strongly urged new business ventures to raise huge capital without offering formal ownership or obligation to coin investors. Likewise, coin investors also prefer to invest in blockchain ventures without having to prove that they are accredited.
How can government regulate blockchain ventures?
Initial coin offering (ICO) has conferred a global access to the investors enabling them to raise huge sums of capital within short span.
On the other hand, this unregulated market holds the potential to harm investors such as, few such ventures have dissolved prior any product delivery. ICOs provide a unique way of raising capital investors and market regulators have demanded for an intelligent and tempered regulation for this model. It is because the inequality privileges proprietors of ICOs over their investors.
Business ventures that abide by the barriers of securities issues developed by the government regulators come up with an authentic business plan and raise a targeted capital will empower their beneficiaries while reducing the inequality.