Interest in the stock market has never seen such diversity as it has in recent years. Technologies have extended interest to a range of demographics that previously did not give much thought into investing and the public markets. Instead of requiring large account balances, persistent fees and unintuitive interfaces, digital first brokerages like Robinhood have proliferated access to the markets in a manner never before seen. Modern “robo-advisors”, like Wealthfront, provide easy access to financial advice to those who would previously not seek it, and micro-investing apps like Acorns make investing a passive, but profitable experience. While these solutions work great for those just getting started in the public markets, how do investment firms with billions of dollars on the line find appropriate investments?
The term blockchain has been floating around both the tech and finance communities a lot in recent years. But what is blockchain?
Blockchain is a digital ledger of all transactions across a peer to peer network. Each user in the network will have a full copy of the whole blockchain, which includes data of all transactions. Let’s say a user wants to pay another user. He would encrypt the transaction and broadcast it to the network. The transaction gets put into a new block. The ledger is maintained by miners, who work to approve the transaction and validate it using cryptographic techniques. Then the block is added to the blockchain.