Blockchain creates new opportunities for investors
With cryptocurrencies under scrutiny and increased concern for cybersecurity due to sophisticated hackers, the demand for more secure decentralized financial systems is increasing.
This focuses attention on the role of blockchain-ledger systems in driving other business applications that can create future investment opportunities.
“Blockchain is branching out into new business applications and may prove to be as important an innovation as the development of the Internet itself,” said Jonathan Piskorowski, Leading Portfolio Manager for the BNY Mellon Blockchain Innovation Strategy.
“You would be hard pressed to think of an industry that had not in any way been transformed by the internet, and we think this will prove the same for Blockchain over time,” he added.
Blockchain breeds new potential
Consumers are increasingly on the lookout for centralized financial and digital intermediaries who can control and use their data.
Furthermore, access to financial products and services for underbanked populations remains a global problem that BNY Mellon IM believes can be improved by regulated decentralized solutions that democratize consumer finance.
Taking that approach, for example, makes it much more difficult for hackers since data is not stored in a single location.
In turn, blockchain is increasingly used in the transfer of goods, services and data far beyond the financial industry.
As a result, there are opportunities to apply the technology in such diverse sectors as healthcare, shipping, real estate and supply chain management.
“Blockchain technology can provide all the aspects a business or organization may need for a decentralized general ledger,” Piskorowski added. “Any centralized business function involving multiple independent parties that are reluctant or unable to share information can benefit from transparency, efficiency and asymmetric data sharing built into blockchain-based solutions.”
An example of this is health services, where different units can perform their process in real time instead of queuing for their turn via a central intermediary to record information. “This can help eliminate friction and improve overall efficacy and patient outcomes,” Piskorowski said.
Ready for regulation
The potential for blockchain and investors will also grow in line with the development of regulation in the technology area.
For example, the forthcoming European Digital Markets Act is expected to require some leading technology giants to open up their services and platforms to other businesses.
“There is growing concern about the power of some of the huge technological ‘titans’ sitting at the heart of the network to gather all available data and information,” said Robbie Henderson, portfolio manager for the BNY Mellon Blockchain Innovation Strategy.
“We believe new regulations can help create room for the blockchain to create a technical solution to the problems of centralization through what is a genuinely democratically digitized ledger network.”
At the same time, the meta-verse can create new opportunities for blockchain, Henderson added. “[It] may contain the potential for brands to monetize themselves in new ways. “
