The Blockchain Sensation And Its Impression On Venture Capitalists

These days, we hear the term “disruptive technology” quite often. It is often used as a slogan for new products. If there is one technology that has really influenced almost every industry, it is blockchain. Venture capitalists are starting to feel this fundamental shift, but blockchain venture capital is only just beginning.

People who work in the tech industry are likely, or at least reasonably, familiar with blockchain and the cryptocurrency sensation.

Nevertheless, there is no doubt that there is a cohort of investors who have yet to embrace it to this day. They might not be investing in technology, so they haven't come across any blockchain opportunities yet. They may be an older generation of venture capitalists; are used to traditional forms of investment but recognize the legitimacy of this digital revolution.

Maybe they just haven't seen the relevance of blockchain to their own personal goals or objectives; Despite this, blockchain offers a solution to many challenges affecting venture capital today.

Whatever the reason, it is clear that this monumental technological advance is not going anywhere anytime soon.

Cryptocurrency is here to stay, and with it, the smartest investors are keeping an eye on market advancements to keep their finger on the pulse of the industry.

 Blockchain technology Introduction

So, what is it all about with this blockchain? Blockchain can be as complicated or as simple as you want it to be. Crypto gatekeepers tend to explain this in a confusing way.

Basically, blockchain is a database, a collection of data stored in a ledger; similar to a spreadsheet. The data is collected in groups or "blocks" which are then concatenated one after the other. When creating a block, all previous information is fully recorded.

No information in a block can be edited or modified without affecting the entire ledger; This, in turn, creates a digital trail with undeniable legitimacy and responsibility.

The overarching goal of blockchain is decentralization - an autonomous and robust ecosystem, independent of any entity or organization.

To put it in a relatable way, blockchain and associated technologies such as ICO (Initial Coin Offering) and STO (Security Token Offering) are directly comparable in their function to IPO (Initial Public Offering). Crypto startups use these STOs and ICOs to obtain funding and investments similar to the venture capital industry.

But before we get into the actual applications of this technology, let's take a look at some of the catalysts and developments that have driven this change in the industry.

The need for change

The term “disruptive technology” is widely used today; a slogan that seems to be attributed to all the newest and hottest start-ups. These businesses, while exciting, often do not live up to the revolutionary hype they have received.

True disruptive events and technologies are absolutely indisputable as to their effects on an industry. Disruptions usually occur after a period of stagnation, and their appearance will be a turning point for any industry. The venture capital industry has a long and brilliant timeline.

The last crucial development and greatest moments came when the tech bubble was in full swing in the late 1990s and early 2000s.

Simple portfolio diversification

Blockchain can help solve this problem by providing more liquidity by issuing tokens that can be traded on cryptocurrency exchanges.

The introduction of this blockchain in the business world would revolutionize the pursuit by investors of technologies such as AI, IoT, etc.

As mentioned earlier, blockchain has had a significant impact in other industries as well. It opened up equity opportunities for traditional and new investors.

With the growth of crypto and blockchain, fueled by early adopters, efficiency, security, and reliability have improved dramatically.

This change is in line with the way people have approached investing from the start. Venture capitalists use their money to help develop new ideas and technologies.

The transition to the use of blockchain will not only mean change, it will pave the way for a world where investing is more fair and compliant. Thus, both start-ups and investors would benefit from significant growth and increased liquidity.

Adoption of blockchain by capital investors

Over the decade, we have seen a slow but steady adaptation to this new technology as venture capital investments in cryptocurrencies and blockchain startups continue to accelerate.

To date, banks and financial services firms have become the most active investors - either through internal venture capital departments or through other strategic initiatives.

Interest from these companies validates the value and potential of technology and helps develop talent in the field.

Several venture capital enterprises have also focused exclusively on blockchain technology. One Important example is Blufolio.

Digital liquidity freedom

Venture capitalists can keep tokens in their portfolios and trade whenever they want. This gives investors full control and doesn't have to wait for the startup to be successful. Additionally, tokens allow investors to participate in a liquid environment while having the ability to close faster.

In addition to increasing profits, this new model would also facilitate access to venture capital. The liquidity of the asset facilitates investment in this sector.

Venture capital firms can also benefit from the contribution of new investors. After the success of ICOs, anyone can now invest.

STOs and ICOs aren't the only things to mix up VC, a full list of benefits expands the scope of this article.

The development of blockchain is fascinating to watch. Since 2009, most of the talk and effort has focused on technology. In today's industry, blockchain is dominated by business and entrepreneurial drivers rather than technological advancement.

Every industry needs regular reviews. Shaking up the venture capital industry and transforming the status quo brings the best possible results for founders, investors and pundits.

As we are always ahead of the mass adoption of blockchain and cryptocurrency, the future is unpredictable - venture capitalists and entrepreneurs will want to keep an eye on this space.