Blockchain technology is sometimes characterized as the biggest thing since the Internet, and this may arguably be the case. It has the potential to transform just about anything involving record-keeping, ownership status and transactions, and the reality that this transformation is already underway signals a potential financial revolution.  

Blockchain is the primary tool of DeFi, which refers to proponents’ goal of decentralizing global financial systems and empowering wholly new business models that will disintermediate traditional financial institutions, dissolve borders and enable 24/7 access through DIY (do-it-yourself) and P2P (peer-to-peer) functionality. The idea behind DeFi is to cut out the middlemen—centralized, intermediary companies such as banks, brokerages, insurance companies, you-name-it—and enable people to conduct transactions on their own. Many blockchain-related startups and facilitators are focused on this iconoclastic goal.

However revolutionary blockchain might turn out to be, many already view it as being highly impactful. According to a recent survey by KPMG, 48% of corporate executives expect blockchain to change their businesses in the next three years, based on their current knowledge of the rapidly expanding array of developing applications. The breadth of these applications seems limited only by the imagination.

Like the Internet, which eventually took the Netscape moment to significantly drive user adoption, blockchain’s open-source code, made available free to all online in the 1990s, at first languished largely unnoticed. It was not until blockchain became the transmission vehicle for Bitcoin, which debuted in 2009 as the first cryptocurrency, that it began to acquire renown and potential use cases for the technology started to emerge.

It has only been over the last couple years that blockchain has become an investment buzzword. As a consequence, related investment opportunities have grown apace over the same period, as startups dedicated to various applications have drawn the attention of venture capitalists.

Just as you can’t invest in the Internet directly, you can’t make direct investments in blockchain. Yet, there are a number of ways to invest in it indirectly. Here’s a snapshot of ways to invest that don’t specifically involve Bitcoin or other cryptocurrencies:  

• Buying shares of public companies that you believe will materially benefit from blockchain tech. These include:

• Various companies providing the metaphorical picks and shovels for the industry--manufacturers of ultra-high-powered computer hardware (such as Advanced Micro Devices), used by cryptocurrency miners, as well as mining firms (e.g., Hive), and emerging cryptocurrency exchanges that may go public.

• Companies that offer blockchain as a service, including providers of cloud-based services or consulting—e.g., IBM Blockchain (using private blockchain, a walled-off form of the technology); AWS’s (Amazon Web Services) services for building scalable commercial blockchain networks.

• User companies actively involved in developing blockchain for their specific purposes—e.g., Alibaba, Mastercard. Ironically, these intermediary companies (which DeFi is seeking to disrupt) are using DeFi’s chief tool to speed up processing and settlement times.

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