Although the concept of blockchain was a ground-breaking one, it took some time for it to gain traction as a viable way to approach business, investment, finance, and operations. In the simplest of terms, a blockchain is basically a series of tamperproof transactions between parties who engage in exchanging assets without having to rely on a third-party to oversee their trade. Blockchains track these interactions while maintaining consistency across a database that provides data security and privacy and transparency, all at very low costs. Although blockchain was first introduced in 2008, it wasn’t until the ICO boom of 2017 that it really became clear to the mainstream public just how transformative the technology was.
Until very recently, we relied on slow, ambiguous, and complicated ways of recording data, verifying transactions, and keeping track of processes – including everything from procurement and legal record-keeping to financial legislation and public as well as private information. The matter was complicated by the fact that many people did not understand the technical terminologies used by each specific industry. If a banker told an investor that they suffered a margin loss, or that a stop-trade went wrong, there wasn’t much that could be done but to trust the word of the professional. The same applied to legal issues; if a lawyer said that someone was defrauded, or that there was a tort case on a property, the owner usually had to pay his or her way out of the mess with little recourse to a second opinion or alternative solutions.
Disrupting the Market
Blockchain brought with it the promise of transparent, auditable, clear, unambiguous, and reliable record-keeping. If someone performed a certain action, or if a trade was made, or if certain events occurred, the blockchain would record it, and the record was permanent and could not unilaterally be changed.
The importance of this cannot be overstated: it took the power from institutions and gave it to the people.
Investment in Crypto
With the introduction of blockchain came transparent, auditable, and verifiable transactions that were open to everyone. The general public now had the power to invest in projects and initiatives of their choosing without the restrictions of technical jargon or going through the difficult process of obtaining certifications for trade on centralized exchanges (such as a stock broker’s license). As a result, the money poured in, and the crypto boom ensued.
Every new idea is not without issues, unfortunately.
Firstly, many people still do not understand the underlying technology behind blockchain and cryptocurrencies. Also, since the market is open to everyone around the globe all the time, it is a truly 24/7 market with no close. Because of this, and because of the nature of blockchain projects and the social hype they have been able to generate, investment vehicles of all sorts (in other words, cryptocurrencies and assets) exhibit very high levels of volatility, and trade takes place on hundreds of different platforms, from online exchanges to specialized hedge funds. According to data from the Autonomous NEXT, there are 226 crypto funds as of February 2018, and its number is expected to increase further.
Ordinary Hedge Funds vs Crypto Hedge Funds
Crypto hedge funds are marked by high volatility, an absence of clear rules, and currency decentralization. Crypto hedge funds generally manage portfolios of cryptocurrencies and have the following characteristics:
- High volatility
- Speculative markets
- Low liquidity
- The risk of pump and dump
- Vulnerability to hacking
- A lack of reliable trading facilities
High volatility results in both high risk as well as high returns, but because many reliable projects have issued cryptocurrencies native to their own platforms, these coins are backed by real benefit and are expected to grow in value over time. However, high speculation, a lack of effective trading tools, high rewards for circumventing system securities (in other words, hacking), all make this a very risky industry to trade in. Furthermore, a lack of legislation and clarity on crypto classifications make tax issues and government intervention two threats that stand in the way of mass adoption.
A group of experts in the fields of finance, investment banking, law, and technology has developed the SPINDLE project. This ambitious project aims to provide a comprehensive space that enables everyone, regardless of his or her background and experience, to participate in cryptocurrency investment independently.
Mr. Hirai, one of the project founders, states that hedge funds make it difficult for general consumers to distinguish good and bad products. SPINDLE, therefore, aims to enable people to educate themselves and lower the risks of investment to benefit from the value created by crypto projects.
Because it is built on blockchain technology, SPINDLE’s Zeta is an investment matchmaking platform that provides unalterable and highly transparent information based on blockchain ledger entries and smart contract technologies. Data on the history, growth, profit, and performance of participants in the cryptocurrency space publicly available and searchable, and it allows customers to make judgments on investment options based on information that cannot be falsified.
Using Zeta, customers can make direct investments such that no third party can intervene in the investment process. Such investment are immediately recorded in the blockchain using smart contract technology so that the relationship between investors and asset managers is created on equal terms without the need for conventional banks or securities companies to act as intermediaries.
The benefits are not limited to privacy, easy participation, and cost-savings, although these are three major benefits that cannot be discounted. The most important benefit of the SPINDLE project is that common investors will have access to the knowledge and investment advice of professionals who can guide them in their investment decisions. Advice ranges from which projects to invest into when, based on anticipated market fluctuations, to buy or sell an asset to maximize profit.
Both traditional, as well as crypto hedge funds, handle billions of dollars’ worth of trade and investment annually. However, traditional funds lack transparency and are difficult to participate in, and crypto funds generally face high volatility and a lack of clarity into which assets are the best options to choose for investment. SPINDLE brings together the best of both worlds and removes their shortcomings by creating the first match-making platform for private investors and cryptocurrency funds where users are able to compare transparent information about each crypto fund and connect with asset managers of their choosing to help them diversify and grow their investments. These managers are extremely experienced and knowledgeable in matters of financial investments, and they are skilled in applying aggressive investment strategies along with complex risk management tools.
To learn more, visit Spindle.zone and embark on your journey to crypto investment 2.0.
Images courtesy of SPINDLE