I don’t need to tell you that cryptocurrency prices are down. Way down … as much as 80% to 90% from their early 2018 highs.
However, the underlying technology — blockchain, also known as Distributed Ledger Technology — is being used for much more than just cryptocurrencies. In fact, its use is skyrocketing by the week.
JPMorgan reported that blockchain’s most valuable use is not in re-inventing the world of money but, rather, in verifying and recording transactions.
Let me give you a couple of compelling examples …
Example #1: HSBC is one of the largest banks in the world. Last year, it used a blockchain-based system to settle over 3 million forex (currency) trades and made over 150,000 payments worth $250 billion.
Yes, $250 billion!
What’s behind HSBC’s move to blockchain? Simple. HSBC said that blockchain is automating the settlement system. Beyond that, blockchain is helping the company reduce costs by eliminating its reliance on outside technology vendors. It has also lowered errors and delays. The result: higher profits.
Sounds like a win, win, win, win, win to me!
Example #2: There is a lot more to Amazon than internet shopping and two-day shipping. Now, it is offering two blockchain services.
When Amazon reported its quarterly results on Feb. 1, it disclosed that its cloud division, Amazon Web Services, pulled in $25.7 billion of revenues in 2018.
To put this $25.7 billion into context, that is more revenue than McDonald’s pulled in for the entire year! (The company with the golden arches brought in $21 billion.)
To further put that $25.7 billion into context, that figure is up 47% from 2017.
Plus, we have every reason to believe that Amazon will crush those numbers again in 2019. That’s because it is betting that blockchain could be as good for its bottom line as cloud services.
Amazon just launched two new divisions — Amazon Quantum Ledger Database and Amazon Managed Blockchain — that could ultimately prove to be even bigger and more profitable than AWS.
- Amazon Managed Blockchain provides turnkey blockchain platforms for customers to create their own blockchain network. The new Amazon blockchain services make it possible for anybody to set up their own blockchain network with just a few mouse-clicks.
- Amazon’s other new service, Quantum Ledger Database, allows users to securely dig into the details of their data to analyze it. Think of it as “big data” for the little guy.
How big will Amazon’s blockchain services grow? Nobody knows for sure, but for Amazon (and its shareholders), blockchain services could become one of the largest — if not THE largest — source of revenues and profits.
I could go on with other examples, but I cite HSBC and Amazon because they are two of the most important players in the banking and retail industries.
They aren’t newcomers taking a flyer on some untested technology. They know how to make money, and a lot of it.
Related post: The biggest crypto investing mistake is also the easiest to avoid
I’m not suggesting that you should buy stock in HSBC or Amazon. (Although I suspect both will be long-term winners because of their blockchain initiatives.) Instead, look at the stocks of companies that are providing the basic building blocks of the blockchain food chain.
Peter Lynch of Fidelity’s flagship Magellan Fund used to talk about “ten-baggers,” which were stocks that went up in value by 1,000% or more. And the one industry that is bursting at the seams with ten-baggers is blockchain.
Join me in the quest to invest in the next big blockchain winners, click here. The time is now to jump on board!