The digital age has raided the human behavior and is redefining it. From the way we communicate, run businesses, make payments, and invest, things are very different from how they used to be in the past.

The blockchain technology is offering an adopted benchmark for the creation of better operational models making it possible for communities to become part of the enterprise and drive peer2peer transactions.

Blockchain technology has become the better option for transferring value, sharing data, selling computing power, and decentralizing many industries to help kick out the middle-men. Many companies keep coming out every day proposing services and products in blockchain technology including leisure, logistics, real estate, and financial services among others. The primary goal of going crypto is helping to cut cost and raising efficiency.

ABC Summit — Lisbon — 28–29 September 2018

The line separating blockchain from cryptocurrencies

If you ask many people, the term blockchain and cryptocurrencies can be used interchangeably.

In fact, some will even refer to it as Bitcoin. While it is true that blockchain and cryptocurrencies go hand in hand, they are indeed very different. Blockchain is a technology, distributed ledger type of technology that creates blocks of chains with data that pooled together, verified by nodes in a network, and permanently stacked chronologically.

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Blockchain refers to service or data that does not necessarily involve a currency. In many cases, cryptocurrencies provide a great method of rewarding people who use a specific blockchain network. Tokens issued through ICOs (Initial Coin Offering) have become a great way of raising funds to drive projects.

The tokens can be equated to shares in the conventional market. However, they differ sharply in that token holders become part of the owners of a specific project and are called upon in making decisions, verifying transactions, and advancing the respective project.

The biggest issue with ICOs is that they do not have a legal framework. In some countries such as China, they are getting banned for association with fraud.

The crypto market and price volatility

Take a closer look at most cryptocurrencies and one thing that will be imminent is high volatility. By the close of 2017, the price of the leading cryptocurrency, Bitcoin, shot through the roof to $19,500 in the crypto market out of speculation. This price has now taken a negative turn moving steadily down by 200% by 20th June. This volatility is what has been worrying most investors.

New investors have particularly become worried about these shifts for fear of their investments. But the technology, like many cryptographic solution experts indicate, is an idea whose time has come. Therefore, there is a need to look beyond price volatility. How is this possible?

When the cryptocurrencies’ price moves up and down, it is preferable not to look at that from the simple point of losing value. Rather, the cryptocurrencies are tracing the correct value based on market demand.

Another idea of stemming volatility is going for asset-backed cryptos. Unlike the speculation based cryptocurrencies such as Bitcoin, asset-backed cryptos are relatively stable. Because they are attached to real assets such as gold, real estate, or other assets, investors feel they have something to hold onto.

Therefore, they are ready to hold their assets without worrying of extreme volatility.

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Why blockchain technology is booming?

The year 2007 saw the blockchain technology and its application grow rather fast. Call it supersonic speed. Indeed, many administrations never got a chance to fully conceptualize the whole concept. This is probably the reason why some have been overly reactive and opted to ban some crypto-based activities such as trading and mining.

Despite little understanding of blockchain technologies, many countries are still very positive about them. The EU, Canada, South Korea, Russia, and Brazil among other jurisdictions that consider blockchain based businesses legal. In fact, even China that has been very critical of cryptocurrencies is experiencing related technology boom.

Now changing the stand after a jurisdiction passed crypto related legal frameworks allowing people to pay taxes with cryptocurrencies. There is no doubt that better things are at the corner.

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The blockchain regulations

For many countries, the relationship with cryptocurrencies is based on suspicion. As indicated earlier, the laws are taking too long and causing unnecessary confusion in the market.

Here, one is left with one question; which is the right direction to follow with regulations? Here, it is important to borrow from the entities that have created some form of legal frameworks.

In Russia, the administration proposed a draft legal framework that is meant to guide all the concepts of cryptocurrencies. This draft law calls for greater control, KYC (know-your-customer) strategies, and review of ICOs to protect consumers. Though this draft law has attracted criticism from some quarters, experts indicate that it will spur blockchain technology use in the long term. For a crypto project that is genuine and that has nothing to hide, the law will help propel it to the next level. In the United States, the state of Arizona passed Senate Bill 1091 that allows citizens to pay their taxes with cryptocurrencies. This demonstrates that when applied appropriately, the blockchain laws and cryptocurrencies have very many great applications including those that touch people’s daily lives. In Singapore, the administration has said that there is no difference in law between a person who pays with crypto assets and another who does so with fiat currencies.

A closer look at the current progress of blockchain technology reveals one thing; it can only grow to the next level.

Do not be left out. Take time to become part of this new system and technology to enjoy associated benefits. Your business can benefit a lot from specific blockchain related projects or even seeking funding by issuing tokens.