In this Make Blockchain Work series, I discuss how blockchain technology could be best applied to financing and investment in nine chapters. It is from these reflections that we devised the world’s first marketplace for tokenized real-world assets, IdeaFeX. I prefer not to touch on ideological or debatable subjects, because a strong business model must be built on resources, including technologies, available now while thriving on agility to adapt to future developments. In this series, I will insert some of the posters that we have published on our social media platforms.

Access

In the last chapter, I discussed how flexibility afforded by blockchain technology empowers financing and investment. Today, I examine a quality that is the other side of the same coin but meaningful in a different dimension — access.

To many blockchain enthusiasts, access is almost a religious issue: a leading slogan of Bitcoin supporters is that anyone with internet connection can be banked. In financing and investment, this aspect is more nuanced. Simply put, while blockchain lowers the bar from a technology standpoint, without care the market can easily be flooded with scams. In turn, scams can fatally damage the market, resulting in diminished access — back to square one.

The type of access that I talk about is access to good financing and investment opportunities, with real-world assets, by audited fundraisers, open to informed investors. It is essentially the other side of the same coin to flexibility.

For investors, the stock market is relatively accessible compared to most assets. Collectibles, commercial real estate, infrastructure, business assets, inventory, and venture capital, etc. are much less so. In most cases, only highly wealthy individuals and specialized institutional investors include them in their portfolios. Being tampering-proof and easily fractional, blockchain technology makes it possible to support these assets on a technology level similar to traditional securities such as stocks. On a trustworthy platform with financing projects that have gone through external audits or that use credible custodians, investors can safely access investment opportunities to which they used to be excluded.

This is a fundamental value of IdeaFeX. With our support of diverse asset classes, investors are more likely to find opportunities that they are enthusiastic about but have so far been unable to access. With the fractioning of each asset, small investors can participate in the same way as large, wealthy individuals or institutions. Essentially, this type of access to good opportunities democratizes investment — this is the other meaningful dimension that I mentioned earlier. For more details about how IdeaFeX makes this work, I encourage you to read our Token White Paper available on our website.

For fundraisers, what blockchain offers means not only higher flexibility in choosing with what they raise funds but also better access because not all highly-accessible options are open to everyone. For most, there is but one or two options at best, and many businesses fail prematurely because they cannot access external funding at the right moment — the valuable assets that they have and that are attractive to many potential investors simply lack the marketplace where funds can be raised. By offering this marketplace, IdeaFeX makes it easy for fundraisers and investors to connect with each other. As more diverse asset classes are supported, access to good financing opportunities is also democratizing for fundraisers.

Therefore, in this instance good access is truly a win–win situation for investors and fundraisers alike.

Moreover, as financing opportunities become more accessible, inefficiencies that used to disenfranchise many businesses are reduced (I will cover this in detail in a later chapter). Ultimately, companies can enjoy a merit-based financing system where personal, geographic, and sectorial factors take the back seat.

This article is written by the CEO of IdeaFeX, Dr Jiulin Teng. You can follow him on Twitter or LinkedIn.