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Best Blockchain Stocks to Buy and Watch This February

  • Alex Morris
    📚 WikiCoin

    U.Today has come up with a list of Blockchain-related stocks you should definitely keep tabs on this February


Best Blockchain Stocks to Buy and Watch This February
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Despite the crypto rout, the hype around Blockchain — the technology that serves as underlying fabric  Bitcoin — never died down. More and more companies are dipping their toes into the technology. U.Today has decided to present you with the list of Blockchain-related stocks of the world’s biggest companies that could be on a roll this February.     

IBM [NASDAQ: IBM]

IBM, together with Microsoft, controls a whopping 51 percent of the Blockchain market. As U.Today reported earlier, the US tech giant is trying to capitalize on Blockchain technology in order to revive its brand. Hyperledger Fabric is an enterprise-friendly platform that allows other companies to build Blockchain-powered products. As of now, IBM manages more than 500 Blockchain projects around the world.


IBM

With that being said, IBM appears to be a top-of-mind option when it comes to Blockchain stocks considering the scope of its involvement in the nascent technology. Moreover, IBM stock was on a roll all of January, and its recent earnings report, which managed to beat experts’ predictions, made the stock soar even more.

Alibaba Group [NASDAQ: BABA]

Alibaba, the Chinese e-commerce behemoth that is responsible for filing almost 10 percent of all Blockchain-related patterns, is yet another trailblazer in the application of Blockchain technology. As of September, Alibaba and IBM were neck-to-neck in that department, with 90 and 89 patents respectively despite the fact that China has adopted a hawkish stance towards cryptocurrencies.

Like in the case with IBM, its Blockchain as a Service (BaaS) product is an enterprise-level platform that allows its users to build their own Blockchain-based projects. After a successful rollout in China, Alibaba is opening its Blockchain doors to the US and Europe, which might make the stock more attractive.  

Alibaba Group

The ongoing trade war between the US and China might shoo away those who consider investing in the stock, but there is no need to fret about it — MKM Partners states that Alibaba's stock will be able to withstand the macroeconomic woes. The company’s stock went up on Jan. 25.

Overstock [NASDAQ: OSTK]  

Amazon’s rival Overstock.com also uses Blockchain technology. Because of its crypto-friendly stance, the stock of the American retail giant skyrocketed a mammoth-sized 400 percent in 2017-2018.

Medici Ventures, its Blockchain-oriented subsidiary, constantly makes investments in various Blockchain-oriented projects. For instance, it bought a stake in a Blockchain-based agricultural firm  GrainChain on Dec. 10.

Overstock

Back in November, the pioneer e-commerce player announced its plans to ditch its retail business in order to go all-in with Blockchain. Hence, it became clear that its interest in cryptocurrencies is more than simply an attention-seeking stunt. U.Today reminds readers that Overstock was the very first major retailer to embrace Bitcoin. Overstock didn’t enjoy great success, losing almost $40 mln in 2018, which would be a worrisome sign for those who planned to buy their stock. However, on the cusp of launching its tZERO trading platform, which went live on Jan. 24, Overstock decided to reassign Medici’s top executive in order to boost its revenue. Hence, our verdict is that the stock would be a good buy this February.

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Qualcomm [NASDAQ: QCOM]

Qualcomm, one of the world’s leaders in wireless telecommunications products, currently utilized Blockchain technology in order to solve the pain points of its client-server based information system. However, the company is hush-hush about Blockchain-oriented patents it has up its sleeve.

The company’s stocks plunged 10 percent since December 2018, but some pundits claim that the stock has already bottomed. Hence, one might consider buying the stock this February to simply profit off its volatility (the stock is currently 32 percent off its 2018 peak).

Qualcomm

However, the fuss around 5G may be a fair reason why the chipmaker’s stock might also be a good option in the long-term perspective. Qualcomm is expected to dominate the modem chips market niche in the age of 5G along with Intel [INTC].

Comcast Corporation [NASDAQ: CMCSA]

US telecommunication behemoth Comcast is also betting big on Blockchain. On Dec. 21, 2018, the US-based telecommunications conglomerate published a press release where it stated that its Blockgraph product will become available for enterprises early this year (Comcast is currently testing the product with NBCUniversal). The initiative is supposed to help them share data in a secure and transparent way. Eventually, Blockgraph could become an ‘identity layer’ for the whole cable news industry.

Comcast Corporation

This is not the first time when Comcast makes a foray into the nascent technology – back in March, Comcast spearheaded a VC seed round of Blockchain startup Blockdaemon.

Why could Comcast stock be a good option for February? Its stock has recently risen due to earnings  that surpassed analysts’ initial predictions. On top of that, the company lost fewer video customers subscribers than expected.

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Other public companies

Of course, there are plenty of other publicly traded companies that didn’t make the cut. Here are some of the examples:

  • MetLife, Inc. [NASDAQ: MET] – works on Blockchain-based solutions for the insurance industry;

  • Ford Motor Company [NASDAQ: F] – spearheads a research group that examines the application of Blockchain in the car industry;

  • Goldman Sachs [NASDAQ: GS] – a crypto-friendly bank that mulled over opening its Bitcoin trading desk (the plan has been shelved);

  • Amazon [NASDAQ: AMZN] – one of the leaders in Blockchain-related patents, which has recently partnered with ConsenSys, led by Ethereum cofounder Joseph Lubin;

  • Nestle [NASDAQ: NSRGF] – the Swiss-based food giant is utilizing Blockchain in order to increase its shipment efficiency.

Tokenization — a new trend?

The tokenization of stocks has become one of the biggest trends in the cryptocurrency space. Recently, U.Today reported about a new Estonia-based exchange, DX.Exchange, which sells stocks in the form of Ethereum-based tokens. The exchange, which is powered by NASDAQ, is expected to bridge the two markets. Zilliqa has also launched a similar exchange that tokenizes the stocks of decacorns (companies whose value exceeds $10 bln).

With tech giants exploring (or even jumping feet front into) Blockchain and shares of major companies being actually sold on Blockchain, it is clear that the technology isn’t going anywhere. According to WEF projections, 10 percent of global GDP is expected to be stored on Blockchain.

Cover image via u.today
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Scalability on the Blockchain — Is There a Problem?


Scalability on the Blockchain — Is There a Problem?
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We can witness the golden era of Bitcoin only if scalability allows it. Just increasing block sizes or reducing mining time isn’t enough to fix the problems. 4 transactions per second — this is the average speed of the Bitcoin blockchain. By comparison, Visa provides about 1,700 (TPS). The difference is colossal! It’s clear that Bitcoin and other cryptocurrencies are not yet ready to compete with such indicators.

Problems of Bitcoin

The result of 4 completed TPS sounds disappointing, but why couldn’t Bitcoin’s blockchain work faster? Here are some clues:


  1. Limitations:

With each new transaction in the net increases the blockchain size.

  1. Data Size:

With a standard block hard-cap of 1MB in the Bitcoin blockchain, it’s hard to talk about effective scaling.

  1. Response Time:

On average, it takes 10 minutes to extract one block in the Bitcoin blockchain. Any online transactions must be validated. From here the queue that lasts for a considerable time.

  1. High Fees:

The validation process costs more because mining requires higher processing power.

What are the solutions?

Bitcoin’s blockchain has become something really huge. This is a system with a new level of security, economy and freedom of action. The community is trying to make blockchain ideal, but it’s not that simple. Each decision must be supported by the crypto community, and implementing changes will require even more time and effort. But now there are some solutions.

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Hard Fork

It is enough to imagine a complete change of the game’s rules to understand what a hard fork is. For example, you played football, but now you must play basketball. The ball is there, but the rules are radically different. So, a hard fork makes all members of the Bitcoin network download a completely new protocol. However, it has a history of transactions but not the connection with the old system.

Perhaps everyone has heard about one of the most successful hard fork at the moment — Bitcoin Cash. The altcoin lives and thrives, successfully breaking the block size mark of up to 32 MB.

time BCHUSD charts
Bitcoin Cash charts by TradingView

Soft fork

Segregated witness (SegWit) is an implemented protocol update that solves the issue of the Bitcoin’s blockchain transaction malleability and scalability. Every transaction consists of two part. The first one is Basic information. And the second part is Witness, it carries a special cryptographic code. This code is a confirmation of the virtual transaction in Bitcoin currency.

The essence of soft fork is to store the Witness signature in a sidechain. This move creates free space inside the block. At the same time, the block size increases without actually increasing. Let's look at the pros and cons of SegWit.

Pros:

  1. Increasing the Bitcoin’s block size allows containing signature data about other transactions in each of them.

  2. Optimizing the payment verification time will greatly enhance the transaction confirmation process.

  3. Soft fork reduction fees.

  4. SegWit eliminates the problem of Bitcoin’s transaction malleability.

  5. The bigger transaction amount in each block, the better miner's fee.

  6. The Bitcoin network is becoming less vulnerable to hackers thanks to a decrease in transaction volume.

Cons:

  1. During implementation, problems may arise in the operation of the system, since wallets must conduct it themselves.

  2. Radical actions can separate community.

  3. Miners will receive fewer fees.

  4. Resource consumption will grow with an increase in bandwidth and the number of transactions.

  5. No fee for miners for chain maintenance, unlike the main Bitcoin network.

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Lightning Network

The technical solution, known as Lightning Network, can be called the most successful of all that solving the current issue with scale. Deployed on top of Bitcoin, LN uses advanced smart contracts to achieve higher transaction bandwidth while maintaining the peer-to-peer nature of the Bitcoin protocol.

Lightning Network usage nowadays
Lightning Network charts by p2sh.info

The main idea of the service is to not record all transactions in the blockchain since it overloads it. If participants transfer funds to each other several times, it is not necessary to register each transfer. It will be enough just to open the payment channel and record the data on its opening in the blockchain. The channel will remain open until one of the participants decides to close it by adding the relevant data to the blockchain.

The advantages provided by Lightning Network:

  • Reducing the load on the Bitcoin blockchain.

  • Significant increase in transaction per second.

  • Reducing the verification queue.

  • Minimizing the miners' fees for servicing transactions.

Disadvantages of Lightning Network:

  • Although the Lightning Network is actively developing and implementing by more and more services, it is still in the experimental stage.

  • P2P nature of protocols allow making only online transactions, which means that the recipient and the sender must be in the network at the time of sending.

  • There are concerns about the security of the network because everything happens on top of Bitcoin, and therefore Lightning Network does not use the Bitcoin security model provided by miners.

  • The high probability of network centralization, the level of network control by one player has reached 64% of capacity, which is incredibly high.

In any case, LN is a real system, able to cope with the problem of Bitcoin blockchain scalability.

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Plasma

Plasma is similar to Lightning Network, except for Ethereum. This is a contact system built over the main blockchain. The root network contract handles only a few obligations from affiliated blockchains, which, as a rule, can handle a huge amount of computation. Obligations are periodically translated from child chains to the root. It can be said that the root blockchain plays the role of the supreme judge from whom the authority of the subordinate courts emanates.

But since the data is transmitted completely only to those who confirm a particular state, participants must independently monitor the chains of interest to punish fraudsters. In the event of an attack, participants will be able to quickly and easily make a mass exit from the child's blockchain to the root.

Blockchains can line up in a hierarchical tree structure. This allows you to balance the system, make the data as accessible and safe as possible, and reduce costs. Mining is performed with complete reliability only in the root blockchain, and the rest receive data authentication from it.

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Conclusion

The network of Bitcoin and other cryptocurrencies is growing rapidly. The larger the network, the sharper is the issue of scalability. We reviewed the popular methods of solving these problems. The community is trying to find appropriate solutions and new ideas.

One of the most successful and discussed solutions in the media is Lightning Network, the capacity of which exceeded 700 BTC, and the number of nodes is close to 6,500, but new heights obey the community. For example, the maximum block size in the Bitcoin SV network has already exceeded 128 MB and in 2019, it is planned to reach the size of 1GB. In parallel, the implementation of SegWit continues.

As for what will happen next, we'll see, but a final solution to the problem of Bitcoin scalability is not expected in the near future.

Cover image via 123rf.com
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