Blockchain technology is one of the latest technologies that will have a disruptive effect on the world as we know it. So far, many companies are trying to benefit from this technology in anyway they can. J.P Morgan has just given a prediction of three companies that will benefit from blockchain technology in the long run. Sterling Auty, the equity research analyst at J.P Morgan said:
“Investors should try to identify opportunities that will replace intermediaries and create trust where needed. They should look for companies that are in the best position to offer blockchain services.
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The most common application of blockchain is in cryptocurrencies. However, this isn’t the only application. So, an average investor may not know how to penetrate this industry apart from buying cryptocurrencies. This is why J.P Morgan made a prediction of three companies that will potentially benefit the most from blockchain technology. For starters, software companies will use blockchain in areas like artificial intelligence and machine learning.
However, not every software firm will create material incremental growth opportunities for investors. Sterling Auty continued:
“Blockchain as a service and middlemen displacement opportunities are the two key areas of focus. Look out for Ellie Mae, Akamai, and DocuSign. Akamai could use blockchain as a service. Instead of building from scratch, customers want to use vendors like Akamai that offer Blockchain related services. While there are many companies that are moving towards this direction, for example IBM, we believe Akamai already has a sizeable network giving it an advantage over others”.
Private Vs Public Blockchain
Sterling Auty from J.P Morgan is advocating for a private blockchain which is always closed, permissioned. She doesn’t advocate for public blockchains like Bitcoin which can be accessed by anyone. The distributed ledger of public blockchains can be seen by anyone on the network.
DocuSign, has already started offering clients the ability to connect its systems to a blockchain network. Sterling Auty referred to this company as an overweight in the industry that will leverage private and public blockchains. She continued:
“DocuSign intends to enable the whole contracting process in a digital manner. The platform may eventually switch from the centralized security model to a distributed model of blockchain technology”.
Auty also referred to real estate as the most obvious application of blockchain other than cryptocurrencies. She said that Ellie Mae, although an underweight, is going to benefit from the blockchain in this regard. In her words:
“Using the blockchain for loan management from the beginning of the process to the end will help create trust among all the parties involved. Smart contracts will help automate many of the typical tasks like inspection, employment verification, etc”.