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It’s very common for people to feel intimidated by new technology. Blockchain technology gets thrown around quite a bit, and stories of companies investing a lot of money in them pique interest.
Yida Gao and his Shima Capital team have been doing their part in explaining Blockchain technologies to every potential investor. This information has persuaded people to put up large sums of money to help fund startups.
Before jumping in, it’s always essential to know how everything works. The guide below provides a little more information on blockchain technologies and their potential to be revolutionary.
What is Blockchain Technology?
Blockchain technology can be summed up as a decentralized and distributed ledger that will keep a record of ownership for any digital asset. If data stays stored in the Blockchain, it can’t be modified. Blockchain technology is a disruptor when looking at payment options, cybersecurity, healthcare, and more.
With digital assets, distribution occurs. That means copies or transfers can’t be done unless the original owner provides permission. Since they are decentralized, this also offers real-time accessibility, plenty of transparency, and a certain level of governance.
Any changes become fully documented. Blockchain ledgers are available to the public and have shown that they can be used for any type of business.
Why is Blockchain Technology Becoming More and More Important?
The first thing that grabs the attention of those in technology is that Blockchain cuts down on security risks. It’s an issue that is becoming tougher and tougher to deal with traditionally. Trying to get rid of fraud and make transparency openly available just makes sense for a lot of people.
Most know about Blockchain technology because of its connection to cryptocurrency and NFTs. When that’s the case, it works as a management solution for many different types of industries out there. Blockchain technology works in food, healthcare, gaming, and more.
Explaining How the Blockchain Works
The best way to understand how a standard Blockchain works is to know the three essential concepts of Blockchain technology; Blocks, miners, and nodes all play a pivotal role in how everything operates.
Each chain has countless blocks and three elements. There is full of data in all block, the nonce that serves as a whole number when you create a block. A hash is the number permanently attached to the nonce. The hashes have zeros in front of them.
Miners are the ones creating new blocks for the chain. This isn’t an easy task, especially with large chains. Being financially motivated is what keeps mining going in blockchain technology.
There is specific software to find a nonce and a good hash. There are certain numeric bits in nonce, and a hash. That means there can be possible nonce-hash combinations around 4 billion to find the proper one. If you can able to find the golden one then you can able to add it the chain.
When you mine a block successfully, changes have to be accepted on the network. The reason why miners do this is that they want to be rewarded financially.
A node is a critical component of this network. They determine whether a block of transactions is legitimate, if its transaction history is holding up, and more.
Why are Venture Capitalists Investing in Blockchain Technologies?
Even with a thorough explanation, it’s easy to see why Blockchain technologies are confusing to anyone who does not know much about it. Why are venture capitalists flocking to Blockchain technologies then if this is the case? What a lot of them see is an opportunity to grow in a field that is still so young.
Blockchain technologies have long been recognized as the future, with so much opportunity. This draws a fair share of scams, just like any industry, but there’s a lot of innovation that could take things to the next level.
Venture capitalists are looking for those opportunities that can generate a lot of money for investors willing to take chances.
One of the challenges Shima Capital and other venture capitalist firms have found is that it’s difficult to get money coming in until there is proof of return.
Savvy investors are always looking for new opportunities, even if it’s something that’s not in their typical line of expertise. Yida Gao has a lot of first-time investors in Blockchain technologies with his firm.
Why Shima Capital Focuses Only on Early-Stage Investment Opportunities
Yida Gao made a conscious decision early in planning out Shima Capital that he wanted to focus on early-stage investment opportunities with his venture capital firm. This is to have the highest impact on the success rate of an idea by doing more than just providing money.
Investing is usually linked with money, but Shima Capital does not. They want to help by providing resources and advice on how to grow. Everyone is learning on the fly and getting a little bit of help.
When Shima Capital puts money into a business, they understandably have a lot invested in seeing it through. It would not be competent to withhold any valuable resources that could help out.
Shima Capital feels very optimistic about the future of Blockchain technology. It’s only in the beginning stages, as there’s still quite a bit of innovation coming down the line. With the right decision-makers in place, Shima Capital believes it can make investors fully believe in the future after seeing some of the returns.