Blockchain hedging

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Hedge fund investment is a complex business industry. It is one portion of the investment strategy for high net worth individuals or groups wanting to pool a collection of multi-risk level investments into one "hedge" which in theory has all the advantages of a low risk investments such as real estate with the high opportunity of returns tied usually to internet stocks - for example. Still, this is all managed by people and people make mistakes. Moreover, as an investor you never know what you are investing in. In other words, the hedge fund ledger is closed and you never have access to it.

Blockchain hedging means that investment contracts are based on a public ledger and the financial obligations of the hedge fund company with you are publicly available on the internet so you see where your money went to and where you made your money in however small the return was.

Therefore, with additional transparency you get to choose a hedge fund manager that invests on the kinds of business endeavours that suit your personal preferences and because this happens you have more control over the outcome of your investments.

Another important innovation that is possible because of the blockchain in this space is automation. With the additional security features, automation takes center stage in approving loans and investments, individual applications are more readily accepted and risk profiles are managed via software. Being unalterable, a blockchain based public ledger becomes the digital version of writing the transaction in stone. Being unalterable, every transaction is digitally notarized with a secure unique code that is virtually impossible to be hacked or broken.

There are a few companies that are starting to venture in this space especially in peer-to-peer loans. Banks kinds these to be high risk and companies are avoiding it by spreading it by investing small amounts in many individual loans. It is quite a clever strategy that is working well.

Hedge fund ICO

Investors are now able to get returns at the protocol level with an ICO - an Initial Coin Offer. It is one of the most efficient fundraising instruments in existence in the world and in order to get the benefits of it, it is better to understand a bit of its context, its risks and how to mitigate them.

The risks involved are usually because investors do not have enough information in order to make a sound investment and often place their bets with multiple systems in the hopes that one of them will pan out.

A hedge fund based way to invest in blockchain assets maybe a more secure alternative as it is by definition a way to make a well-weighed decision since these hedge funds will purchase tokens in multiple systems and manage them for a fee which pay for the expert advice they are getting in order to make decisions on your behalf.

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