ETF of the Week: Amplify Transformational Data Sharing ETF (BLOK)

ETF Trends CEO Tom Lydon discussed the Amplify Transformational Data Sharing ETF (BLOK) on this week’s “ETF of the Week” podcast with Chuck Jaffe on the MoneyLife Show.

The Amplify Transformational Data Sharing ETF is one of a handful of funds that invests in blockchain technology, the technology behind cryptocurrencies like Bitcoin.

Beyond the viability and long-term benefits of cryptocurrencies, transformational data sharing through innovative blockchain technology can also add value to an investment portfolio.

Focusing on blockchain, a decentralized database shared across all users that facilitates recording transactions and tracking assets across a business network, according to Amplify, blockchain is a peer-to-peer distributed ledger that facilitates recording transactions and tracking assets in a business network. Blockchain derives its name from how it stores transaction data – in blocks linked together to form a chain.

As the number of transactions grows, so does the blockchain. Blocks record and confirm the time and sequence of transactions, which are then logged into the blockchain within a discrete network governed by rules agreed on by the network participants. Although initially associated with digital commodities, it can track tangible, intangible, and digital assets and companies in all business sectors.

This foundational technology is expected to pave the way for significant disruptions across many industries.

Blockchain in the Economy

Worldwide spending on blockchain solutions in 2019 was $2.9 billion, with only 29% of companies in the consumer products & manufacturing industry currently using the technology. The global blockchain market size could grow from $3 billion in 2020 to $39.7 billion by 2025, a compound annual growth rate of 67.3%. This growth will be driven by three main sources, including venture funding, enterprise investment in blockchain technology, and the rise of blockchain solutions for the supply chain management. Additionally, the market will see greater geographic expansion into emerging markets and the potential growth of private blockchains.

Blockchain technology has a wide range of applications and growth opportunities. For example, applications that could benefit from the transparent distribution ledge include things like central bank digital currencies, digital identity, supply chain management, health care, life sciences, food safety, voting, charitable donations, and real estate, among others.

Blockchain technology could play a pivotal part in the shift toward a cashless society. The United States is woefully behind in contactless payments, with less than 0.25% of U.S. point-of-sale transactions conducted through a contactless payment method. In comparison, Visa calculated that 48% of its in-person transactions, excluding the U.S., are contactless, including more than 90% of transactions in Australia and more than 50% in the U.K. and Canada.

The blockchain distributed ledger technology can track assets and payments securely. This new need for fraud protection could accelerate as we witness the growth of more secure, peer-to-peer, contactless payment solutions that use authentication, monitoring, and data encryption.

Blockchain can be used in supply chain management. The Covid-19 global pandemic has revealed the weaknesses in the global supply chain, with a general lack of connectivity and data exchange built into our global supply chains. The World Economic Forum warned that future resiliency would depend on building transparent, interoperable, and connective networks. In response to these challenges, the World Economic Forum co-developed the Redesigning Trust: Blockchain Deployment Toolkit with a supply chain focus.

Potential blockchain applications in the healthcare industry include medical supply chains, testing, contact tracing, and medical research. Blockchain is being leveraged to connect buyers with non-traditional suppliers producing masks and other PPE needed to combat COVID-19. Due to the inherent transparency of the technology, hospitals could guarantee that all patients’ health records were ‘tamper-proof’ while still ensuring the data’s privacy. A series of ongoing efforts across universities, medical academia, the private sector, and even private citizens are harnessing distributed systems in the fight against COVID-19.

Listen to the full podcast episode on the BLOK:

For more podcast episodes featuring Tom Lydon, visit our podcasts category.