“It’s nothing personal, it’s just business.”
We’ve all heard some variation of this infamous phrase at one stage or another. But it’s never really rung true. After all, what could be more personal than how we feed, clothe and shelter our families? Or how we choose to make our mark on the world?
The same is true of investing. An investment is not just a vehicle for making money, but also a decision the investor makes around which ventures they want to help succeed.
Around which matter most to them. It’s deeply personal, yet up until now, the practice of speculation has seemed almost entirely out of step with its effects.
In today’s world, that is simply unacceptable.
Investors have long been encouraged to look only at the bottom line. And to take a hands-off approach, investing in funds run by intermediaries who make all the decisions.
From what to invest in, which risks to take and why – the average retail investor has traditionally had very little input into how their funds are put to work.
Tried-and-tested investments that have been proven to generate a return for investors and to offer real value to businesses of all sizes.Equity investment is a prime example. Opportunities to buy shares are limited to public companies on the stock exchanges or crowdfunding platforms – investors are charged high fees and they aren’t able to invest in private businesses or businesses in other countries.
Not only can investors miss out on the best opportunities for returns, but since 99 per cent of businesses are private companies, they could also be unable to back the ventures they believe in.
And this can have real economic effects. If many choose not to invest at all due to the suboptimal options available this in turn limits the capital available upon which businesses, and economies, are built.
It’s time for that to change. The story of our century so far has been one of democratisation. Of new technologies putting power back in the hands of the people, from social media enabling people to make their voices heard to 3D printing democratising the means of production. Now we’re finally reaching a turning point where the investment world is ready to follow suit.
For the first time we’re able to imagine a system in which investors and businesses of any size can make deals that suit them, anywhere in the world.
In which they can get together directly, without the need for a middleman. In which the process is quick, easy and free. And ultimately, in which investors can put their money into any company that is helping to build the world they want to live in, public or otherwise.
And this doesn’t mean crowdfunding or peer-to-peer finance. It’s stocks and shares. Tried-and-tested investments that have been proven to generate a return for investors and to offer real value to businesses of all sizes.
Thanks to blockchain, this is all within reach. In fact, it’s already happening.
It’s now possible to build digital share certificates on the blockchain, connecting investors directly with business owners of any size, anywhere in the world, to buy and sell equities – all without the middle layers, administration and reconciliation steps required in today’s global equity market solutions.
And by holding all information on-chain, through a model of private and public data – a hybrid blockchain, transparent enough to ensure democracy and visibility and private enough to protect individuals and businesses – there is no need for regulatory approval.
This is the true democratisation of finance. It’s a buyer and seller meeting to agree terms that work for both parties, no matter where they are or how wealthy, and without requiring someone to take a cut brokering the deal.
And, ultimately, isn’t this what trade is supposed to be all about? After all, if you take a trip to your local market you won’t have to buy tomatoes through an intermediary. It’s a personal deal between you and the trader.
Because, no matter what they say, business is personal. Why should investment be any different?
Sascha Ragtschaa is chief executive and co-founder at Chainium
