Codebase could have found the project that solves blockchain technology’s biggest problem.
With the total value of cryptocurrencies having recently pushed past the $2 trillion mark, it’s obvious the digital coin market is on a big run right now.
And sure, if you’re lucky enough to catch one on the lesser-known ‘alt-coins’ on the rise, it can be rewarding.
But it can be risky too. And for many investors, the unregulated nature of investing in cryptocurrencies themselves doesn’t sit well.
But what a lot of people don’t realize is this…
The real long-term investment value doesn’t actually lie in the virtual coins themselves.
As you may already know, though cryptos are exciting right now, it is the decentralized blockchain technology behind cryptocurrencies that is likely to have the biggest influence over the long term.
And it’s the companies investing in this blockchain technology that will likely be the real boon for smart investors looking to expand their portfolio.
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It’s one of the reasons why Vancouver-based tech investment firm Codebase Ventures (CSE:CODE | OTC:BKLLF | FSE:C5B). has acquired a 30% stake in a blockchain system called Arcology (with the option to increase to a 51% stake in the future).
You see, given the growing interest in blockchain technology from global businesses, major institutions and general investors, the pressures on existing blockchain systems, such as Ethereum, is growing too.
Indeed, though Ethereum might currently be the clear market leader when it comes to blockchain systems, it is obvious that the demands on its technology are growing.
Problem is, Ethereum is struggling to keep up.
Don’t be mistaken, Ethereum may still remain the market leader for a long time to come. However, the fact it’s already having capacity issues and finding it difficult to process transactions fast enough means it will necessarily have to make space for more players.
Indeed, more blockchain systems will be required as more and more companies and industries move from centralized systems to the decentralized mode of operation (more on this shortly).
It’s not so much a problem for blockchain technology, but rather a huge opportunity for those companies who are able to master and manage more efficient blockchain systems.
This is why Codebase’s stake in Arcology is so smart.
And why the company could soon see its share price soar.
You see, Arcology has not just figured out how to perform the blockchain functions that Ethereum cannot…
It’s already got the tech locked and loaded.
Arcology has effectively been operating in ‘stealth mode’ for a number of years to develop its own blockchain system (that can be seamlessly run alongside Ethereum’s) and it is now ready to surface.
How Arcology provides a solution to blockchain’s limitations
It’s easy to get lost really quickly when it comes to blockchain…
So, it’s best to keep things as simple as possible.
Indeed, in case you’re still trying to get your head around the tech like most investors, the easiest way to think about a blockchain system is to imagine a simple record of transactions.
For example, imagine a list of all the transactions you make at the supermarket—you buy bread, vegetables, meat, toiletries. Every purchase represents a single transaction.
This list of transactions is usually kept in one centralized place—the supermarket’s computer system. Problem is, anyone could technically access and change that system very easily.
But blockchain technology works differently.
Imagine instead, everyone in the supermarket is given a copy of the list—it’s decentralized—so that everyone has a record of those transactions.
With this decentralized list, it would be impossible to change the details of one of those transactions without everyone agreeing to change their record too.
On a very basic level, that’s how blockchain technology works.
It acts as a list—or record—of transactions that is decentralized and is therefore harder to compromise because it’s not under the control of any one person – it’s a “trustless” environment.
As well as being more secure, decentralized systems are also much more efficient than centralized ones, and are also more traceable and completely transparent.
No wonder the technology is frequently described as a key driver of “the fourth industrial revolution.”
Problem is, when you apply this approach to banking, say, or some other industry where there are thousands of transactions happening every second, the blockchain system can soon become overloaded.
In short, that’s what’s happening with Ethereum.
Currently, the original Ethereum system can only process approximately 20 transactions per second, but something like Visa can handle tens of thousands of transactions per second.
This is an obstacle blockchain technology must overcome before it truly goes mainstream and is adopted into industries like banking, health, and retail.
The good news is that it’s a problem Arcology may have already resolved.
Without getting too entangled in the ground-breaking technology (which is being developed by Laurent Zhang, the computer scientist who founded Arcology), the number of transactions Arcology’s AI and machine learning-driven blockchain system can handle is much greater than its peers thanks to something called cluster-computing.
You see, Zhang has figured out how to connect computers to share the workload of the Arcology blockchain system, while still ensuring the transactions remain decentralized.
Add more computers, create more capacity.
As a result, it can currently handle over 30,000 transactions per second—way more than Ethereum can – with limitless potential for scalability.
In short, this allows it to accommodate all the applications and businesses with requirements simply too demanding for Ethereum – it opens up the full potential of blockchain.
Not only that, but because it can process so many transactions, it can afford to charge users a much lower price per transaction.
But what’s also really smart about Arcology’s blockchain system is that users can move applications seamlessly from Ethereum to Arcology.
This is a big deal.
Think of it like moving things from Apple to Android and vice versa.
It would usually be difficult. Companies may choose to only make a program for one or the other or – if they had the funds at their disposal – spend lots money adapting it for both.
Arcology offers developers a way to build for both systems, and – in the process – it offers a much cheaper way to access a greater and much faster blockchain.
Bottom line is, this seamless integration means Arcology doesn’t need to ‘take over’ from Ethereum.
Instead, it can enjoy a nice chunk of its huge market share while also opening the door to blockchain for entirely new industries and applications.
Now is the time for Codebase and Arcology to come out of ‘stealth mode’
As we mentioned before, since blockchain and cryptocurrencies had their first ‘false start’ back in 2017, both Codebase and Arcology have effectively been operating in ‘stealth mode’.
Codebase was early to the industry, identifying the potential of cryptos and the blockchain technology behind them on the ground floor.
But after seeing so many companies get burned—or burn out completely—throughout the market’s first boom and boost, the pair have been quietly working on the fundamentals, rather than the fancy marketing.
By acquiring such a significant interest in Arcology—not to mention its acquisitions in other areas of blockchain technology such as bit mining and non-fungible tokens—Codebase has shown that its time under-the-radar has been spent well.
But now, with cryptocurrencies booming and demand increasing for blockchain technology, it’s clear that this is the time for Codebase and Arcology to step up to the plate.
In fact, news recently broke that Arcology has been able to optimize one of the most popular games currently hosted on the Ethereum blockchain and increase its transactions per second speed up to 40,000.
Remember, Ethereum can generally only deal with around 20 transactions per second.
Indeed, with all the necessary funding in place to power Arcology on through its next stages of going live, it looks like Codebase has chosen just the right moment to unleash its latest venture.
A traditional way to take advantage of modern technology
Without doubt, the work Arcology is doing to anticipate the increasing demand for blockchain systems is exciting…
And given testing has already evidenced Arcology’s capabilities on the speed, scale and stability front, it seems it is only a matter of time before the system starts attracting developers who will want to build specifically for it.
Indeed, the company is now preparing for a full-scale Testnet that will allow developers to play around with its capabilities ahead of full-scale roll-out later in the year.
Frankly, many would argue that the work Laurent Zhang is doing with Arcology represents one of the most exciting developments in blockchain technology.
However, the opportunity isn’t one a retail investor would normally be able to access.
But, thanks to Codebase’s key stake in the start-up, smart investors have the opportunity to get in on the action before things really take off.
Make no mistake, blockchain technology is only going to attract more and more investment in the future, and it will come from bigger and bigger players…
But right now, thanks to the strategic work Codebase is doing in the space, you can beat the rush.
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