These two companies are investing millions in the blockchain

Blockchain investors will not forget the year 2017. Cryptocurrencies saw their value explode, with an estimated valuation of $ 600 billion, an annual increase of more than 3,200%. The second quarter was particularly notable as the amount of ICOs for the first time exceeded venture capital funds.

Overall, Wall Street is divided on the issue of crypto-currencies and blockchain. Many companies are completely rejecting crypto-currencies, including JPMorgan CEO Jamie Dimon, who calls bitcoins investors "stupid" and does not include any digital currency as a transactional offer. Some invest instead in the underlying blockchain technology. Of these companies, Alphabet and Overstock.com are the two companies investing the most in the blockchain.

Alphabet has invested millions in the blockchain, but very little in the crypto-currencies
CB Insights notes that the companies have completed more than 140 equity investments in the blockchain since 2012 with a total investment of $ 1.2 billion. With the exception of the Japanese company SBI Holdings, CB Insights ranks Alphabet as the largest blockchain investor with six investments through its Google Ventures subsidiary.

Ripple, which is Alphabet's most notable blockchain investment, is using this technology to settle international banking transactions. Ripple says it can cut operating costs by a third and allow lenders to transfer money in seconds. However, since its main clients are banks, fiduciary currencies are used in transactions, relying on blockchain technology.

Other investments are similar to Ripple: Ledger X, the first regulated institutional trading platform, Veem, the online payment provider that uses blockchain to settle international transactions and Storj, a blockchain-based cloud service.

Overstock is a particular investor in the ecosystem
Apart from direct investment in crypto-currencies, the best way to invest in Bitcoin is Overstock. CEO Patrick Byrne is the strongest supporter of Bitcoin among the industry's top CEOs, noting that "Bitcoin is more powerful than physical money." In addition, the company was among the first retailers to accept Bitcoin in transactions.

Overstock uses its subsidiary Medici Ventures to invest in 12 different companies. The most recognized company in the Medici Ventures portfolio is the blockchain trading platform, tZERO. This month, Overstock went one step further by launching a $ 250M ICO for tZERO. Tokens would work as a preferred stock on the trading site.

Investments that are still anecdotal

It is a folly to invest in the above companies to take advantage of the craze of cryptocurrency. For Alphabet, 99% of its revenue comes from its Google unit, which is revenue from search and ads. The other 1%, what Google calls Other Bets, is home to many different companies besides Google Ventures. In addition, under the new leadership of Ruth Porat, the company has slashed spending in this segment to improve its results.

Even if Mr. Byrne wants to sell Overstock's retail business to become a true blockchain-based company, that has not happened and it will probably be difficult to get approval from a majority of shareholders who invest in an online retailer.

At the end of the day, if you have carefully weighed the risks of this new asset class and still want to invest in the blockchain, there are better ways to do that than to invest in these two companies.