Blockchain Reinventing Business Models

By CIOReview | Monday, June 11, 2018
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Since its inception, blockchain technology has been evolving and is quickly expanding beyond bitcoin today. While many proponents of bitcoin cryptocurrency see the blockchain as a befitting competition for existing payment methods, the underlying technology is rapidly becoming a harbinger of newer things.

According to various reports, bitcoin companies collectively received about a billion dollars in funding. However, Ethereum—a blockchain protocol that allows complex financial transactions to be arbitrarily encoded by anyone and executed in a provably accurate manner by a distributed network--has seen very minimal amounts of VC investments.

 Nevertheless, organizations today are focusing on alternate routes for funding their projects. They are utilizing their blockchain-based tokens to raise money for their networks, sidestepping the traditional, exclusive world of VC altogether. Using this new model, entrepreneurs create blockchain-based tokens that represent ownership in the network they are building and also act as fuel for their network. This sort of replaces ownership through shares with blockchain-based tokens.

As the blockchain space expands, proportionate returns will go to holders of the actual tokens, not traditional venture investors who bet on shares of a company.