Since the invention of blockchain technology a shift is taking place all over the world away from centralized business models towards decentralized business models. With a single point of control, centralized business models are inherently flawed: they are constantly at risk of being hacked or fall victim to security breaches and are subject to fraud being committed by bad actors who are able to gain control over the system. Blockchain technology however allows for decentralized business models to be created which are not controlled by a central authority and do not have any single point of failure. This paradigm shift in the way businesses are able to structure their business models going forward will drastically disrupt major industries as we know them today, such as the traditional banking system, and will be the catalyst for the emergence of new businesses that could not exist prior to the invention of this revolutionary new technology.
If you really think about it, peer producers have much more opportunity utilizing blockchain than they ever did before. Prior to the blockchain, peer producers were subject to bad behavior. Members who were incompetent, selfish, or acting as saboteurs could ruin a business because there was no economic incentive for good behavior. Now, blockchain technology enables peers to discourage bad behavior through economic rewards. Peer production communities now work based on “commons-based peer production,” which means goods and services are created outside of the private sector and are not owned by someone. To encourage good behavior, blockchain allows peers to share in the value they created by receiving a payment for their work and contributions. Think of Wikipedia, without the ill-advised members sabotaging the platform or defacing the page of an actor or political persona that they did not approve of. Blockchain makes it possible for peer producers to create new networked models of value creation.
Tracking of Intellectual Property
With blockchain technology ownership of intellectual property can easily be tracked in a way that is tamper proof.
Once a piece of intellectual property has been recorded on a decentralized blockchain by its creator, it would be impossible for anyone to transfer such piece of intellectual property without the approval its creator. In addition, once a transfer is recored on a decentralized blockchain, such transfer is irrevocable, meaning it is impossible for the transferor to transfer the same record twice (otherwise known as the 'doublespend' problem). As such, there will be only one irrefutable way for someone who claims to be the owner of a piece of intellectual property to prove the veracity of his/her claim by showing that he/she is able to access and transfer the relevant record in the blockchain ledger. If you are not able to access the relevant record in the decentralized blockchain ledger, this automatically means that you are unable to prove ownership of the intellectual property linked to such record.
Therefore, blockchain technology allows for all forms of intellectual property (such as art, music, and more) to be transferred between owners, without fear of fakes, fraud or losing track of ownership due to double-spend. Given that with blockchain technology it is easy to track ownership and the double-spend problem can be solved in a tamper proof way, such decentralized system is vastly superior to any centralized intellectual property database in existence today.
Block Chain Cooperatives
The trust that blockchain enables is also able to improve trust, which bolsters the development of cooperatives, or autonomous associations formed and participated in by those with common needs. Companies that typically used sharing economies prior were actually service aggregators, like Uber, Lyft, and Airbnb who all cracked the code for large-scale service aggregation. Utilizing blockchain, businesses can now collaborate to deliver a greater share of value to create a real opportunity for enhanced value creation.
The Metering Economy
The metering economy is another area where blockchain is enabling an influx of new business models. This is based on the principle of there being 80 million drills in the US, of which each is only used for an average of 13 minutes. Does everyone need a drill or would it be smarter to rent it? Well, prior to blockchain, the barrier to the sharing economy was too great. Now, however, with blockchain,, we can rent excess capacity for some of our commodities with no hassle. That is because blockchain enables a decentralized value transfer protocol that allows you to securely transact with strangers over the web. With blockchain, the platforms hold subsidiary rights to our assets, and allow users to decide the extent to which they will assign others rights of access. Wi-Fi hotspots, computer storage, and mobile minutes are all examples of things that could now be rented without so much as lifting a finger. Although relatively untapped, blockchain presents a big opportunity for new business model growth.
When enterprises open up products and technology infrastructure to individuals beyond their original consumers they can create platforms that create new value and business opportunities. An example of this is consumers who produce, also known as prosumers. Think of it as a car company that wants to track data on their vehicles after use to monetize, so they pay a small fee or percentage to the car owner for letting them activate tracking in the car. Blockchain now makes it simple for companies to create platforms and partner with consumers or other individuals to create more value and business opportunities.
Perhaps the most easily understood business model that has arose from blockchain is the fact that someone needs to make the blockchains. There are many benefits of blockchain, ranging from improved security, increased financial transparency, and open sourcing that would make everything from three-dimensional search abilities to an open food system.
Another way the blockchain is leading to a new influx of business models is by facilitating peer to peer collaboration between and within firms. It is now possible to have a fully distributed mechanism for any business segment, with social software becoming a virtual tool vital for every business. Not only will this lead to an enhanced security and privacy amongst businesses and employees, but it also can facilitate better information sharing in key metric areas.
By utilizing these seven emerging business models, small start-ups, large corporations, and businesses any size in between can take steps to implement blockchain and improve value creation. While boosting the bottom line, they can also create value for customers, societies, and shareholders.
If you are interested in finding out more about Bitcoin and blockchain technology, there are a number of excellent books on these topics. They will provide you with a valuable insight into the world of Bitcoin and its potential to disrupt the traditional financial markets.
If you're a fan of Bitcoin and want to help Bitcoin Gear in its quest to accelerate Bitcoin's mainstream adoption, then make sure to grab some Bitcoin gear and wear it proud!
Feel free to leave us a comment if you want us to discuss a certain topic about Bitcoin or blockchain technology or if you have a question. We will gladly share our knowledge with you.