Blockchain business models are changing our future! The blockchain is not rocket science, but clean code and state-of-the-art technology. Above all, it offers companies great added value and so more and more blockchain business models are developing.
Blockchain business models in the future
By 2025, the successful implementation of digitization strategies and the implementation of blockchain business models could achieve an increase of 1.25 trillion euros in industrial gross value added . There are currently 7 application classes for blockchain business models and five types of business models in the literature. We want to briefly introduce these:
- Cloud-based use of blockchains by infrastructure providers such as BigChainDB
- Platforms such as the IMB engagement at Hyperledger, on which developers can implement their own blockchain applications and where governance and consensus procedures exist as a plug-in solution.
- Providers for applications that each support a specific application in the company.
- Service providers create customized blockchain business models that can then be implemented in companies based on the available infrastructures.
- Providers of so-called complementary services such as training courses, trainings, further education and qualifications for blockchain developers .
Blockchain – the five main strengths
Above all, these five strengths that blockchain business models can rely on:
- Immutability of transactions: Processes in which there are no changes to the transactions retrospectively and for the implementation of which it is necessary to comply exactly with the general conditions.
- Transmission of values: Processes in which original documents as well as certificates of origin and confirmations of ownership are transmitted or transferred. This is where crypto assets come into play as values in the DeFi sector. Share transfers can be transferred quickly, securely and, above all, transparently.
- Protection of rights: Processes in which the rights such as copyright or patent law as well as other property rights or licenses are transported or transferred. Depending on the individual case, smart contracts can be considered a legally binding contract, but their content must comply with the applicable law. In particular, the copyright regulations for software and database law are predestined for blockchain technology. And if the blockchain is used properly, the processes or the result of the transfer of rights even correspond to the BGB.
- Integrity of data and processes: processes that aim to logically merge data and functions into a business process. Blockchain technology enables business process-oriented application integration, such as for hierarchizing processes and analyzing business logic. Big data is also the basis for the ability to collect and analyze large amounts of data.
- Intermediaries: Processes that do not require a trustworthy middleman, or processes in which this should be avoided, are also suitable for blockchain technology. Companies can optimize processes in which they rely on an intermediary whose costs are to be reduced or the tasks of the intermediary are taken over by blockchain technology. Political reasons could also be a reason, for example, when switching from a centrally controlled entity to decentralized litigation.
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Still in the "early phase of technology"
The implementation of blockchain business models affects not only monetary benefits, but also process optimization and the quantification of trust. Companies need different quantitative processes and have to consider technological, but also social, economic, legal and regulatory aspects. Many developments can currently only speak of an “early phase of technology”, even though the range of business models is wide.
Experts assume that the market dynamics around blockchain technology will increase. There are many mainstream organizations on the market, but only a few of them offer a complete solution for blockchain business models. However, this spread is expected to increase significantly by 2025 and the leading providers of the new technology are already recognizable at the beginning of the 2020s, according to experts and futurologists. These blockchain experts include the U.S. company Gartner, a leading research and consulting firm that was founded in the United States in 1979.
Blockchain business models 2030 everywhere
David Furlonger, Garnter's Digital Business Leader, is responsible for conducting research and helping companies better understand the long-term business and technological impact of blockchain technology. Together with a co-author, he has published a book that describes the four phases of blockchain technology. " The Real Business of Blockchain: How Leaders Can Create Value in a New Digital Age " deals with the so-called blockchain spectrum. It shows how the blockchain could develop from today to 2030.
The blockchain spectrum sees five fundamental aspects in blockchain technology:
- Network (distribution)
The 4 phases of future development according to David Furlonger are:
1st phase – Blockchain activation phase
Blockchain-based solutions are created and form the basis for the further development of blockchain business models. These primarily concern the operational efficiency of distributed data management systems. Of the five elements in the blockchain spectrum, only the points of immutability and distribution are used.
2nd phase – Blockchain inspiration phase
The solutions developed here lack tokenization and decentralization. They often relate to the efficiency or optimization of existing processes. Their scope is usually limited and is based on the maintenance of established processes and architectures, such as the implementation of databases for the optimization of value chains. However, these solutions cannot manage digital or non-digital assets and are only designed to enable decentralized operation and to define specific governance guidelines.
3rd phase – Blockchain complementation phase
Furlonger sees complete solutions for blockchain business models available at the earliest from 2023. In his opinion, these then use all five essential features of blockchain technology and offer completely new business models. Among other things, dynamic intelligent contracts are used that handle tokenization and decentralized operational structures. The use of blockchain-enabled tokens allows the use of previously unknown or impossible value exchange systems down to the so-called micro level. The focus is on the individual as an actor within a network. In this context, these are not just individuals, but also companies that directly participate in the digital network.
4th phase – Blockchain optimization phase
From 2025, Furlonger continues, so-called complementary blockchain technologies such as the Internet of Things IoT, artificial intelligence AI and the decentralized self-confident identity SSI will grow together. Complementary here stands for opposing but complementary areas of application of blockchain technology. In this phase, the number of microtransactions increases, for example on the IOTA tangle. Autonomous systems are becoming increasingly important for new business models and can interact commercially and independently of a human being. In the Internet of Things that is enriched with AI, autonomous intelligent contracts can independently manage assets and commercial values.
Blockchain business models for the DeFi sector
Furlonger sees great potential for the creation of new business opportunities in the context of blockchain business models in the four elementary phases of the blockchain spectrum. The decisions companies make today regarding blockchain technology will have a significant impact on their future competitiveness. Since 2012, it is primarily the financial service providers who have either already used the blockchain as part of DeFi or at least initiated pilot projects.
David Furlonger criticizes in this industry that only three of the five essential characteristics of blockchain technology are used with distribution, encryption and immutability. Up to now, as a value exchange system, innovations have mainly focused on optimizing existing processes instead of devoting themselves to the real decentralized solution of tokenization.
Smart contracts only use two of the five elements, tokenization and decentralization. Here too, there has been a lack of inspiring solutions for real-world blockchain business models. Only after 2025, the expert continues, will the Internet of Things, AI and the decentralized self-confident identity solutions SSI grow together.
SSI required for onboarding processes
Self-sovereign identity means that a user has sole rights to his digital proof of identity and can share it. But also that he always decides who gets what information and how he has to deal with it regarding storage. He can also prevent access to this data at any time. VIDchain already offers a decentralized SSI service based on blockchain technology.
The onboarding processes of customers, such as the Know-Your-Customer questions and the requirements of the AML Anti-Money Laundering Act, currently have the greatest potential for blockchain business models. An open ecosystem of decentralized identities that is accessible to everyone enables companies to improve their processes and reduce the costs of identity verification. Purchasing processes in the context of e-commerce become more secure and processes for the DeFi sector receive full legal security through SSI technology.
Blockchain business models for many industries
Secure digital business models are also needed in logistics and production. But generally speaking, blockchain technology enables new forms of cooperation. Decentralized autonomous organizations DAO are created and can make decisions independently based on an algorithm. Blockchain-based, autonomous and decentrally structured organizational units are deemed to be DAOs.
Starting from the financial industry, further digital business models have developed, even though Gartner analysts used the word "disillusionment" in 2018 when surveying companies and their thoughts on blockchain technology. The market experts at Bitkom Research also concluded that only 6% of German companies are already using the technology or are at least planning to do so.
Blockchain technology can help, for example, to ensure that products are manufactured in an environmentally friendly and socially compatible manner and that the traceability of raw materials is seamless. Monitoring the cold chains as well as the processes in the transport and logistics area can also gain significant added value through the use of blockchain business models.
Blockchain-based digital value transfer
But while these industries are still struggling with innovative technology and there are no outstanding blockchain business models, the decentralized financial world is making great strides ahead. The secure, transparent and decentralized transfer of values and rights play a central role in this.
Brickblock combines its passion for real estate and distributed ledger technology. On the company's own blockchain brick block chain, it offers “securitized”, ie encrypted, property and its forgery-proof mapping. Ownership can also be offered speculatively via smart contracts and consequently benefits from price changes with a corresponding dividend payment.
Only at the end of October 2019 did BaFin give permission for a public STO from Brickblock, in which small investors can participate in the crypto start-up. With its blockchain business model, Brickblock grants small and medium-sized companies legitimate access to the capital market. The two founders behind Brickblock are Martin Mische, his founder of Bitwala and Jakob Drzazga, also experienced crypto investors and experts in real estate investment trusts.
How does crypto invest on brickblock work?
- Put on the Ethereum Wallet
- Acquire ether
- Metamask Browser Extension – access to brickblock networks
- Examination of suitable tokenized assets
- "Invest Now" button
- Verification of the token sum
- Complete the digital shareholder process
- Smart contracts automatically process dividend payments
The global investment 24/7 regardless of the opening times of international marketplaces and the lower fees are strong arguments for the start-up. But also that no minimal investment is required and the faster and more efficient processing of crypto asset transactions is convincing.
Hyperledger – a blockchain business model
A blockchain is a large, distributed database and that makes it suitable for many business models. However, the technology with the disruptive character requires a database environment with high performance. However, installing your own blockchain framework is only lucrative for larger companies.
Small and medium-sized companies can use the Blockchain-as-a-Service, which does not go beyond the entire IT budget. So far, Ethereum has shown itself to be a practical framework for blockchain business models in many areas.
Together with the Hyperledger project, some promising approaches for holistic projects have already emerged. A blockchain business model such as Hyperledger Iroha for blockchain beginners can strengthen a company's competitiveness, open up new customer groups and new business models emerge.