Business Opportunities in Blockchain




 
It has become impossible to escape the word blockchain. From an obscure term that cropped up occasionally when people talked about Bitcoin a few years ago, the buzz around blockchain has grown tremendously, so much so that it may soon overshadow Bitcoin itself.

Blockchain is the underlying, fundamental technology behind the first decentralised and digital cryptocurrency — Bitcoin. However, its applicability extends far beyond such “simple” applications.

The best way to understand a blockchain is to consider it as a distributed database. Imagine a spreadsheet that is duplicated thousands of times across various different computers. This entire system is configured in such a way that this spreadsheet is updated continually, so that everyone sees the same copy at any point in time. The most important thing to note is that there is no central entity that is holding the “true copy” of the spreadsheet. Everyone has their own copy and is continually reconciling it with each other.

Blockchain technology allows entities to perform transactions with each other without relying on a central trusted third party to ensure compliance. Blockchain also ensures the transparency and integrity of the data being stored in those transactions. Due to these properties, blockchain, as a technology, has progressed far beyond financial transactions and is being used in smart (self-executing) contracts, smart property, Internet of Things, supply chain management, healthcare, ownership and royalty distribution, and decentralised autonomous organisations. Bitcoin was envisaged as a “permissionless blockchain”, wherein any node could join at any time. Further development in this field has led to “permissioned blockchains”, where only an authorised set of entities can be part of the blockchain.

What many people are recognising is that this fundamental technology has the power to disrupt multiple industries. Everywhere we look in the world around us, there has always been a “central” agency who we “have to” trust in order to facilitate a transaction between two parties. These central agencies could be banks, certifying agencies, stock exchanges, or even units of the government itself. When we apply the concept of blockchain to the services these entities provide, it leads to a fundamental disruption, or a re-think of whether we need those entities altogether.
 

 
While blockchain technology itself is tremendously powerful, we need to have a framework to evaluate whether it is applicable to a certain problem or industry. The framework below has been adapted from a structured methodology provided by Karl Wüst and Arthur Gervais in their article “Do You Need a Blockchain? ”. Note that the word “transaction” is used in a broad sense in the framework and can represent any interaction.



 


 

IndustryWhat they are doingCompany
BankingBanking services (payments, loans, investment solutions)Bankera, Cashaa, Aurora, Moeda
LendingDecentralized lending platform including identity attestation, risk assessment and credit scoringBloom, WeTrust, Celsius, Ripio, ETHLend, Salt
Funds & InvestmentsGlobal online investment and digital asset management platform, crowd-sourced and AI based hedge funds, wealth managementBlockchain Capital, Iconomi, BnkToTheFuture.com, Polychain Capital, Numerai, SwissBorg
TradingDecentralized exchange for crypto and fiat currencies, data feed platformLykke, Everex, Populous, CoinDash, trade.io, Santiment
AccountingDecentralized accounting, audit and real-time reporting ecosystem for enterpriseHive, Paypie, Libra, Auditchain
InsuranceCrowd-sourced insurance pools, peer to peer solutions connecting insurers, reinsurers and brokersChain That, iXledger, AI Gang
Supply chain / LogisticsTamper-proof and transparent data-sharing, reducing intermediariesOrigin Trail, ShipChain, CargoX, Modum, Sweetbridge, Ambrosus, vechain
HealthcareDecentralized healthcare information system, store, manage & exchange health data, verify origin of productsHelix3, MediBloc, Ambrosus, ScriptDrop, HealthWizz, Proof Work, DentaCoin
MusicTransparent and decentralised database of rights and rights owners, automating royalty payments, platform for project funding, and peer-to-peer distributionMycelia, UjoMusic, Singular DTV, Viberate, OPUS
Government / CorporationsDecentralized communities, court systems, open and transparent decision-making, accommodating diversity and disagreements, legal contracts, secure and dispute proof electronic vote-counting systemsDecred, Aragon, Colony, Agrello, Kleros, COALA IP, Horizon State, BackFeed, Mattereum, FollowMyVote
Raising fundsAn initial coin offering (ICO) is similar to an initial public offering (IPO). In an ICO, a company sells "tokens" to investors in exchange for fiat currency or cryptocurrencies. These tokens become functional units of currency when the ICO's funding goal is met and the project launches. ICOs enable startups to avoid costs of regulatory compliance and intermediaries, such as venture capitalists, bank and stock exchanges. However, risks for investors increase.Upcoming ICOs: ICO Alert, ICO Bench, Token Market


 

About the author:
This article has been written by Siddhant Bhansali, 
alumnus from PGP Co '07, Moderator of the Alumni Startup and Entrepreneurs Special Interest Group(SIG) & Chief Technical Officer, Bharat Connect. The SIG is planning an event at Equinox 2018 related to 'Business Opportunities in Blockchain' please reach the moderators at startupsigmods@isb.edu if you wish to collaborate.