Technology

3 Things Entrepreneurs need to know about Blockchain Technology

When the internet was new, we saw a paradigm shift and entrepreneurs who were ready to make the switch at that time got benefited a lot, but there were certainly a less number of people who trusted that things could be bought over the internet, they just saw it as a fancy way of communicating with others. Just like that Entrepreneurs are divided into 2 parts – one believing and trusting the technology that enables a secure trustless network and the one considering it as a fad. Similarly, in the current scenario, there are fewer non-believers of enterprise blockchain technology as of now. Blockchain had its criticism era for no reason from 2012 to 2016. Entrepreneur considers blockchain to be disruptive as a piece of technology with certain rules which makes it more secure.

Entrepreneurs need to understand that blockchain is not just about cryptocurrency, it’s offerings are much more than that. Although, undoubtedly Blockchain’s gift “cryptocurrency” to the world is valuable but there are domains and use cases where Blockchain is and could be far more disruptive than ever. Cryptkitties a game on blockchain is getting bigger and bigger, Augur.io an online betting platform, dock.io a decentralised LinkedIn are some of the examples that have leveraged the power of blockchain and set examples for blockchain to work in other domains.

As the blockchain industry is young, it would be difficult to find all the resources at one place, but the blockchain community of almost every company is helpful and will support the developer. To distinguish between a good and a bad team for an entrepreneur to solve a problem using blockchain is key.

And here are 3 things Entrepreneurs need to know about blockchain:

1. Fundraising on blockchain

Blockchain provides a new mechanism of raising funds to the entrepreneurs by ICO( Initial coin offerings) funding. The most important problem after building a company or for building a company in the first place is to have finances. Money is required at the initial stage for formation of firm. After that, for product development and for research purposes blockchain can be used for fundraising on the basis of Proof of Concept(PoC). The friction increases when an entrepreneur belongs to a rural area or an area where he cannot find investors for his domain. Entrepreneurs from an area with less economic development can raise fund through this mechanism. This method tries to lure investors on the basis of the product and the entrepreneurs with fewer connections in the industry can also raise funds in the same manner and this will enable to not miss out on any opportunity only on the basis of lack of connections or being newer to the industry.

A solid product or a service or a revenue-generating mechanism should be there in the company offerings for the market which can back the cryptocurrency which will be raised by means of ICO. Once an entrepreneur has a product there needs to be a proper documentation (Whitepaper) which explains the company offerings and its motives clearly. This will help persuade investors for funding the company. An influential board of advisors can help up more, as their influence on the industry can increase the reach of your ICO and could help you raise more. The release of a technical paper (Yellowpaper) can be helpful to get attention from the tech community. For example, Verasity.io published a White Paper and Yellow Paper to raise funds and reached its soft cap and the private sale has been extended to raise more. EOS form Block.one raised a record $4 Billion in ICO in a year which is remarkable. There are several companies that raise in millions and some in half a million according to their requirements. It’s an efficient way to raise funds by raising money through other crowdfunding sites doesn’t provide you with enough security for your donations or funds. The code that will run an ICO will be open sourced and can be viewed be anyone which involves in trust management with potential investors.

2. Seamless infrastructure

Most of the industries and services take the side of third parties which make their whole system vulnerable to attacks. Healthcare, Education, Insurance, etc. Industries reliance on intermediary service providers makes their offerings restricted in order to protect data. The concept of trusting another institution which verifies or hold the data or information for security purposes based on certain criteria like reputation, market capital, etc. can lead to a system disaster if one of them bears a malice within the system. These companies manipulate the markets by bringing variance into their pricing schemes. This manipulation can lead to a never-ending exploitation of the markets resulting in a discouragement of enterprise building for the new age of entrepreneurs. This can be avoided totally by using the second generation of blockchain that was led by Ethereum.

The only major difference between Ethereum and Bitcoin was that Ethereum provides a new programming language for developers that gave them the freedom to build apps and services on top of the Ethereum stack by writing Smart Contracts using languages such as Solidity and Serpent. Bitcoin also had scripting facilities but it had some restrictions which led to the spaghetti code(unstructured coding practice). Several developers, entrepreneurs and startups are making the most out of it, by using different blockchains that provide similar kind of facilities which enables to use the existing stack to develop apps and services on it, instead of building an entire separate blockchain for a simple use. This makes the offerings of the companies cost effective and there is no need for reliance on third parties for proper functioning. The blockchain network helps in all these processes and let’s run the system seamlessly.

3.  Decentralization

Blockchain provides with a power to disrupt every industry with its power to integrate decentralization in the system itself. It enables a real-time democratized infrastructure where the power lies within the community and is not concentrated with a single entity. All the monetary transactions can be verified over the network and there is no need to give the power of verification of funds to a single trusted entity like banks or other financial institutions. EOS, Zcash, Neo blockchain etc. Are being used to create community-driven solutions for the society. This decentralized infrastructure can help increase transparency and increase the operational speed due to the non-existence of intermediary institutions. Blockchains have been at the implementation stage in voting, land records directory and issuing birth certificates in India as of now.

At the end…!

Blockchain is an important concept and a mechanism that is driving the world towards itself by gaining an enormous amount of attention due to the opportunities it will provide. At the same time, one needs to be aware of what it is and understand these 3 things about blockchain in detail to run a successful business in it.


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