A Blockchain Business Model is made of four main components: Value Model (Core Philosophy, Core Value and Value Propositions for the key stakeholders), Blockchain Model (Protocol Rules, Network Shape and Applications Layer/Ecosystem), Distribution Model (the key channels amplifying the protocol and its communities), and the Economic Model (the dynamics through which protocol players make money). Those elements coming together can serve as the basis to build and analyze a solid Blockchain Business Model.
Proof of Work (A Proof of Work is a form of consensus algorithm used to achieve agreement across a distributed network. In a Proof of Work, miners compete to complete transactions on the network, by commuting hard mathematical problems (i.e. hashes functions) and as a result, they get rewarded in coins.)
Bitcoin was the first digitalized and decentralized cryptocurrency, released as open source software in 2009. It uses an underlying technology called Blockchain, which works as digital, distributed ledger, that can be used as a mechanism for disintermediating trust in transactions. The Blockchain Technology, underlying Bitcoin is enabling new business models to emerge.
Proof of Work (ETH 1.0), switching to Proof of Stake (ETH 2.0). A Proof of Stake (PoS) is a form of consensus algorithm used to achieve agreement across a distributed network. As such it is, together with Proof of Work, among the key consensus algorithms for Blockchain protocols (like Ethereum’s Casper protocol). Proof of Stake has the advantage of the security, reduced risk of centralization, and energy efficiency.
Ethereum was launched in 2015 with its cryptocurrency, Ether, as an open-source, blockchain-based, decentralized platform software. Smart contracts are enabled, and Distributed Applications (dApps) get built without downtime or third-party disturbance. It also helps developers build and publish applications as it is also a programming language running on a blockchain.
ERC-20 Utility Token: Ethereum as the underlying protocol. An ERC-20 Token stands for “Ethereum Request for Comments,” a standard built on top of Ethereum to enable other tokens to be issued. Based on a smart contract that determines its rules, the ERC-20 enables anyone to issue tokens on top of Ethereum. As they are using a standard, those are interoperable. ERC-20 Tokens are critical to understanding the development of Ethereum as a business platform. Utility Tokens enable users’ participation in the network. Thus they work as a sort of built-in incentive mechanism for users to help the network grow.
The Graph is an ERC20 Utility Token (built on top of Ethereum) to enable consumers to freely query the blockchain through a fully decentralized database kept by indexers, incentivized by the payment of tokens (called GRT). The network is also ministered by curators and delegators that help maintain a high-quality index.
Brave is an open-source, privacy-centric web browser developed by Brave Software Inc. The company was founded by Brian Bondy and Brendan Eich in 2015. Brave makes the bulk of its revenue through banner advertising. In a rather unique arrangement, Brave users take 70% of the advertising revenue with the company taking the remaining 30%. Brave sells subscriptions to its video conferencing, VPN, and firewall products. It also makes money through affiliate commissions and merchandise sales in its decentralized web store.
Arbitrum Layer 2 Leveraging Ethereum’s protocol
A layer 2 solution can be applied as an additional protocol layer to solve various issues that the primary protocol can’t handle at scale. For instance, when it comes to Ethereum, when too many transactions go through the primary protocol, they can hardly go through, thus slowing down the main Ethereum protocol making it not usable. In the case of Arbitrum, this works as a Layer 2 scaling solution. Meaning it helps manage transactions on top of this extra layer to help further scale the volume of transactions handled by the main protocol. Arbitrum works as the middle layer for various applications. For instance, Uniswap decentralized exchange is also, in part, relying on Arbitrum to scale the transactions that go through Uniswap.
One of the most popular Ethereum scaling solutions, Arbitrum aims to speed up transaction times and cut fees on the Ethereum blockchain
Uniswap is a decentralized exchange that enables users to exchange any ERC-20 token and more. Uniswap is a DeFi application and protocol which sits on top of Ethereum’s main protocol, and it leverages two Layer 2 scaling solutions (Optimistic Ethereum & Arbtrum). These underlying scaling solutions enable many transactions to go through the platform smoothly. When looking at Uniswap, it’s essential to distinguish between Uniswap as a token (which allows crypto users to exchange the UNI token) and Uniswap. This decentralized platform sits on top of Ethereum and leverages Optimistic Ethereum & Arbtrum to enable millions of transactions on top of the platform.
Uniswap is a decentralized cryptocurrency exchange founded by former Siemens mechanical engineer Hayden Adams in 2018. The exchange utilizes an automated market-making system rather than a traditional order book for transactions on the Ethereum blockchain.
Axie Infinity is a Non-fungible token (NFT). NFTs are cryptographic tokens that represent something unique. Non-fungible assets are those that are not mutually interchangeable. Non-fungible tokens contain identifying information that makes them unique.
Axie Infinity is an NFT-based online video game developed by Sky Mavis, a Vietnamese game studio founded by Trung Nguyen in 2018. Nguyen combined his interest in blockchain accountability and the CryptoKitties craze to launch the game in August 2018. Sky Mavis generates the bulk of its revenue via the 4.25% fee it charges on all in-game purchases. This includes land purchases, monster NFT trading, and monster breeding. Axie Infinity requires that all new players purchase three monsters to get started. Since the cost can run into hundreds of dollars, Sky Mavis will lend players the monsters and collect a 30% interest fee once the player starts earning currency.
What does a blockchain-business world entail?
As more startup are springing up on Blockchain technologies, it is normal to see the proliferation of Blockchain protocols that promise to disrupt any industry. Just like when the web started to become mainstream, thanks to technologies like search engines.
We saw the birth of many search engines that made the search market fragmented; up to when Google became so dominant to tame most of the search market share.
Are we assisting also today to a similar phenomenon? In part. However, to understand the Blockchain Economy and the business models that will spring from it we’ll need a slightly different business playbook!
Business models in the internet era
The internet gave rise to a whole new set of business models. Not by chance, the term “business model” has become widely adopted throughout the spreading of IT tech companies:
There is one critical point to notice. Where the internet allowed new companies to emerge. That created the rise of business models that before were not possible. One trivial example is Netflix delivery of streaming content via the internet, with a subscription-based business model.
Today that model has become the standard. However, when you start thinking about how value has been created and captured in this internet era, one word comes to mind: data.
When you scroll the Facebook feed, what makes it so addictive is the ability of its algorithms to tap into behavioral data of its users to give more and more “meaningful” suggestions that only make people wanting more.
When you keep watching Netflix, its algorithms learn more about your tastes and preferences to create a stickier experience, that over time makes you wanting more.
Those algorithms learn through data, which might be classified as interactions you have on the platform. All that data is stored and handled by massive databases, called graphs. The access to those graphs isn’t open; it’s proprietary.
Indeed, that data is the main asset of those tech companies. It is what makes them monetize their business models, create unique experiences for their users and retain value in the long-run.
Therefore, even though initially the internet era paved the way for hundreds of new business models. It also created a winner-take-all effect. Where those companies able to capture network effects, would eventually gain a massive competitive advantage.
However, as pointed out by venture capitalist Fred Wilson, these deals were “fewer and larger.” In short, in the last years of the internet era, investors and existing players are consolidating toward larger deals that are creating more consolidation, winner-take-all effects, and high barriers to entry.
It is true that as of 2019, new internet companies can be born and become the next Facebook or Google. Yet, it might not be as true as it was a decade ago. The tech players dominating the market might use their cash at the bank to buy them up.
In short, the internet seemed to have produced more open business models compared to the past (initially it did). Consolidation kicked in, and new “conglomerates” have formed in the marketplace.
While this process might be normal in a world where applications powered by proprietary data took over, ti might not be so in a blockchain economy, let’s see why.
A blockchain economy based on fat protocols and thin apps
Web3 describes a version of the internet where data will be interconnected in a decentralized way. Web3 is an umbrella that comprises various fields like semantic web, AR/VR, AI at scale, blockchain technologies, and decentralization. The core idea of Web3 moves along the lines of enabling decentralized ownership on the web.
Joel Monegro, from USV venture capital firm, pointed out a compelling theory about value creation in a blockchain economy. This is the “fat protocols theory:”
Here’s one way to think about the differences between the Internet and the Blockchain. The previous generation of shared protocols (TCP/IP, HTTP, SMTP, etc.) produced immeasurable amounts of value, but most of it got captured and re-aggregated on top at the applications layer, largely in the form of data (think Google, Facebook and so on).
In other words, the protocols that allowed the web to work in the first place didn’t manage though to capture economic value, which instead went through applications. In a blockchain economy, the opposite happens. Applications become marginal compared to the protocols that make them work (think of Bitcoin or Ethereum).
Joel Monegro – argues – it happens for two reasons:
Shared data layer: in an internet-based business model most of the value is in the data captured from a platform or application. That data is proprietary, so the access to it will be restricted so that the company (think of Facebook, Twitter or Google) can monetize it. On the other hand, in a blockchain-based businessmodel, data can’t be closed, it will be shared. This will reduce the barriers to entry, and will allow new players to come into the market more easily
A cryptographic “access” token with some speculative value: in short according to Monegro, this aspect creates a token feedback loop, where interest in the token creates speculation and increases the value of it, which in turns only attracts more attention. This phenomenon, in turn, makes the value of the protocol grow way faster than the value of the applications built on top of it
This theory has important implications, as it points out how we need to change our way to think about business. That also might imply a new business playbook!
Do we need a new business playbook?
If we want to succeed as business persons in a blockchain economy (when and how it will prove to work), we need to change our playbook then.
In an infographic by visualcapitalist.com you can appreciate, how tech players that were dominant by the late 1990s have become marginal today:
For instance, back in 1998, AOL and Yahoo represented the Internet! Most of the web traffic went through those portals. In 2018, Verizon, which had created a business unit called Oath (which comprised Yahoo and AOL acquisition) wrote them off for approximately $4.6 billion!
Twenty years from now, who will still be on that list?
New business models might emerge at the protocol level
When Google announced its IPO, back in 2004, the world wanted to know its numbers. Everyone knew Google was a profitable company. Yet when it finally Google opened up the hood, the reality was even better than imagination:
Google made over three billion dollars in revenues and about four hundred million dollars in profits! The web wasn’t just that bubble that burst during the dot-com era. It proved to be a whole new world. Business people took notice.
If a blockchain economy might prove sustainable in the long-term, understanding of how the web evolved and how tech companies became successful will be critical.
However, we’ll need to look at this phenomenon with different eyes. We might want to keep our focus on those protocols that will eventually dominate the blockchain economy as value captured might subsequently be there.
The blockchain as a new business model toolbox
When the web kept growing at an exponential pace, new companies and innovative business models sprouted up. On this blog, I have spoken at length about the innovation introduced by Google Business Model and why I believe this is what made it so successful.
The paradox though is that what seemed an innovative business model a few years back, it seems has become an accepted and standard business model today. Another paradox is that as those tech giants have taken it all, many business people assume that this is the way it was supposed to be.
When you think about the hidden revenue generation model of Google and Facebook through advertising. This model has worked exceptionally well in the internet era, as Google and Facebook could retain the ownership of the data generated by billions of users around the world.
Another business model would have been too difficult. That is also why managing this data from massive, centralized data centers makes sense.
The blockchain might change that, as it allows finally to control data at the decentralized level. Each user might be able to retain the ownership of the data, while the company will make money based on its protocol.
Breaking down the blockchain-based business models ecosystem
We can break down the blockchain ecosystem in a few building blocks.
Among them we have:
Layer 1
Layer 1 protocols are the underlying infrustructure, which works as base layer to the whole ecosystem. Example of these layer 1 protocols include Bitcoin, Ethereum, Solana and many others.
These layer 1 protocols set the basic stage for the whole ecosystem to be build on top of it. While Bitcoin has been primarily used as a trading currency and store of value.
Ethereum, for the first time, has enabled many other applications to spring up. And as we’ll see, given the slowness of Ethereum, at scale, many other scaling protocols (called Layer 2) have been built on top of Ethereum and other layer 1 protocols.
Ethereum is an interesting case to look at, to understand the full crypto ecosystem, because it enabled various applications, layers and platform to be built.
Tokens
On top of a layer 1 protocol, tokens can be built.
Take the case of the ERC-20 tokens, which can be easily built on top of Ethereum:
An ERC-20 Token stands for “Ethereum Request for Comments,” which is a standard built on top of Ethereum to enable other tokens to be issued. Based on a smart contract that determines its rules, the ERC-20 enables anyone to issue tokens on top of Ethereum. As they are using a standard, those are interoperable. ERC-20 Tokens are critical to understanding the development of Ethereum as a business platform.
Tokens can be of various nature, and usually classified according to a few main categories:
Platform.
Security.
Utility.
Transactional.
Governance.
Smart Contracts
On top of layer 1 protocols, automatic contracts can be built, called smart contracts:
Smart contracts are protocols designed to facilitate, verify, or enforce digital contracts without the need for a credible third party. These contracts work on an “if/when-then” principle and have some similarities to modern escrow services but without a third party involved in guaranteeing the transaction. Instead, it uses blockchain technology to verify the information and increase trust between the transaction participants.
These smart contracts enable users to build custom applications on top of the main layer, thus making them executed automatically, when conditions specified in the smart contract are met.
NFTs
Another application first born on top of Ethereum are NFTs:
Non-fungible tokens (NFTs) are cryptographic tokens that represent something unique. Non-fungible assets are those that are not mutually interchangeable. Non-fungible tokens contain identifying information that makes them unique. Unlike Bitcoin – which has a supply of 21 million identical coins – they cannot be exchanged like for like.
A great example is Axie Infinity game, which leverages on NFT tokens to make its game way more compelling to users:
Axie Infinity is an NFT-based online video game developed by Sky Mavis, a Vietnamese game studio founded by Trung Nguyen in 2018. Nguyen combined his interest in blockchain accountability and the CryptoKitties craze to launch the game in August 2018. Sky Mavis generates the bulk of its revenue via the 4.25% fee it charges on all in-game purchases. This includes land purchases, monster NFT trading, and monster breeding. Axie Infinity requires that all new players purchase three monsters to get started. Since the cost can run into hundreds of dollars, Sky Mavis will lend players the monsters and collect a 30% interest fee once the player starts earning currency.
Layer 2
Layer 2 solutions are protocols built on top of layer 1, for various reasons. For instance, in the case of Ethereum, many layer 2 solutions have been built to enable the main protocol to handle more and more transactions, and preventing congestion.
For instance, layer 2 protocols like Optimist Ethereum and Arbitrum help platforms built on top of Ethereum (like Uniswap) to handle a very large number of transactions. Therefore, it helps these layer 1 protocols to scale!
Layer 3
Layer 3 protocols sit between layer 1 and layer 2 protocols. Let’s see the example of Uniswap to understand how they work.
DeFi, DEX & dApps
Another type of application born on top of layer 1 protocols and leveraging layer 2 protocols are decentralized finance and decentralized exchanges.
Uniswap is a renowned decentralized crypto exchange created in 2018 and based on the Ethereum blockchain, to provide liquidity to the system. As a cryptocurrency exchange technology that operates on a decentralized basis. The Uniswap protocol inherited its namesake from the business that created it — Uniswap. Through smart contracts, the Uniswap protocol automates transactions between cryptocurrency tokens on the Ethereum blockchain.
Uniswap is an interesting case study, as it well explains the intricacies of the whole ecosystem.
In fact, on the one hand, Uniswap is a protocol leveraging layer 2 scaling solutions (like Arbitrum) to enable users to exchange crypto tokens.
Therefore, Uniswap is built on top of Ethereum, however, to enable transactions at scale to work smoothly, it hooks up to layer 2 solutions, to enable the platform to work at scale.
At the same time, Uniswap also offers a digital token (an ERC-20 token) which is the native token of the platform. In short, users are incentivized to exchange it, in order to increase the value of the platform, and therefore also help it further scale and growth.
Tokenizing a platform is the new way to sustain and finance continoued product development, sales & marketing activities at scale. It also helps in building a community which is incentivized to participate in the network.
It’s all a meshup!
As you have seen so far, many protocols work in a straighforward way, like Ethereum and Bitcoin.
Other applications that sit on top of underlying layers have many moving parts, that are managed in part, on top of the layer 1, in part on top of the layer 2, and sometimes outside the blockchain (take the cave of Brave browser or search engine which are applications working outside the blockchain, leveraging the BAT toke as an incentive mechanism to the community!).
Thus, the ecosystem has evolved pretty quickly, and it’s enabling more and more pieces to come together to offer richer and richer experiences to users.
A few examples and use cases of Blockchain business models
Below a few examples of blockchain business models, as analyzed on FourWeekMBA by using the VBDE framework.
Ethereum was launched in 2015 with its cryptocurrency, Ether, as an open-source, blockchain-based, decentralized platform software. Smart contracts are enabled, and Distributed Applications (dApps) get built without downtime or third-party disturbance. It also helps developers build and publish applications as it is also a programming language running on a blockchain.
The Graph is an ERC20 Utility Token (built on top of Ethereum) to enable consumers to freely query the blockchain through a fully decentralized database kept by indexers, incentivized by the payment of tokens (called GRT). The network is also ministered by curators and delegators that help maintain a high-quality index.
In 2012, co-founders Christian Larsen and Jed McCaleb created Ripple, a technology acting as both a pre-mined cryptocurrency called XRP and a digital payment platform enabling monetary transactions. Where Ripple is the tech company, XRP is the decentralized ledger.
In 2014, Jed McCaleb – which also played a key role in the development of Ripple – created a cryptocurrency to provide fast, reliable, and affordable money transactions. The same cryptocurrency has considerably grown seven years later. It is now one of the most stellar cryptocurrencies to provide a real-time platform that links banks, payment systems, and people. Meet, Stellar!
Monero is one of the cryptocurrencies recognized for its privacy-oriented features. When it initially launched in April 2014, Monero was called BitMonero with the symbol XMR which translates to Esperanto.
In early 2019, a joint project between TRON and BitTorrent Foundation called BitTorrent Token came to fruition. BitTorrent Token launched to tokenize in-demand file-sharing protocol and enhance content delivery and bandwidth accessibility with blockchain technology.
Chainlink is considered the most established decentralized oracle network. As an ecosystem housing several decentralized oracle networks running simultaneously. As a decentralized oracle service built on Ethereum, Chainlink has the power to support the development of blockchain solutions for both traditional businesses and enterprises.
Uniswap is a renowned decentralized crypto exchange created in 2018 and based on the Ethereum blockchain, to provide liquidity to the system. As a cryptocurrency exchange technology that operates on a decentralized basis. The Uniswap protocol inherited its namesake from the business that created it — Uniswap. Through smart contracts, the Uniswap protocol automates transactions between cryptocurrency tokens on the Ethereum blockchain.
In a Blockchain Economy, a good chunk of value is at protocol level. Therefore, you will have a Blockchain Protocol (in this case Steem is the protocol) which has a set of underlying rules. The Steem protocol reaches consensus, and it follows a proof-of-stake (contrary to Bitcoin where there is a proof-of-value mechanism). On top of the Steem protocol, several applications can be freely built. Those applications will be decentralized, as they will be based on a decentralized network in the first place. In the Steem Blockchain context, Steemit is among the largest and most important (Steemit was the first application launched as a use case for the Steem Protocol).
A key takeaway and the Blockchain “killer app”
What I find most striking of the new Blockchain protocols that are getting created is that those allow the experimentation of new business models that challenge the old ones created during the web era.
Those business models though might be skewed toward protocols, rather than apps! One thing is clear so far. The blockchain killer app is “decentralized trust.” Where tech companies have proved pretty bad in handling our data (see the Cambridge Analytica scandal).
You won’t have to trust anymore a central authority, driven by business incentives with your data. You will trust a mathematically driven decentralized network. Of course, we don’t have to fall into the “utopian trap” where we think innovation is better than existing ones.
The Blockchain Economy might also allow new centers of power. Also, existing tech companies (Facebook is one) are also investigating a potential way to integrate it into their existing business models!
Web3 describes a version of the internet where data will be interconnected in a decentralized way. Web3 is an umbrella that comprises various fields like semantic web, AR/VR, AI at scale, blockchain technologies, and decentralization. The core idea of Web3 moves along the lines of enabling decentralized ownership on the web.
A blockchain protocol is a set of underlying rules that define how a blockchain will work. Based on the underlying rules of the protocol it’s possible to build a business ecosystem. Usually, protocol’s rules comprise everything from how tokens can be issued, how value is created, and how interactions happen on top of the protocol.
In software engineering, a fork consists of a “split” of a project, as developers take the source code to start independently developing on it. Software protocols (the set of rules underlying the software) usually fork as a group decision-making process. All developers have to agree on the new course and direction of the software protocol. A fork can be “soft” when an alteration to the software protocol keeps it backward compatible or “hard” where a divergence of the new chain is permanent. Forks are critical to the development and evolution of Blockchain protocols.
A Merkle tree is a data structure encoding blockchain data more efficiently and securely. The Merkle tree is one of the foundational components of a Blockchain protocol.
The nothing-at-stake problem argues that validators on a blockchain with a financial incentive to mine on each fork are disruptive to consensus. Potentially, this makes the system more vulnerable to attack. This is a key problem that makes possible underlying blockchain protocols, based on core mechanisms like a proof-of-stake consensus, a key consensus system, that together the proof-of-work make up key protocols like Bitcoin and Ethereum.
A 51% Attack is an attack on the blockchain network by an entity or organization. The primary goal of such an attack is the exclusion or modification of blockchain transactions. A 51% attack is carried out by a miner or group of miners endeavoring to control more than half of a network’s mining power, hash rate, or computing power. For this reason, it is sometimes called a majority attack. This can corrupt a blockchain protocol that malicious attackers would take over.
A Proof of Work is a form of consensus algorithm used to achieve agreement across a distributed network. In a Proof of Work, miners compete to complete transactions on the network, by commuting hard mathematical problems (i.e. hashes functions) and as a result they get rewarded in coins.
An Application Binary Interface (ABI) is the interface between two binary program modules that work together. An ABI is a contract between pieces of binary code defining the mechanisms by which functions are invoked and how parameters are passed between the caller and callee. ABIs have become critical in the development of applications leveraging smart contracts, on Blockchain protocols like Ethereum.
A Proof of Stake (PoS) is a form of consensus algorithm used to achieve agreement across a distributed network. As such it is, together with Proof of Work, among the key consensus algorithms for Blockchain protocols (like the Ethereum’s Casper protocol). Proof of Stake has the advantage of security, reduced risk of centralization, and energy efficiency.
Proof-of-Activity (PoA) is a blockchain consensus algorithm that facilitates genuine transactions and consensus amongst miners. That is a consensus algorithm combining proof-of-work and proof-of-stake. This consensus algorithm is designed to prevent attacks on the underlying Blockchain.
According to Joel Monegro, a former analyst at USV (a venture capital firm) the blockchain implies value creation in its protocols. Where the web has allowed the value to be captured at the applications layer (take Facebook, Twitter, Google, and many others). In a Blockchain Economy, this value might be captured by the protocols at the base of the blockchain (for instance Bitcoin and Ethereum).
A Blockchain Business Model is made of four main components: Value Model (Core Philosophy, Core Value and Value Propositions for the key stakeholders), Blockchain Model (Protocol Rules, Network Shape and Applications Layer/Ecosystem), Distribution Model (the key channels amplifying the protocol and its communities), and the Economic Model (the dynamics through which protocol players make money). Those elements coming together can serve as the basis to build and analyze a solid Blockchain Business Model.
Blockchain companies use sharding to partition databases and increase scalability, allowing them to process more transactions per second. Sharding is a key mechanism underneath the Ethereum Blockchain and one of its critical components. Indeed, sharding enables Blockchain protocols to overcome the Scalability Trilemma (as a Blockchain grows, it stays scalable, secure, and decentralized).
A decentralized autonomous organization (DAO) operates autonomously on blockchain protocol under rules governed by smart contracts. DAO is among the most important innovations that Blockchain has brought to the business world, which can create “super entities” or large entities that do not have a central authority but are instead managed in a decentralized manner.
Smart contracts are protocols designed to facilitate, verify, or enforce digital contracts without the need for a credible third party. These contracts work on an “if/when-then” principle and have some similarities to modern escrow services but without a third party involved in guaranteeing the transaction. Instead, it uses blockchain technology to verify the information and increase trust between the transaction participants.
Non-fungible tokens (NFTs) are cryptographic tokens that represent something unique. Non-fungible assets are those that are not mutually interchangeable. Non-fungible tokens contain identifying information that makes them unique. Unlike Bitcoin – which has a supply of 21 million identical coins – they cannot be exchanged like for like.
Decentralized finance (DeFi) refers to an ecosystem of financial products that do not rely on traditional financial intermediaries such as banks and exchanges. Central to the success of decentralized finance is smart contracts, which are deployed on Ethereum (contracts that two parties can deploy without an intermediary). DeFi also gave rise to dApps (decentralized apps), giving developers the ability to build applications on top of the Ethereum blockchain.
The history of Bitcoin starts before the 2008 White Paper by Satoshi Nakamoto. In 1989 first and 1991, David Chaum created DigiCash, and various cryptographers tried to solve the “double spending” problem. By 1998 Nick Szabo began working on a decentralized digital currency called “bit gold.” By 2008 the Bitcoin White Paper got published. And from there, by 2014, the Blockchain 2.0 (beyond the money use case) sprouted out.
An altcoin is a general term describing any cryptocurrency other than Bitcoin. Indeed, as Bitcoin started to evolve since its inception, back in 2009, many other cryptocurrencies sprouted due to philosophical differences with the Bitcoin protocol but also to cover wider use cases that the Bitcoin protocol could enable.
Ethereum was launched in 2015 with its cryptocurrency, Ether, as an open-source, blockchain-based, decentralized platform software. Smart contracts are enabled, and Distributed Applications (dApps) get built without downtime or third-party disturbance. It also helps developers build and publish applications as it is also a programming language running on a blockchain.
An imaginary flywheel of the development of a crypto ecosystem, and more, in particular, the Ethereum ecosystem. As developers join in and the community strengthens, more use cases are built, which attract more and more users. As users grow exponentially, businesses become interested in the underlying ecosystem, thus investing more in it. These resources are invested back in the protocol to make it more scalable, thus reducing gas fees for developers and users, facilitating the adoption of the whole business platform.
Solana is a blockchain network with a focus on high performance and rapid transactions. To boost speed, it employs a one-of-a-kind approach to transaction sequencing. Users can use SOL, the network’s native cryptocurrency, to cover transaction costs and engage with smart contracts.
In essence, Polkadot is a cryptocurrency project created as an effort to transform and power a decentralized internet, Web 3.0, in the future. Polkadot is a decentralized platform, which makes it interoperable with other blockchains.
Launched in October 2020, Filecoin protocol is based on a “useful work” consensus, where the miners are rewarded as they perform useful work for the network (provide storage and retrieve data). Filecoin (⨎) is an open-source, public cryptocurrency and digital payment system. Built on the InterPlanetary File System.
BAT or Basic Attention Token is a utility token aiming to provide privacy-based web tools for advertisers and users to monetize attention on the web in a decentralized way via Blockchain-based technologies. Therefore, the BAT ecosystem moves around a browser (Brave), a privacy-based search engine (Brave Search), and a utility token (BAT). Users can opt-in to advertising, thus making money based on their attention to ads as they browse the web.
Uniswap is a renowned decentralized crypto exchange created in 2018 and based on the Ethereum blockchain, to provide liquidity to the system. As a cryptocurrency exchange technology that operates on a decentralized basis. The Uniswap protocol inherited its namesake from the business that created it — Uniswap. Through smart contracts, the Uniswap protocol automates transactions between cryptocurrency tokens on the Ethereum blockchain.
Gennaro is the creator of FourWeekMBA, which reached about four million business people, comprising C-level executives, investors, analysts, product managers, and aspiring digital entrepreneurs in 2022 alone | He is also Director of Sales for a high-tech scaleup in the AI Industry | In 2012, Gennaro earned an International MBA with emphasis on Corporate Finance and Business Strategy.
