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 assisted to 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? We might be. In fact, when new technologies come about, competition initially is the norm.
Eventually, due also to the lack of regulation and the inability of bureaucrats to keep up with technological advancements, a few players dominate the market until they create real monopolies.
As of today, according to GS Statcounter, Google still dominates the market and there is no reason to believe it won’t:
Unless of course, regulators won’t break those monopolies. This also happened at the beginning of the century, when people like Andrew Carnegie, J.D. Rockefeller, and Henry Ford were so wealthy that they would dwarf today’s billionaires.
Today we’re assisting to a similar phenomenon in the cryptocurrency and Blockchain space. Many players were birth in the last years. A countless number of ICO happened, and many other cryptocurrencies got created.
In the short term, all this noise is a normal process of evolutionary selection of what it will eventually survive. Given the Lindy Effect, the Bitcoin as the first cryptocurrency which laid out a Blockchain protocol should survive at least other nine years (as it began in 2009). Of course, this is a probabilistic rule it’s not a certainty.
Yet beside what it will survive and what not I think there’s a compelling reason why the Blockchain protocols will be so critical for the future of entrepreneurship.
The blockchain as a business model toolbox for innovation
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 an ancient business model today. In fact, when you think about the hidden revenue generation model of Google and Facebook through advertising. This model today seems old for several reasons.
First, it is not aligned with the users’ interest. Right, users get free services but at what price? Second, as those models manage people’s data, they’re also responsible for that data.
With recent GDPR regulation, one might wonder whether that data which was an asset might instead turn as the most significant debt for both Google and Facebook.
The third, most critical point is connected to the previous two. As those companies have grown so large and powerful, many believe they will keep growing at that pace forever.
This belief in part is due to the high profitability of companies like Google and Facebook. Yet, although very profitable those companies are also very very fragile.
Tech giants that today dominate were allowed to do so also based on traditional economics beliefs (like economies of scales are good, large is more efficient and standardization wins). Now that new decentralized technologies, like the Blockchain have come about.
There is no more justification to believe that a large organization should be run by a few dictators taking most of the profits. In fact, the first element of a Blockchain is the ability to run a large organization in a decentralized manner.
One could start to wonder if we still need all those boards of directors, super paid executives, or people which only work is to manage other people.
The blockchain challenges all that. And in a way, it gives us the flexibility to experiment with new, innovative business models.
Let’s see some interesting ideas in the blockchain world. Remember, if you’re reading this article after a few years it might be that one, some or all of them turned out to be unsuccessful attempts.
Yet, I believe it will be undeniable that those unsuccessful attempts might have led to some great successes.
Bitpress for fact-checking
Bitpress is developing a framework that in a way should allow a better, bottom-up fact-checking mechanism. Will this succeed? Hard to say. There is one aspect though that I think is might be critical.
In their PageRank mechanism, they want to allow publishers to express an opinion on the resources they link to. In fact, those links can carry a vote which isn’t necessarily positive, but it can also have a negative connotation.
In other words, Google’s PageRank has also been built on the assumption that links are good votes that a site passes along another site.
Just like in academia, where referencing to another author means a favorable vote. So Google’s PageRank has used the same mechanism to rank web pages.
This has opened up manipulations and drawbacks. For instance, as of today nonetheless, the sophistication of Google’s new algorithms driven by AI, things like private blog network or PBN (a network of websites that exchange links from each other) are still a reality.
Those not only might be a mechanism that still works to rank web pages. But it also requires a lot of resources from Google to catch up with those networks. In fact, as of now, besides intelligent algorithms; Google might have a militia of engineers browsing the web to find those networks and blacklist them!
Would Bitpress mechanism prove successful?
Steemit for getting paid as a publisher
I got passionate about the Steem Blockchain the day I’ve read their white paper and when I started to experiments with the many apps sprouted up on this blockchain.
The most exciting part of this blockchain is the way it allows its community to monetize while either curating or writing content.
In short, Steemit and other Steem Blockchain apps, pay their users to do what they already do on another social network, for free. This model has still proved to be sustainable in the long run and as I explain in this article there are still some challenges.
Dock.io for professional data management
A company which most crucial asset is made of the data of its users will make sure to preserve it. However, as short-term logic might prevail by time to time, those companies will also try to profit as much as possible from that data.
This places the company owning the data in the conflict of interests with its users. For how much that company is comprised of smart individuals. Conflict of interests and the way the system works might well make those companies mismanage the data.
Dock.io is envisioning a decentralized way to manage professional data, which gives ownership to the users and have them choose which third parties can reuse that data.
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.
The old business models that were designed with the rise of the web, the search industry, and the social media industry have led us to the creation of tech giants that have vast power and control over our data.
The Blockchain allows us to challenge that. Of course, those same tech giants might also take advantage of those protocols for their own sake. And we can even envision the rise of new tech giants that will be built on top of blockchain protocols.
However, what seems good to me is the intrinsic decentralized nature of those models.
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