You Don’t Need to Be a Blockchain Expert to Start a Blockchain Company
Privacy and data ownership will drive consumer decisions in 2018 and beyond.
PHOTO CREDIT: Getty Images
If you're still trying to get your head around Bitcoin and ICOs, that's understandable. Blockchain though, the underlying social encryption technology behind cryptocurrency, is applicable to any and all industries.
The far-reaching implications of its technology are well documented. Blockchain's ascension to top buzzword of 2018 is based on its potential to bring transparency and efficiency, eradicate fraud, wipe out corruption, fix supply chain issues, and give people power over their data.
A blockchain can be applied to anything, immediately. It will be years before we are using a different form of payment for most goods.
How This Can Work In Your Favor
When I view cryptocurrency for the immediate future I'm far more interested in the innovative uses of ICOs as alternatives to venture capital than if someone will eventually be able to use Dogecoin at their local supermarket. That's the real and applicable stuff for startups and entrepreneurs.
An ICO can be more substantial than a quick way to gain funding. Swytch, an upcoming ICO, is a renewable energy token. Built on a blockchain, it will use data and advanced modeling to estimate the relative environmental impact of user's energy use and allocate tokens accordingly.
Basically, they're creating a real monetary incentive for smart energy use. And they intend on a Proof-of-Production protocol that creates evidential proof of energy production to capture data directly from existing smart meters and create a network of trusted devices.
Why do I mention this? Because you can't create a simple ICO anymore. Those days are gone. A random coin offering will not perform. Just like any movement or marketplace, there has to be a compelling reasoning behind an ICO in 2018.
Last year, it was new enough to just create one and succeed. Now, it's just like pitching anything: It has to have substance and a marketing hook that points towards stability in an unstable market.
Why Your Startup Should Use a Blockchain?
The immediate and obvious answer is you may get more funding. The Long Island Iced Tea Company changed its name to Long Blockchain Corporation and the dollars started pouring in.
But don't they still just sell an assortment of ready-to-drink beverages? They sure do.
That oft-used example shows you how powerful the buzzword is this year. But beyond that, there are tangible reasons to use a blockchain. It's a public ledger that can store and manage all types of transactions. Transactions take place within "blocks" that are time stamped and linked to each other. Tampering with any information in a block would affect the entire chain, making it impossible to meddle with and more secure.
Facebook's recent struggles are proof that any company, no matter the size, is susceptible to eroding public trust if it can't keep user data secure. There's a reckoning coming. Established companies like Facebook will probably survive and be just fine. Startups looking to get funded might not.
In my experience, most venture capitalists will now choose a company using a blockchain to secure data and transactions over a company that isn't. That's becoming common sense. And the barrier to entry on creating a blockchain is not high. It's actually quite simple.
Understand the Trends
Currently, companies are willing to pay good money to access your data and do so on a daily basis, without your knowledge or input. Blockchain technology can cut out the middlemen and allow consumers to authorize their own data as they see fit.
Focus on this space intently this year. Read. Learn. Educate yourself.
Why? Consumers are going to want solutions and security regarding their data. A paradigm shift is coming and that always means opportunity. If you can invert the process and give people control over their own data, you'll be meeting a growing need while creating a potentially very large business.
But on a smaller scale, even allowing that within your existing business will help with consumer confidence.
Having control over your data means that you can charge companies for its usage, since you'll know every time someone wants to access it. ICOs like Sooloox are allowing consumers to authorize their data use, rather than simply provide it--reversing the marketing model by turning it into a consumer-led one. In an open data marketplace, consumers can trade their data like a commodity.
You don't need to be an expert in the technology itself. I'm not. But understanding emerging consumer needs (privacy, ownership of data) can help you predict where and how to position your startup to get funding or find customers, regardless of industry.