Types of Blockchain Business Models

Ever since Satoshi Nakamoto released the Bitcoin whitepaper, the blockchain technology seems to have gained a life of its own and has become a subject of interest across a wide variety of industries.

Several businesses have begun operating on a new business model which is based on the blockchain. In this article, we will talk about successful implementations of blockchain business models.

The Need for Blockchain Business Models

With blockchain, companies can turn their business into decentralization platform, which can change how their business works. It improves the individual elements, the flow of transactions, profits, and also secures growth. To succeed, these models should make sure that they are helping both the company’s employees and end-users.

Now, the question to ask here is, how precisely can one utilize the blockchain in their business?

• You can store data within the blockchain which cannot be tampered with.
• Many businesses have used the blockchain’s transparency to boost the functionality of their supply chains.
• Many have combined the blockchain with artificial intelligence to build their own decentralized AI model.

Now, let us take a look at some blockchain business models.

Model 1: Utility Token Model

What is the definition of the utility? Utility means the total satisfaction that is obtained by the consumption of the goods or services. The utility token model stimulates the functionality in their business via the application of the tokens. Ripple and Stellar are great examples of these kinds of models. The banks who are part of their network can facilitate fund transfer by using the XRP or XLM tokens.

Model 2: Blockchain as a Service

The blockchain and the decentralized ecosystem, in general, can be incredibly scary for the newcomers. The Blockchain-as-a-Service (BaaS) model provides a service where a business’ clients can outsource all the backend stuff while putting their focus only on the frontend. BaaS vendors offer services such as user authentication, database management, remote updating, push notifications (for mobile apps), cloud storage, and hosting.

Model 3: Securities

This is a relatively new business model. Recently, many firms have taken up the securities or “security token offering” business model. A token is classified as security since there is an expectation of profit from the effort of others. If the ICO does not follow particular regulations, then they could be subject to penalties. However, if all the rules are honored, then these tokens have immensely compelling use-cases.

The real value in security tokens lies in how they can totally redefine the meaning of “ownership.” They can democratize assets and distribute them among people all over the world. To give a very rough example, instead of holding a gold coin, which may be out of a lot of people’s budget, it is now feasible for 100 people to keep fractions of that gold coin.

Conclusion

There are many new business models based on blockchain out there. The innovative approach to the business certainly has the place in the market, and we can expect to see many more models which work well and provide services in a different way.