Blockchain companies have gone through the highest of highs and lowest of lows in the matter of a few years. Things have been more steady now, with blockchain companies steadily creeping back to its former glory.
They’ve even been receiving a recent push with new corporate partnerships. But I’ve noticed that there’s still a prevalent skepticism towards blockchain technology (cryptocurrency, in particular).
As far as I know, many people were introduced to the ‘mysterious’ blockchain on May 22, otherwise known now as ‘Bitcoin Pizza Day.’ It’s a day of celebration for many, but a sad one for Laszlo Hanyecz. 10,000 Bitcoin in exchange for pizza. He definitely didn’t think those digital pennies were going to be worth hundreds of millions soon after…
In this post, I’m going to give you a brief overview of blockchain, and highlight blockchain companies and startups that are using this simple yet innovative technology to disrupt many institutions and industries.
Let’s get this out of the way first.
Cryptocurrency (e.g. Bitcoin) ≠ blockchain.
Cryptocurrencies use blockchain. The technology, however, can be utilized for much more than just currency.
Blockchain is quite simple. Actually, if you can’t tell from the diagram above, it’s really just a bunch of blocks chained one after the other.
Obviously I’m not referring to literal blocks and chains. Actual blockchains were probably children’s toys in the Middle Ages.
The blocks and chains are just a way of conceptualizing how the technology works.
The blocks represent data/pieces of digital information (e.g. a purchase with your credit card, a medical record, shipping information). A single block can actually house up to 1MB of data, meaning multiple purchases from Amazon, for example, can be stored in one.
The chains represent the public database. All blocks are ordered linearly and chronologically, secured by their own identifying code or ‘hash’ and the previous block’s hash. The blocks are, in this way, chained to each other.
Blockchain is a non-changeable, public record. While everybody has access to the database, only you and authorized parties have access to your data. If anything’s manipulated, everyone in the extensive computer network knows, ensuring users stay honest and consistent.
At the heart of the blockchain is the empowerment of individuals, rather than institutions or major corporations. In the following section, you’ll see how blockchain companies are using technology to democratize business processes.
Blockchain, while first implemented in cryptocurrency, has the potential to improve on and disrupt many industries. Before you commit to a business venture (as an investor or founder), you should consider how blockchain could affect your vertical(s). A blockchain company could render your product/service obsolete very soon. You should consider how you can adopt the technology now to stay ahead of the competition.
The days of amassing dead presidents could be slowly going away.
Traditional currencies are controlled by a central authority, whether it be a bank or government. This imbalance of power basically means the central authority can theoretically do whatever they want with its currency. Governmental instability, especially, can significantly devalue your money. The US national debt, for one, should have Americans seriously seeking out alternative currencies to invest in.
Cryptocurrencies extend over its digital network, operating without a central authority. Fear not, there’s little chance of a hacker seizing control of a cryptocurrency. Not only does this get rid of those pesky transaction fees (more on that next), you don’t have to worry about collapses in your government or bank. Cryptocurrencies function outside of that, retaining their value whatever may come.
Considering my passion for building startups with cryptocurrency, I had to https://firstname.lastname@example.org/corruption-in-the-music-industry-cf7a523b3771give a shout out to Boston-based blockchain company Circle. They have offerings for developers and business owners alike, facilitating over $2 billion in investments and transactions a month.
From Amazon to the Bank of America, ‘middleman’ companies/institutions generate revenue by taking a percentage of every transaction. In essence, their business model involves receiving a cut for facilitating a safe transaction. You can get into the particulars of each company’s business model, but they’re primarily making money by helping you obtain the actual service/product you want.
With the middleman’s fee, vendors jack up prices to compensate for lost revenue. In turn, customers have to pay more.
Because of the public nature and ironclad security of blockchain, safe transactions can be made directly between the vendor and the customer. Blockchain eliminates those ‘market-maker’ and transaction fees, allowing for lower prices across the board. Vendors can decrease their rates but still make the same or even more because cheaper prices can entice even the most stingy scrooges.
One particular blockchain startup/company that’s caught my attention is Mycelia. It’s well documented how many record labels scalp their artists for as much money as they can. Masterminded by two-time Grammy Award winner Imogen Heap, Mycelia allows musicians to sell their songs and albums directly to their listeners. With this alternative peer-to-peer business model, musicians completely own the rights to their art and receive the profits they deserve.
Not too long ago most of our records were typed out with a typewriter or written out by hand. Tons and tons of physical records getting shuffled around dusty cabinets lost forever. Human error is a real thing. People always think of my last name’s Starbucks rather than Starbuck. Figures.
Blockchain presents an opportunity to keep data related to you or an organization neatly organized and secure. Consider how beneficial it would be if we could have access to a clear record of where our food’s coming from, for example. With the supply chain carefully tracked and logged, we can help prevent foodborne diseases, and have total transparency as far as where our produce has been before it ends up at our local grocery stores. This could, ideally, prevent unethical practices from occurring in all kinds of industries, from fashion to food.
Leaning into this concept of building customers’ faith through the transparency of blockchain, FreighTrust offers a next-generation logistics operation platform. This blockchain company offers a service enabling businesses to closely monitor each step of the import/export process.
What are your thoughts on the blockchain? Are you still skeptic? I know I’ve left out a bunch of industry-changing blockchain companies, but who wants a laundry list anyway?
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First-time founders, I know, find it especially hard to avoid all the pitfalls of building a business from the ground up. My extensive experience as a startup CTO and technical co-founder has given me a lot of wisdom I’d like to offer to you and your startup. From bootstrapping to scaling, I’ve done it all—multiple times over.
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