Blockchain is becoming popular with businesses as the technology is proving superior to the traditional alternatives in data processing. From cloud services in Huawei to tokenised assets on Currency.com, blockchain has been paving its way into an array of industries.
Blockchains are distributed network technologies that allow you to interact safely and efficiently with anyone in the world. When a transaction happens on a blockchain, it is instantly settled. The distributed digital ledger is protected from unauthorised access and cannot be edited or deleted. No one person on a blockchain network can control the network for their own benefit or destabilise the system for others.
These features have converged to create powerful new business applications on the blockchain. These include everything from private financial networks to open, peer-to-peer lending networks. Here are the main types of blockchain and four exciting ideas of business applications.
There are two main types of blockchain used in business: public and private. It’s important to understand the difference between them to know exactly how to get the most benefit from them.
Public blockchains are the most well-known type. These include Bitcoin, Ethereum and many others. They are called ‘public’ because they are designed to be accessible by anyone in the world. In fact, you can’t stop anyone in the world from using them. This feature means they are ‘permissionless’ blockchains. This makes them accessible and useful for people and businesses around the world.
Private blockchains are designed to have some of the technical features of blockchains. But, they are not open and accessible for everyone. Instead, they are built and run by private entities for a specific purpose, like settling cross-border transactions quickly. Popular examples of private blockchains include Hyperledger and Ripple. Remember, if you are starting a business that relies totally on a private blockchain, you’ll never have complete control of your business.
4 Ideas of Blockchain Applications
Here are some business ideas involving blockchain that take advantage of this incredible technology in 2022.
1. Cryptocurrency Exchange Business
Many people around the world need platforms to exchange cryptocurrencies for different applications. The biggest crypto exchanges in the world are Binance, Coinbase and FTX. Together, they are doing more than $20 billion in trading volume per day.
There are also opportunities to create a niche cryptocurrency exchange business. For example, if you scroll down the list of top crypto exchanges, you’ll find exchanges with a smaller trade volume, but a more specific purpose. For example, The Rock Trading is an exchange platform built specifically to comply with European legislation. This is attractive to European companies where compliance is a priority. They are rewarded with more than $2 million in daily trade volume, which could be a very lucrative business.
As the cryptocurrency ecosystem gets larger and more complex, the demand for cryptocurrency exchanges will grow. There will be plenty of opportunities for those willing to take a chance here.
2. Crypto Crowdfunding
Crowdfunding has become one of the most popular ways of raising capital. People, businesses and researchers worldwide are skipping traditional finance channels like banks and grants and going straight to their peers for the cash. Blockchain platforms are making this process even more efficient. Even more traditional crowdfunding platforms like Kickstarter are moving to blockchain technology.
A profitable blockchain business idea is to create a blockchain crowdfunding platform that others can use to raise funds. There are already many of these platforms gaining popularity, and there’s room for more. The trick is to find a niche and serve a need in the market that is currently unaddressed.
The core functionality of a crowdfunding platform is to connect those with capital to those that need capital. This could be a lender-borrower model, such as BlockFi and YouHodler, or some other funding model specific to a certain type of project. This is where you need to understand the needs of your lenders and borrowers to fulfill the need better than anyone else.
These types of platforms have strong network effects. That means that once a platform is popular, it’s easy to stay popular and keep market share. That makes crowdfunding platforms an extremely lucrative business if you can gain traction.
3. Decentralised Cloud Storage
Cloud storage is a way of connecting someone that needs more computer storage with a computer that has excess storage capacity. Traditionally, this has been done by large cloud computing companies like Google, Amazon and Dropbox. You pay a service fee to access storage on their servers.
However, this structure is being disrupted by blockchain. Decentralised cloud storage allows users to connect with other users to share their storage space. These platforms allow users to connect free disk space to the decentralised cloud. They earn money for storing other people’s (encrypted) data in their free space.
Setting up a decentralised cloud storage platform is a lucrative business model that platforms like Storj are taking advantage of. You can essentially set up a cloud storage business without owning any storage space. It is similar to how Uber runs a taxi service without owning any cars. And, we all know how successful that company has become.
4. Crypto Gaming Platform
Crypto gaming has been one of the early success stories of blockchain technology. Users love unique, tradable in-game assets that they can truly own and trade with each other.
We are still in the very early days of this industry. There are many opportunities to create new crypto gaming platforms that cater to a certain segment of the market. Or, to make a profit by using the current platforms in an economical way, like buying and selling crypto gaming assets. People have earned hundreds of thousands of dollars on CryptoKitties and other crypto games.
There are some exciting opportunities to set up new businesses in 2022 that take advantage of blockchain technology. There are challenges to starting a business with emerging technology, and you’ll have to be highly educated on the specifics of blockchain. But, if you can pull it off, you could have one of the fastest-growing businesses in the world.
This is a Sponsored Feature