How Blockchain Can Revolutionize Business Development?

The crypto-space is constantly evolving and so too are the fundraising and development options available for businesses. Many companies can benefit from the implementation of blockchain technology but not all businesses have much use for a native token, and some lack the knowledge to enter the space without support.

As a result, new methods of funding have been developed and we’re seeing more blockchain-based companies entering into partnerships. For example, LEXIT and Polymath have teamed up to increase the liquidity of abstract assets such as IP, patents, and stocks.

Another startup called blockhive is encouraging a small army of companies to work together and has developed a unique blockchain-based funding method (Initial Loan Procurement) that addresses regulatory and tax issues to make it possible.

Blockchain technology is already changing the business world

The Internet changed the world. We were doing fine before it came along, but now the way we shop, communicate, bank, and spend our money has been revolutionized. Without the Internet, most of us would struggle to get by now. As before, we are doing fine now, but that does not mean blockchain technology won’t have a similar impact — it could be even greater.

Unlike the Internet, blockchain technology doesn’t just allow us to communicate, trade, or store value. It provides immutable records of transactions that are protected by the highest level of cryptography. It allows us to exchange value quickly, without intermediaries, and without the need for trust. The systems currently in place to facilitate our online needs simply can’t compete with blockchain technology, and the gulf is only likely to increase as the technology evolves.

The publication of Bitcoin’s whitepaper in 2008 has already disrupted the status quo. The world’s first cryptocurrency was intended to make democratic money a reality for everyone, but it had another effect – the underlying technology opened a Pandora’s box of innovation, and in the hype, thousands of blockchain-based projects have emerged.

There are too many projects to list, and they span practically every industry, but one important development was the emergence of blockchain-based crowdfunding methods. Ethereum launched the world’s most successful ICO in 2014, and only four years later, the crypto space is thriving with thousands of new tokens available. It is clear that many entrepreneurs believe the future of businesses is on the blockchain.

Why are startups so interested in the blockchain?

ICOs have been a popular method of fundraising for new businesses as crypto transactions aren’t restricted by borders and exchange rates in the same way fiat currencies are. It can also be difficult for new businesses to raise funds in a traditional manner. For example, a bank may refuse a loan because they do not understand the vision of the entrepreneur. With blockchain-based funding, anyone can support a project they believe in. This gives startups access to funding they might never have acquired.

Such widespread interest in blockchain technology indicates a growing confidence that the technology is here to stay, and if that is the case, it makes sense for new businesses to adopt a blockchain-based model. It gives them a chance to get ahead of competitors who may be dragging their heels when they should be adapting. It also makes it less likely that a startups business model will need to be radically altered in the future to accommodate new technologies.

Some big names are interested in the technology

It is not just startups taking an interest in the space. Facebook is reportedly looking into blockchain technology, and Uber’s co-founder, Garrett Camp, is currently developing a new cryptocurrency called ECO.

Estonia has a blockchain-based e-residency program granting citizens worldwide access to Estonian services like banking and taxation. There are too many projects to list, but the evidence that blockchain technology is going to be huge is overwhelming.

The ICO is being left behind by new funding methods

Airdrops: These are like ICOs except participation is free, enabling citizens to participate even if their authorities prohibit the purchase of cryptographic tokens. They are more of a marketing tool than a funding mechanism as they encourage support from new token holders who want to see the coin (and by extension the project) succeed.

STOs:  These are basically ICOs for securities. Unlike ICOs, all security token offerings need to adhere to strict regulations. Projects like Polymath are developing solutions to allow companies to migrate their IP and other assets onto tokens with “baked in” KYC/AML regulations. This token model makes these assets highly liquid and could disrupt the securities market.

ILP: Initial Loan Procurement is an all-new fundraising method developed by blockhive and its partner Agrello. Blockhive is experienced in developing blockchain strategies for companies, while Agrello builds legally-binding self-aware agreements on the blockchain.

ILP is simply a form of fundraising that utilizes blockchain technology to allow token holders to sign loan agreements on the blockchain and become creditors. The funds raised are used to develop the blockhive ecosystem (made up of several partners who share profits), and creditors are rewarded yearly from the operating profits of this ecosystem. This model gives token holders the ability to trade their loan rights with others who can update the smart contracts and acquire the loan rights to receive payments. It could draw attention away from the ICO space in the coming years.

Is blockchain the future of business development?

ICOs were the first attempt of businesses to raise funds on the blockchain. They’re flawed and have led to the development of better models. Innovation won’t stop here, and just as the first ICO brought more companies to the space, we can expect STOs and ILP to do the same and to evolve continually to better suit the needs of businesses.

Blockchain will not just disrupt the way businesses are funded. It is going to change everything from the way they’re structured, how they protect consumers, and how transparently they operate. Immutable ledgers will encourage the best companies to be more open about how their workings allowing potential customers and partners will be able to establish trust in a manner that would have been impossible in the past.

Blockchain is here to stay and it is already disrupting every major industry.

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