The world is now talking about Blockchain. The rise of this technology brought with it many changes. One of it was many startups in the same domain.Many companies render this technology and are propagating the idea of using the same in different verticals. The question that pops up in mind is, how do these companies earn revenue? How do they make money? Well, to answer this question simply, one can say that by rendering their technological help. But, again, the question remains the same; how do they make money?
How are Blockchain businesses making money?
Well, through this, blog, I will be explaining the money making mechanism of Blockchain businesses or the startups.
Taking the things in general, There are various ways by which Blockchain businesses are generating money. One of it is by selling their services or the products they develop. An important point to note here is that initially, the Blockchain companies raise funds to start the business or any new project. They can do this by either :
- Attracting the investors like VCs or other companies
- By offering ICO or Initial Coin Offering
Some big players attract millions and millions of funding. Here is a list of 10 popular companies that are getting funding.
- 21 Inc.
- Digital Asset
Companies like Google, Goldman Sachs, Citi Bank, Overstock.com have invested in projects like Ripple, Digital Assets, Blokchcian info, etc. Some of the prominent banks from the US like JP Morgan. Wells Fargo, Bank of America have also shown interest towards this technology.
Where did popular America’s banks invest?
JP Morgan Chase invested in Axoni, Digital Asset, and Circle
Morgan Stanely – It became a part of R3 consortium
Wells Fargo – it also invested in Axoni and is also a part of R3
Bank of America- is a part of R3 and ripple
As mentioned above, ICO is also a way via which Blockchain business get the money. Companies in this domain raised more than $1.5 billion through ICOs.
There are many Blockchain businesses, and many are on their verge of development. These companies earn money in the following ways:
Software as a Service – This is popular via which businesses are earning money. They charge fees for using their API and infrastructure. Examples include Blockcypher and Tierion.
Professional Services – There are companies which develop a custom solution for their clients based on Blockchain technology. These companies charge money for developing such solutions. The examples include IBM, Gem, and Deloitte.
Flat Fees & Transaction Fees – This yet another popular way such businesses are earning money. Companies build and maintain a network between a consortium of partners. They charge a subscription fee or transaction fee for the activity in the network. Example: Chain, R3Cev.
Service Level Agreements – Some of the companies indulge in service level agreement wherein they build platform and host infrastructure. They offer SLA for maintenance and uptime. Example: Microsoft and Bloq.
Cryptocurrency Speculation – You would have often heard about the token. Many Blockchain companies issue their token, or the management holds a large amount of cryptocurrency like Ethereum. These companies work towards increasing the market value of the token. Once the value increases, the companies sell the token to the speculators. Example: Factom, ConsenSys, and Lisk.
These are some of the popular ways the companies in this field are earning money. Although, this technology is at a nascent stage and is still to evolve and mature. But for now, we have them growing and flourishing.
Many companies are also investing in this technology, and thus, it is garnering the attention of many. Blockchain came into existence in 2009, and since then it has never looked back.
The technology seems to be growing with each passing day. Although, many claim this to be a bubble that will soon burst. However, the pace of improvement and increasing application in different fields shows that it is here to stay. There is no domain which in untouched with the impact of Blockchain technology. Companies in healthcare, medical, transportation, retail, etc. are eyeing towards this technology as a probable solution to the issue of safety. This has made more and more companies invest money in Blockchain companies. Hence, we have them earning more and more money.
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