Why Blockchain is Fundamental to the Startup Ecosystem
Over the last year, the word blockchain has dominated news headlines. Industry specialists, serial entrepreneurs, and innovative techies have not stopped chatting about cryptocurrencies, like Bitcoin and Ethereum, as well as the decentralized systems, known as blockchain, that they are built atop. With Initial Coin Offerings (ICO) and immediate funding available to players, blockchain is alluring to the up-and-coming startups in the world right now.
Despite speculation over a bubble building with the cryptocurrencies, considering that a single Bitcoin is worth more than $16,000 right now, there are a number of tangible, actionable use-cases for blockchain that will exponentially improve the startup ecosystem.
Here are a few reasons why startups should pay attention to blockchain and cryptocurrencies right now:
1. Early Adoption
Similar to the days when the Internet was brand new, offering immeasurable SEO potential for the early adopters, startups have that same kind of access to blockchain right now. The blockchain world is extremely underdeveloped, and there are still many critical components of the budding ecosphere that need to be fortified and verified before it’s available to the masses. Consequently, there are serious opportunities for startups that are willing to adopt blockchain technology and serve as early adopters in the Bitcoin networks. These startups will be able to build their blockchain community long before the space becomes too saturated to penetrate — which is definitely expected a few years from now
2. Digital Systems
Most startups have to adopt antiquated infrastructure to get their system up and running today. By doing this, it drives off their cost to do business, as it takes time and relies on a pen-and-paper type of system. Most of their vital processes are manual, opening the floodgates for human error on a daily basis. With blockchain networks, startups can conduct and automate transactions with a guarantee. Best of all, they don’t need to rely on third parties, like banks. Startups can also leverage the power of the blockchain to supplant the need for intermediary parties. This typical third-party structure is what bankrupts players in the health care, finance, and freight industries around the world today.
3. Data Security
Cybersecurity is a growing point of concern for companies of any size today, as our digital and technological tools become more advanced. According to Gartner, more than $86.4 billion was spent on cybercrime in 2017 alone. On a global scaled, it is predicted to cost $1 trillion of the next five years. Blockchain systems are soon to become a method for storing and organizing enterprise data in a way that keeps it safe and secure from aggressors. Relying on a digital ledger of transactions that can be programmed to record virtually everything of value, the automatic encryption makes it nearly impossible to hack into the transaction. Distributed systems cannot be manipulated by just one entity. They can only be changed by a majority consensus among the network, protecting against an onslaught of corruption.
4. ICOs
Startups can get their hands on funding, directly from investors, without third party actors through ICOs right now. It’s finally a solution that bypasses the intermediary actors determined to take a percentage of the startup’s success. With blockchain, startups have a chance at total autonomy.
Blockchain for Startups
Right now is the time to seize the blockchain availability for your startup, investing in the special access, data security, and digital seamlessness that come with it.
“Blockchain technology has the ability to transform not only financial services, but also many other industries.”
François Robinet Managing Partner, AXA Strategic Ventures
