Why are ‘Ecosystem blockchains’ important
These days are becoming crazy. More and more ICOs are being published each month, and while the amount raised per each ICO is starting to shrink (probably due to the lower Btc price), the total amount per month is still rising. Using data from CoinDesk, the total raised by all ICOs in the first two months of 2018 is 57% of the total raised in 2017.
As the quantity of ICOs is increasing, maybe the quality of some ICOs is not growing in the same way. We at ICOVend receive a lot of new ICOs to be listed, and it is clear that some projects only see ICOs as a good way of raising funds. Some, even don’t need blockchain at all to create their solution.
Ecosystem, Infrastructure and Protocol ICOs
In the middle of this situation, we have three types of blockchain projects that are worth looking at: protocols, infrastructure and ecosystems. You probably have seen these words here and there, if you are familiar with the world of ICOs.
Maybe the key word here is Infrastructure. Infrastructure projects are those which plan to create something that can become a technological base for other projects. Usually, they are a tool or a group of tools, meant to be used to create other projects. You can think about Amazon AWS Cloud services as an infrastructure service, as long as other companies will use their service to create some specific solutions.
Infrastructure projects are increasing in popularity and usually have success in being funded, this is because everyone accepts that we are in an early stage of blockchain, and therefor we need to improve the whole system from bottom up.
Protocols
Protocols are a specific type of infrastructure project. These projects focus more on a very specific problem and try to create a solution for it. Protocols often are more a ‘set of rules’ and a ‘way of doing things’ than a full software solution. The example that everyone uses to exemplify this is the http/ip protocol, the set of rules that define how computers communicate.
Some very interesting projects in the blockchain and ICO-world are protocols for anonymous and decentralized internet, and others focus on AI and how they should talk to devices and other AIs. A true exciting new world is opening here.
Ecosystems
And now we come to the subject of this publication: the Ecosystem blockchains. Nowadays it is very common to find new ICOs which claim to be “the new ecosystem of this or that topic”. But, if we define what an ecosystem really is, we can then filter the real good projects from those that really aren’t.
An ecosystem is something bigger than just an infrastructure, usually, it is formed from several infrastructures. A good ecosystem is one that defines all the actors that are going to be in the system, and how they interact whith each other. Yes, a good ecosystem must define protocols.
These protocols can be real communication protocols, as we talked above, or they can just be API definitions, that ultimately are some kind of alt-communications protocols.
Another key concept here is that ecosystems must create their own infrastructure, the base system where these actors are going to live and interact. This infrastructure will use their own protocols, but can use others, and even, other infrastructures.
And maybe the most important factor: ecosystems must define how the whole system is going to work. Concepts like actor roles, what are the resources, the rules that manage the system and finally: who is the customer. Or even better who is the customer of whom in the ecosystem.
Non-blockhain Ecosystems examples
Because of blockchain ecosystems are being developed right now, a good way to understand them is using some examples of more traditional business. I think that we have two perfect examples of ecosystems that are actually competing to be the ‘mobile ecosystem’. These are Apple App Store and Google’s Play Store.
Mobile stores are great examples because they have actors: app developers, end-user customers, mobile companies/manufacturers and marketing teams; they have protocols: app development API, rating and comments system, push notifications API, etc; and they have infrastructures: mobile OS, SDK, app marketplace, push notifications servers, mobile ads services...
In the end, the ecosystem is not the app store at all but the whole ‘mobile ecosystem’. And of course, they define the rules that govern this system, the roles and the way they can interact between each other. The key difference with blockchain ecosystem is that this one is a centralized system.
Decentralized ecosystems
Finally we arrive to the most important concept, the crown jewel. Imagine the ecosystem that we have been talking about, as a decentralized system. In other words, you define the system, create infrastructure and protocols, and create the rules and the roles for it, but in the end, the ecosystem is a ‘living thing’ that will operate by itself.
In decentralized ecosystems no one has the control. There is no admin role, like in Bitcoin and other crypto currencies. The system needs to have some consensus rules or at least, some self-management tools. The definition of this can be one of the hardest tasks to achieve.
Picture an ecosystem which defines a “rent your house or room to others” system. Yes, we are talking about the decentralized and ‘blockchained’ Airbnb. In this system, we have property owners and we have customers. Maybe we will include payment managers or ‘scrows’, who will be an intermediary between customer and owner, retaining the payment until the rent ends. We can include property sponsors role or other kind of marketing role. And in the end, we are only the developers, who maintain the code, but we don’t have control over the properties or the ratings in the system.
In decentralized ecosystems we won’t have an “Apple admin” who decides if your app can enter the app store or not. The system has its own rules, and your app will appear or not, based on the system mechanisms, most likely to include the community rating or another forms of government. The system is self-managed and no longer needs factors outside the community. Even the source code can be published as open source, and the ecosystem will not depend on the original developers forever.
Conclusion
As long as ICOs are a new funding model does no depend on business revenue but on “system value”, ecosystems and other infrastructure projects can be the best projects to fund, from the investor perspective and from a more philosophical point of view as well.
Remember, the value is in the system (and probably in the token or coin that reflect this value) not in the income. With this in mind, ICOs can fund true technological innovative solutions that the real world needs which transcend above companies whilst, still making a good profit on the investment by an increase in token value.
