Why Established Players Need to Enter the Blockchain Market Now
The technology landscape is littered with the names of companies like MySpace and Yahoo that failed to take advantage of their market leadership position when upstarts broke through with a new idea. Typically hampered by their size and their unwillingness to disrupt their own models to compete for business, incumbent players delay innovation as their market share gets slowly eaten away by new companies.
We see blockchain and decentralized services as ripe for entry by established companies, assuming they have the willingness to embrace the decentralized model. However, sitting back and letting the young companies make inroads into blockchain won’t work. The Blockchain is no longer a niche play for small companies: It’s a mainstream play that established players shouldn’t ignore.
Here’s how we see the evolution of blockchain and the growth of decentralized services. At the birth of blockchain, the players were pure crypto-tech startups (for example, Zcash, Coinbase, and BitPay), and you had to be a true blockchain geek to understand a company’s value. As blockchain grew, investors started to pay attention — ICOs (initial coin offerings) popped up with more frequency, such as computing infrastructure (Golem), ad platforms (BAT), and predictive markets (Gnosis), based on decentralized systems.
Today the blockchain market is maturing. The time is ripe for established companies to benefit from decentralized systems, specifically more opportunities for all participants to reap value (e.g., users, employees, shareholders, and developers) and growth of the market. These companies can bring to the table established sales channels, a deep understanding of market mechanisms, large customer bases, and economies of scale.
Larger companies’ advantages can give them the edge against startups, even established newcomers. To date, companies like Steem and Gnosis haven’t gained much traction in the market, even though they’ve tried to stake out a first-mover advantage. Decentralized networks need critical mass to be successful. If you’re one of only a few people in a predictive market website or a social network application, then you can’t engage in many interesting conversations (or find anyone to gamble with). The platform may be awesome, but without scale, new companies can’t attract users.
Kin and Kik are embracing the paradigm shift that blockchain and decentralized networks allow. Kik’s origin is in chat, but with the introduction of the Kin cryptocurrency, Kik is creating an ecosystem that’s open and sustainable and builds on Kik’s strengths in the chat space. With millions of monthly active users, Kik has the scale that many companies in the blockchain market lack. The decentralized network on which Kin is based also offers a sustainable way to build revenue, in a way that welcomes a community of new developers, investors, and consumers.
Kin’s goal to connect a communications platform to a new cryptocurrency isn’t about going to war with the companies that staked out the blockchain market first. It’s about creating a space where everyone can compete, and where control and compensation isn’t limited to a few hands. This isn’t a quick transformation and will take time to implement. Companies need to be open to change, willing to disrupt their own lines of business and willing to adopt an open-source model. But companies that undergo this shift will be rewarded with more opportunity for growth within a far larger market.
Uriel Peled is head of operations at CoinTree, a blockchain advisory firm based in Tel Aviv, Israel. He is also a lead advisor to Kik on the Kin project. Prior to CoinTree, he was co-founder and CPO at Visualead, an Israeli O2O and IoT startup with investors such as Alibaba.
To learn more about Kin, please go to kin.kik.com or join the Kin Foundation Slack to learn more about the Kin project.
