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The blockchain market is growing at a fast pace, despite the uncertainty about how governments will regulate this new technology. In fact, it is said that the blockchain market could grow from $4.9 billion in 2021 to $60 billion by 2026. In such a fast-moving market, many blockchain tech companies are coming up with different business models to solve real-world problems. There are already hundreds of businesses that are now working on different projects that range from financial services and healthcare to supply chain management and advertising. But how can startups successfully expand into the emerging market of blockchain?
In this post, we explore how startups are leveraging the power of blockchain, and the foundations you need to know to monetize your blockchain startup.
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What Is a Blockchain Startup?
The essence of blockchain technology is based on a number of innovations. These include decentralization, transparency, and neutrality. In turn, they provide the added value of making transactions consistent, fast, secure, and accessible.
Simply put, a blockchain consists of a set of data – transactions or codes. These are grouped into blocks, verified by a network of users, accepted as part of the chain, and distributed through a consensus mechanism.
A blockchain-based startup is a technology company that hosts some or most of its transactions in this system. The blockchain system also allows members of the company to share information with the community, other companies, and software.
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However, before you launch a blockchain startup, you need to make sure that this system is suitable for your industry. For example, if you’re in the healthcare industry, you can use blockchain to record medical data and patient records, including medical records and diagnoses.
How Startups Are Using Blockchain Technology?
The decentralized nature of the blockchain enables the emergence of new industries. These include cryptocurrencies (including Bitcoin and Ethereum) and decentralized finance (DeFi).
The International Data Corporation (IDC) predicted that 20% of IoT technologies would enable blockchain-based services by 2020.
Moreover, according to GlobeNewswire, the global blockchain market is expected to reach $69.04 billion by 2027. And to date, there are more than 70 million registered blockchain wallets worldwide.
The growth of blockchain-based startups is a fact. But how do blockchain companies use this type of technology? 🤔
As we mentioned earlier, each industry can benefit from blockchain in different ways. In the case of real estate startups, this technology can help you capture and share details about real estate listings, transactions, contracts, and financing, to name a few.
Or if you have a supply chain startup, blockchain can help you gather information about materials, parts, and products. It also helps provide details on contracts, documentation, shipping, and payment processing for suppliers.
Last but not least, in the insurance industry, blockchain can help encrypt contract details, manage claims or make payments.
A Blockchain Startup Success Story
Enigma bridges the gap between fans, their favorite artists, and emerging artists by giving them access to an asset or a unique and unrepeatable experience through blockchain technology. And even allows emerging artists to collaborate with established artists in the creation of new artworks. Enigma aims to build a new creative economy.
5 Steps to Build Your Blockchain Startup Business Plan
#1: Decide What You’re Going to Use the Blockchain For
Before you implement blockchain technology or create a blockchain-based startup, you must first understand the scope of this solution. Therefore, determine exactly what features you want to get from the blockchain. Then create scoping and project documents!
#2: Analyze the Costs & Benefits of Incorporating Blockchain
The decision to include blockchain technology in your business plan can impact your costs, revenues, and profit margins. So make sure you understand the costs associated with the launch of a blockchain-based startup and factor them into your business model and projections.
#3: Decide on the Framework of Your Blockchain Application
There are many ways to develop a blockchain system for a startup. On the one hand, you may be able to adapt an existing application and use it for your needs. On the other hand, you can use an established blockchain protocol –like Bitcoin or Ethereum– and build your own system based on it. And finally, you can develop your own blockchain protocol and system from scratch.
#4: Develop the Blockchain Application
When you start building a blockchain system for your business, make sure you get regular feedback from all the parties that will use it. Take their comments into account when developing the software! This way, you will create a finished product that is fully fit for purpose.
#5: Confirm This Is the Best Solution for Your Startup’s Needs
As we always say, an essential part of a business plan is to examine and analyze how the plan works. To make sure that blockchain technology is the best solution for your startup, you should talk to the users of the system, consultants and development partners. They will help you verify if the blockchain solution is the right choice for your business!
How to Monetize Your Blockchain Startup
There are several investment opportunities when you create a blockchain-based startup. For instance, the UNICEF Innovation Fund seeks to make up to $100,000 in equity-free investments (in cryptocurrencies) each year to provide early-stage funding and mentoring to blockchain technology startups that have the potential to benefit humanity.
If you’re looking for funding, you should also check out the best communities that bring investors and entrepreneurs together. These groups will have an impact on the future of your blockchain startup! 🚀