An economic model for blockchain delivery
Business networks, underpinned by blockchain technology, may bring transformation or disruption to industries, but in any case, in order to thrive, blockchain needs an economic model. If disruption is the aim, investments in technology, talent, and market synergy can be combined with the lure of economic incentives. ICOs, for example, typically rely on tokenomics, a term that describes the economic system of value generation in those networks. The token is the unit of value created by the system or network, either through making a platform for providers or consumers, or through co-creating a self-governing value network in its business model that various entities can use to their advantage for creating, distributing, and sharing rewards that benefit all stakeholders.
The ICO front, largely funded by cryptocurrencies, has defied current fundraising mechanisms in venture capitalism (led by crowdfunding projects), and, importantly, the struggle to discern the difference between a security and utility coin is disruptive in principle.
ICOs are looking to create an economic system built on the principles of decentralization, open governance (or self-governance), and transparency, a system that rewards innovation and eradicates disintermediation. ICOs saw some initial failures and some successes, but they nevertheless provided a preview of the future, where cryptoassets will become a basic unit of value—with valuation and fungibility defined by the network they originate from—fueling an economy built for and around innovation.
On the enterprise front, there's been more focus on understanding the technology and reimagining ecosystems, business networks, regulations, confidentiality and privacy, and the business models that impact blockchain networks in various industries. Enterprises looking to explore blockchain want to see quick proof points, use cases that can demonstrate results quickly and help them innovate with blockchain.
Blockchain is helping industries move to a more symmetric dissemination of information by providing built-in control of transactional data, provenance, and historical context. This can lead to more efficient workflows and transformed business processes. Many early projects, however, didn't focus on the core tenets of blockchain, leading to disintermediation, decentralization, and robust self-governance models. There's a good reason for it, though: industries and conventional businesses tend to be focused on their current business agenda, models, growth, and preceding all, regulatory compliance and adherence. This emphasis on current business operations means they're not naturally inclined towards disruptive models.