The rapid development of technology has been a challenge for many startups: how to effectively learn and implement new tools and concepts. Certainly, two of those advancements being constantly misunderstood and overlooked are blockchain technology and Web3.
I will discuss four practical use cases through which blockchain technology can be integrated into your startup. It gives actionable insights on how to get started and sets the stage that would define whether you’re raising funds, offering some extra services, accepting payments, or looking to maintain public ledgers.
What is Blockchain?
At its core, blockchain is a decentralized, public ledger that records transactions in a secure and immutable manner. Unlike traditional databases controlled by a single entity, a blockchain ledger is maintained by a network of nodes, ensuring transparency and security. Once a transaction is recorded, it cannot be altered or deleted, which makes blockchain a powerful tool for various applications.
Understanding Web3
Web3 is what the next phase of the internet will be named. Development is driving it for decentralization and the onboarding of the blockchain. While Web1 was static and Web2 was the entry of interactivity by way of social media and blogs, Web3 desires to create a more user-empowered and decentralized web. The potential for Web3 feels like the beginning of the internet experienced in the 1990s.
Blockchain Basics: Cryptocurrency vs. Token
But first, before we get into applications, let’s try to understand the difference between coins and tokens.
Coins: Digital currencies like Bitcoin or Ethereum that have their own blockchain.
Tokens: Basically, an asset that you design on a pre-existing blockchain. You can use tokens for almost all utilities or rights. For example, NFTs, utility tokens.
Four Ways to Use Blockchain on Your Startup
1. Use Crypto for a Fundraiser
How it Works: It is possible for startups to come up with, issue, and start distributing their own cryptocurrency or token so they can raise capital. In such a procedure, the early adopters receive certain rewards, such as early access not available to others, voting rights, or certain levels of discount on future goods and services. This way, it provides a novel way of drawing in people who are already in the crypto game to invest in these startups.
Example: LimeWire, for one, raised $10M on the notion of presale of its token entitling them to use its own coin and have the said benefits—hence, presale buyers would not get equity in the company.
Getting Started: First, you need to define the benefit that you wish to offer to the token holders. You can create your token using platforms like Ethereum. Additionally, always go the extra mile by working with experts in the field to ensure compliance and functionality.
2. Offer Extra Services to Customers
How It Works: Provide your customers with additional services or benefits using blockchain technology. This includes exclusive content, early access, or special discounts for the holders of your company’s own token or NFT.
Example: A start-up might mint NFTs that could give their holders lifetime access to high-value features or products.
Getting Started: Look for special value-adds that you can provide which add value to customer engagement. Platforms like OpenSea will help you in minting and management of NFTs.
3. Receive Payments and Spend in Crypto
How It Works: Being paid in cryptocurrency allows faster payments and costs lower fees than the traditional banking systems. This can work best for an enterprise looking to do business overseas, and even for a start-up in a country where the cost of transactions is very high.
Example: A startup will be able to pay in cryptocurrencies for service registration or server hosting, thus continuing to save both on the resource and on transaction fees/time.
Getting Started: Integrate crypto payment gateways like CoinGate or BitPay into your service. Be sure to clarify the legal situation on cryptocurrency transactions in your region.
4. Keep a Public Ledger
How it Works: Leverage the open ledger nature of blockchains to improve various business processes—say, by ensuring the genuineness of art pieces or supply chain transparency to finally push your approach to more reliable and responsible operations.
Example: An art business could create an NFT for each of their art pieces to ensure provenance and ongoing royalties to the original artist whenever that art is re-sold.
Getting Started: Learn how the adoption of a public ledger will help to optimize your business processes. Learning some of the blockchain platforms offering ledger solutions, talk about your ideas with a blockchain expert.
Conclusion
Blockchain technology designs various opportunities for startups from new fundraising strategies to communicating with your customers and gaining operational visibility for the business. Understanding and making best use of these applications place you right at the peak of this technological invention with your startup.
Call to Action: Do you have a creative idea about how blockchain can be put to work in your startup? If yes, leave a response in the comments section below. To know more insights and updates on blockchain and other fast-emerging technologies, do not forget to hit the like and subscribe button!
