Viewpoint: Blockchain is the privilege of big companies? Small companies are leading

Foreword Many people believe that big companies have the capital to play blockchain technology, because this is a very burning thing. However, the opposite is true. Small companies are the dominant players in the blockchain industry. They are more innovative and have no historical burden. At the same time, the medium-sized companies are also facing an embarrassing situation, not only afraid of the subversion of small companies, but also worried that large companies have applied blockchains and they cannot connect smoothly. Now how the blockchain industry is distributed, we will introduce it to you today!

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In April 2019, Forbes released a new "blockchain 50", which mentioned many large companies that applied blockchain technology. This is a great article, but it focuses on large companies that use blockchain technology, but Forbes is somewhat biased about the commercial use of blockchain. The Forbes 50 are used primarily in the financial and supply chain sectors, but many of the more innovative and risky applications will cause the blockchain to disrupt many industries in the long run. Deloitte has done a lot of blockchain research, but still focuses on the world's top 500, but many companies that use blockchain applications are small companies. Medium-sized companies (100 million to 3 billion in sales) account for one-third of private equity sales, while small companies account for another one-third. So how do SMEs use blockchain technology in 2019?

According to the database of blockchain business consultants, we have found that 62% of the known blockchain applications are small and medium-sized, by researching more than 500 companies that do blockchain applications, including all of the Forbes 50 companies. enterprise.

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Source: Blockchain Business Consultants, Business Blockchain Application Database, www.bchainconsult.com

Although Forbes's article and the Deloitte blockchain provide valuable information and examples of blockchain commercial applications, they are somewhat biased against many applications of blockchain. They ignore the blockchain applications of many small and medium-sized enterprises, and sometimes give more misleading conclusions for the most important blockchain use cases.

For example, the main application of the blockchain in the Forbes Top 50 form is financial services, and the blockchain database shows that large companies account for about 70% of blockchain financial services applications. However, small businesses do not have many financial service blockchain applications (there are no crypto asset transactions or wallets as financial services). If all companies are counted, financial services account for about 20% of blockchain applications.

Blockchain services and blockchain consulting and development account for a larger share, and supply chains account for 15% of blockchain applications.

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Another section of the blockchain application contains many applications that small companies and startups are doing, and many innovations you can't see in big companies. Real estate, voting applications, customer points, and blockchain applications being developed by many other small companies will also have a big impact on the industry.

On the Forbes list, there are no food service companies, but many small and medium-sized restaurants accept encrypted asset payments and are also using blockchains for other commercial applications. One of the first cases of using bitcoin payments was the purchase of pizza. Burger King of Russia has launched “WhopperCoin” encryption assets to reward customers' purchases, and another steakhouse restaurant is testing blockchain solutions to provide transparency and traceability in the supply chain while providing food safety. Many restaurants have pointed out that they will only look for ingredients locally to ensure freshness and promote local economic development. Blockchain can solve this problem because consumers can scan the QR code to see where these ingredients come from. According to research by food marketing agencies, 44% of consumers want to make sure their food is safe, and 75% don't believe the content on the food label.

There are many mistakes and unclear signs in the restaurant, so it is difficult to ensure that all content is reliable, which may cause damage to the interests of consumers. However, some restaurants that use blockchain technology have seen sales increase by 5% to 9%. Many companies want to be able to reward users by using encrypted assets, and the data on the blockchain cannot be changed. Users and restaurants cannot eliminate bad reviews, and machine learning algorithms can also be used to provide recommendations.

Therefore, in the food service industry, we can also see many innovative applications of blockchain, but there are no companies in related industries on the Forbes form because they focus on large enterprises.

In some industries, only one company may use blockchain technology. Many small companies have obtained financing through I*CO, which not only bypasses regulatory issues, but also increases their certificate value because the price of this crypto asset is not constant, but as more people join the community. increase. Many other companies should also use the pass to increase the sales of new products and services, which allows consumers to obtain higher authority or purchase hot new products at a fixed price, as well as pass the transaction.

The difference between the use of blockchain technology between small and large companies is that large companies are reluctant to take policy risks and therefore ignore the I*CO approach, but small companies are happy to finance this way. According to icodata.io, 1883 I*CO projects were completed in April 2019. Some I*CO projects are fraudulent and some fail, but it is conceivable that 1,000 small startups backed by I*CO are still developing new blockchains, some even new ones.

Wal-Mart has developed a private blockchain system for food safety that must be used by existing suppliers and may be used by future suppliers. Commercial giants such as Wal-Mart use private chain technology, but according to Bitcoin believers, this may not be a blockchain at all. For them, the blockchain is decentralized and eliminates any control mechanisms. Many blockchain start-ups want to fight against large banks, large companies, and monopoly power.

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The Forbes blockchain article quotes Zuckerberg's words, "If we really want to, then we can do a complete decentralization. I am thinking the real question is, do we really need it?" Why Amazon or Are Wal-Mart, Facebook or Apple trying to develop decentralized applications? Are their current products not enough for users to use?

Early bitcoin enthusiasts considered the centralized private chain as a very contradiction. Why does the blockchain still need company control? Wal-Mart is able to let suppliers use the blockchain controlled by Wal-Mart, so why not use Wal-Mart-controlled databases directly? In fact, even if only one company controls the consensus mechanism, the blockchain is very meaningful, because the "blockchain" record storage mechanism can make the system simpler, faster and make the business easier to flow around the network. For integrated business systems, the blockchain is very powerful and does not require significant cost and risk.

However, large companies simply want to control the private blockchain so they can sell or develop data in their own systems.

Another misconception of the Forbes list is that they only cover companies operating in the United States. According to Wharton's report, China's achievements in blockchain applications are higher than in the United States. Many other reports and articles have pointed out that China has more blockchain projects than the United States, and many projects do not have US operations entities. From the business giant Alibaba to use the blockchain to serve the supply chain, to other large and small enterprises in China, through strong government support, these companies are launching blockchain business. The Agricultural Bank of China is one of the world's largest banks, and has begun to use blockchain technology to achieve real-time borrowing information updates, providing users with more transparent and fast approval time. Moreover, many of the information used by blockchain technology companies are not reliable, because they will keep their work confidential, or the media does not report at all, so many users in the blockchain can not see. Many small countries are also very concerned about crypto assets and blockchain business, and want to open a second Internet revolution, including Estonia, Malta, Switzerland, Singapore and the United Arab Emirates. At present, the lowest number of users in the blockchain industry are medium-market companies (100 million to 3 billion in sales). They are not willing to invest in large companies, and they cannot handle regulatory issues for small companies to conduct I*CO financing. .

Although medium-sized companies are now laggards in the blockchain, they will quickly use blockchain technology in the later stages, whether they are willing or not. Because if they are suppliers to large companies like Wal-Mart, or sell products through Amazon (assuming that Amazon will use blockchain technology in the future, and of course based on their own systems), these mid-sized companies must use blockchain technology. If there are many small companies in their industry that are trying to innovate with blockchain technology, then these medium companies must also follow.

Big companies and small companies have a big difference in blockchain applications, and the blockchain they use is different. These big companies prefer the private chain, especially the Hyperledger Fabric, while the smaller companies prefer the public chain (the so-called real blockchain). Blockchain application data shows that 28% of large blockchain companies are based on Hyperledger Fabric, while only 1% of small companies do so. Ethereum is the most popular blockchain for commercial applications. If I*CO is included, there will be more applications in Ethereum, as thousands of small companies use the Ethereum blockchain for I*CO. Financing. In fact, financial applications are more suitable for large companies, and many banks are using blockchain technology.

Small companies have many other blockchain cases that are more niche and more focused on one direction.

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Although the blockchain application of large companies is very attractive and may become the standard for the blockchain industry, many experiences tell us that the most blockchain applications that can produce disruptive effects are from small companies, and startups will be more Focus on blockchain technology. The "Amazon" of the next blockchain will emerge from small companies, not the top 100 in wealth. The Forbes Blockchain Top 50 and related articles are a good source of blockchain application information, but it is obviously not wise to focus on large companies.

It can be found that the IT staff of many medium-market companies feel that they should turn to the blockchain industry, but they have no funds or can't calculate the return on investment ratio of blockchain applications, because for blockchain applications, compared to traditional computers. System, blockchain applications are very difficult to control and grasp, so calculating ROI is very difficult.

Many mid-market companies are increasing their interest in blockchain and developing models to test trusted partners, but most are waiting and waiting, and have not yet officially launched.

In the next few years, it is believed that 90% of companies will use blockchain technology. Many mid-market companies use blockchain technology, whether it's serving other large companies that use blockchain technology companies, or competing with many companies that use blockchain technology to disrupt the industry.

Original: https://hackernoon.com/what-small-companies-and-the-middle-market-are-doing-with-blockchain-25843ea0dc5d

Author: Drew Miller Ph.D., Managing Director, block chain business consultant.

Translator: Alex & Daxie Think Tank