Blockchain-enabled emerging business models

The exploratory study sheds lights on the business models adopted by blockchain native ventures leveraging public blockchain infrastructures.
More specifically, the research work conducted aimed at answering the following questions:
Q1: Along which dimensions can the blockchain ecosystem be mapped?
Q2: What are the key archetypal actors and their strategic positioning?
Q3: What emerging business models are enabled by blockchain?

Transcript

1. STRATEGIC INSIGHTS ON BLOCKCHAIN INNOVATION BLOCKCHAIN-ENABLED EMERGING BUSINESS MODELS Enrico Ferro «What internet did for communications, I think blockchain will do for trusted transactions» Ginny Rommetty, CEO of IBM
2. STRATEGIC INSIGHTS ON BLOCKCHAIN INNOVATION Overtheblock is a LINKS Foundation’s initiative aimed at promoting a wider awareness of the opportunities offered by the advent of exponential technologies in reshaping the way business is conducted and society is governed.
3. overtheblock.io COPYRIGHT ©2019 LINKS TORINO | 14 SET 2019 Copyright © 2019 LINKS FOUNDATION 3 Transactions in our world Counterparties trust each other Counterparties don’t trust each other Between two or more counterparties can occur two types of transactions:
4. overtheblock.io COPYRIGHT ©2019 LINKS TORINO | 14 SET 2019 Problem setting Corporate trust providers Institutional trust providers Critical issues of closed DBs  Regulated access  Trust must be placed in the guarantor  Interoperability limitations  The intermediary takes a significant share of value
5. overtheblock.io COPYRIGHT ©2019 LINKS TORINO | 14 SET 2019 Copyright © 2019 LINKS FOUNDATION 5 What blockchain is to run a decentralized trustless system without a centralized authority Blockchain enables: REVOLUTION OF TRUST to avoid the double spending problem Blockchain is a Distributed Ledger plus a Consensus Algorithm
6. overtheblock.io COPYRIGHT ©2019 LINKS TORINO | 14 SET 2019 Copyright © 2019 LINKS FOUNDATION 6 Research questions What are the main dimensions along which the blockchain ecosystem can be mapped? What are the main archetypal actors and their strategical positioning in the blockchains ecosystem? What are the emerging business models enabled by blockchains?
7. overtheblock.io COPYRIGHT ©2019 LINKS TORINO | 14 SET 2019 Copyright © 2019 LINKS FOUNDATION 7 Methodology LITERATURE REVIEW Business Models: Academic literature, Strategyzer Blockchain: Academic papers, Whitepapers CASE STUDIES Long list of 1326 cryptocurrencies Mixed sampling approach: • Theoretical sampling • Empirical sampling 32 projects under lens CROSS CASE ANALYSIS Identification of 20 archetypal business models
8. overtheblock.io COPYRIGHT ©2019 LINKS TORINO | 14 SET 2019 Value ecosystem framework BASIC INFRASTRUCTURE • Distributed ledger • Consensus algorithm • Coin as validation reward ON-CHAIN APPLICATION LOGIC • Decentralized platform that runs smart contracts • Programming language UTILITY/ CRYPTO EQUITY TOKEN • Provides access to the services network • Guarantees voting and dividends rights OFF-CHAIN APPLICATION LOGIC • Back-end app- blockchains connection • Front-end user interface
9. overtheblock.io COPYRIGHT ©2019 LINKS TORINO | 14 SET 2019 Value ecosystem exemplification Bitcoin Ethereum Coinbase BAT Steem OFF-CHAIN APPLICATION LOGIC UTILITY/CRYPTO EQUITY TOKEN ON-CHAIN APPLICATION LOGIC BASIC INFRASTRUCTURE
10. overtheblock.io COPYRIGHT ©2019 LINKS TORINO | 14 SET 2019 Value ecosystem matrix SINGLE CHAIN CROSS CHAIN OFF-CHAIN APPLICATION LOGIC Decentralized applications Providers Financial Platform Providers UTILITY/CRYPTO EQUITY TOKEN ON-CHAIN APPLICATION LOGIC Protocols Providers Protocols Innovators BASIC INFRASTRUCTURE + +
11. overtheblock.io COPYRIGHT ©2019 LINKS TORINO | 14 SET 2019 Form real-life actors to archetypes SINGLE CHAIN CROSS CHAIN OFF-CHAIN APPLICATION LOGIC Services binders Liquidity providers Crowd aggregator Marketplaces enablers UTILITY/CRYPTO EQUITY TOKEN Exchanges Prediction market orchestrators Attention Monetizators ON-CHAIN APPLICATION LOGIC Miners Blockchain connectors Payment services providers BASIC INFRASTRUCTURE Turn-key technical developers Scaling providers Development tools providers + +
12. overtheblock.io COPYRIGHT ©2019 LINKS TORINO | 14 SET 2019 Emerging business models SINGLE CHAIN CROSS CHAIN OFF-CHAIN APPLICATION LOGIC Services binders Merged services Membership-based p2p lending Liquidity providers Crowd aggregator Distributed assets as a service Fly liquidity Marketplaces enablers Light intermediation UTILITY/CRYPTO EQUITY TOKEN Wallet to Wallet Exchanges Prediction market orchestrators Collective Oracle Centralized Exchange Attention Monetizators Prosumer platform Three-sided markets ON-CHAIN APPLICATION LOGIC Miners Solo mining Cross-chain atomic swaps like Blockchain connectors Pool mining Smart Bridges Cloud mining Cross-chain messaging Mining Marketplace Decentraliez exchange BASIC INFRASTRUCTURE Turn-key technical developers ICO as a service Trusted off-chain transactions Scaling providers + +
13. overtheblock.io COPYRIGHT ©2019 LINKS TORINO | 14 SET 2019 Copyright © 2019 LINKS FOUNDATION 13 USERS’ BASED VALUE GENERATION VALUE APPROPRIATION CAPABILITY Services binders Merged services V V V Crowd aggregator Distributed assets as a service V V V Marketplaces enablers Light intermediation V V V Prediction market orchestrators Collective Oracle V V X Attention Monetizators Prosumer platform V V X Three-sided markets V V V Liquidity providers Membership-based p2p lending V V V Fly liquidity V V V Exchanges Wallet to Wallet V V V Centralized Exchange V V V Miners Solo mining V V V Pool mining V V V Cloud mining V V V Mining Marketplace V V V Turn-key technical developers ICO as a service V V V Blockchain connectors Cross-chain atomic swaps like V X X Smart Bridges V X X Cross-chain messaging V X X Decentraliez exchange V V X Scaling providers Trusted off-chain transactions V X X Maturity model framework BUSINESS MATURITY LEVELS
14. overtheblock.io COPYRIGHT ©2019 LINKS TORINO | 14 SET 2019 Business model maturity SINGLE CHAIN CROSS CHAIN OFF-CHAIN APPLICATION LOGIC Services binders Merged services Membership-based p2p lending Liquidity providers Crowd aggregator Distributed assets as a service Fly liquidity Marketplaces enablers Light intermediation UTILITY/CRYPTO EQUITY TOKEN Wallet to Wallet Exchanges Prediction market orchestrators Collective Oracle Centralized Exchange Attention Monetizators Prosumer platform Three-sided markets ON-CHAIN APPLICATION LOGIC Miners Solo mining Cross-chain atomic swaps like Blockchain connectors Pool mining Smart Bridges Cloud mining Cross-chain messaging Mining Marketplace Decentraliez exchange BASIC INFRASTRUCTURE Turn-key technical developers ICO as a service Trusted off-chain transactions Scaling providers + +
15. overtheblock.io COPYRIGHT ©2019 LINKS TORINO | 14 SET 2019 Copyright © 2019 LINKS FOUNDATION 15 SINGLE CHAIN USERS’ BASED VALUE GENERATION VALUE APPROPRIATION CAPABILITY CROSS CHAIN OFF-CHAIN APPLICATION LOGIC Services binders Merged services V V V Crowd aggregator Distributed assets as a service V V V Marketplaces enablers Light intermediation V V V Prediction market orchestrators Collective Oracle V V X Attention Monetizators Prosumer platform V V X UTILITY/CRYPTO EQUITY TOKEN Three-sided markets V V V V V V Membership-based p2p lending Liquidity providers V V V Fly liquidity V V V Wallet to Wallet Exchanges V V V Centralized Exchange ON-CHAIN APPLICATION LOGIC Miners Solo mining V V V Pool mining V V V Cloud mining V V V Mining Marketplace V V V Turn-key technical developers ICO as a service V V V BASIC INFRASTRUCTURE V X X Cross-chain atomic swaps like Blockchain connectors V X X Smart Bridges V X X Cross-chain messaging V V X Decentraliez exchange V X X Trusted off-chain transactions Scaling providers Maturity model framework + + BUSINESS MATURITY LEVELS
16. overtheblock.io COPYRIGHT ©2019 LINKS TORINO | 14 SET 2019 Copyright © 2019 LINKS FOUNDATION 16 BTC 63.93% ETH 14.98% BCH 8,69% DASH 1,73% BTC ETH BCH DASH BTG LTC ADA XMR ETC NEO EOS QTUM LSK ZEC USDT NXT MONA BCN DCR VTC PIVX DOGE WTC EMC2 BTCD DGB Findings on the blockchain market VALUE APPROPRIATION CONCENTRATION Infrastructure & Exchanges > 97% Dapps & Innovators < 3% C4 = 89,34% Source: Coinmarketcap
17. overtheblock.io COPYRIGHT ©2019 LINKS TORINO | 14 SET 2019 Conclusions • The actors operating in the blockchain ecosystem may be mapped against two main dimensions: • position in the technological stack • number of blockchains with which they interact. • Eleven archetypal actors have been identified leveraging four strategic positions: • Dapps providers • Protocol providers • Financial platform providers • Protocol innovators • Twenty business models have emerged from the case studies conducted showing different levels of maturity in terms of: magnitude of the user base, clarity of the value generation and appropriation mechanisms. • From a business model perspective, three types of innovation were found: • The birth of blockchains-specific business models such as mining • The convergence of activities previously conducted by different players (eg: payment & reputation) • Light intermediation promoting a fairer redistribution of resourses through revenue sharing mechanisms
18. overtheblock.io COPYRIGHT ©2019 LINKS TORINO | 14 SET 2019 CONTACTS Over The Block STRATEGIC INSIGHTS ON BLOCKCHAIN INNOVATION overtheblock@linksfoundation.com overtheblock.io COPYRIGHT ©2019 LINKS POWERED BY Via Pier Carlo Boggio 61 | 10138 Torino (Italia)
19. STRATEGIC INSIGHTS ON BLOCKCHAIN INNOVATION Annexes: BUSINESS MODEL CANVASES
20. overtheblock.io COPYRIGHT ©2019 LINKS TORINO | 14 SET 2019 Distributed assets as a service
21. overtheblock.io COPYRIGHT ©2019 LINKS TORINO | 14 SET 2019 Three-sided platform
22. overtheblock.io COPYRIGHT ©2019 LINKS TORINO | 14 SET 2019 Light intermediation
23. overtheblock.io COPYRIGHT ©2019 LINKS TORINO | 14 SET 2019 Merged services
24. overtheblock.io COPYRIGHT ©2019 LINKS TORINO | 14 SET 2019 Ico as a service
25. overtheblock.io COPYRIGHT ©2019 LINKS TORINO | 14 SET 2019 Solo mining
26. overtheblock.io COPYRIGHT ©2019 LINKS TORINO | 14 SET 2019 Pool mining
27. overtheblock.io COPYRIGHT ©2019 LINKS TORINO | 14 SET 2019 Cloud mining
28. overtheblock.io COPYRIGHT ©2019 LINKS TORINO | 14 SET 2019 Mining marketplace
29. overtheblock.io COPYRIGHT ©2019 LINKS TORINO | 14 SET 2019 Membership based p2p lending
30. overtheblock.io COPYRIGHT ©2019 LINKS TORINO | 14 SET 2019 Fly liquidity
31. overtheblock.io COPYRIGHT ©2019 LINKS TORINO | 14 SET 2019 Centralized exchange
32. overtheblock.io COPYRIGHT ©2019 LINKS TORINO | 14 SET 2019 Wallet-to-wallet exchange