2018 probably saw an increasing amount of investments into blockchain and crypto related startups than another other year prior, and this trend is expected to continue; despite the down market. Nevertheless, many mainstream pundits and experts are wondering this day – how can anyone in this space actually make money?
Zero or negligible transaction fees
Just imagine if you are an ecommerce company, operating in this space. If you opted for traditional credit card payment gateways, you probably pay anywhere from 2-4% (or higher) for each transaction. Now, this may not seem like a lot, but what if you were a company the size of Alibaba or Amazon? Ecommerce companies are known to operate on low margins, so it makes perfect sense to accept cryptocurrencies, if not now, eventually.
Another space that previously was difficult to operate in was micropayments, and microloans. It doesn’t make sense to pay $1 to read an article, only for the writer to earn less than half due to fees. The introduction of cryptocurrencies changed the playing field, and now, a whole new and different business model has opened up. Content giants like Spotify and Netflix might just get displaced by new entrants in the near future.
Censorship by big media creates opportunities
It was not until big media such as Facebook, Twitter and Google decided to ban all cryptocurrency related advertising that cryptocurrency media sites began cashing it in. Major news sites would charge anywhere from 1 to 2 Bitcoins to publish a story, or simply to have any project’s ads on their site.
While we don’t see big media changing their stance anytime soon, the market has begun to become crowded with competition. That said, we still see tonnes of opportunities, in terms of services that can be offered to the market. Steem, for example is an interesting take on social media platforms. Designed to look and feel like Reddit, it rewards content makers with its native tokens. It also owns DTube which operates like Youtube, only that it’s more profitable for content makers to publish on DTube. So, censorship might actually work to the benefit of the industry.
Smart contracts do not develop themselves
While notable schools and colleges have only started to offer education in this space, there are already tonnes of companies (and even corporates) out there who need these skillsets since yesterday. A smart contract developer can easily earn US$120,000 per year, and what’s more interesting is that there aren’t many smart contract developers out there, just yet. Perhaps the most mind-boggling thing is that, blockchain developers can easily earn triple that amount.
Indeed, it’s still a niche market – like what digital marketing was roughly half a decade ago. The best thing is, anyone can learn smart contract programming and with a little more effort also learn how to build their own blockchain. Talk about liberation!
The lessons never change
Like its predecessors during the dotcom boom of the early 2000s, many “blockchain” companies and “leaders” will fail. Yes, the blockchain and crypto space is no stranger to scams, wannabes and lies. Perhaps in 2017-2018, too many people made too much money, and too fast. However, moving forward such opportunities will become lesser and lesser – as investors become more vigilant, and the space becomes more regulated.
That said, there still needs to be more products, services (and trust that comes along with it), in the blockchain space, to encourage competition, adoption and innovation within the space. After all, we can’t all be launching new tokens without any proper use cases, can we? Also, what good is our decentralized application when it’s superiorly slower than any apps available in the “traditional” app store?