Who Is Really Benefiting From The Blockchain Revolution? Posted on : Apr 19 - 2018

This year, industries across all sectors are looking into how blockchain can benefit their businesses. Despite growing global hype, systematic inequalities remain across the blockchain landscape. As the underlying technology matures, some of these inequalities will be addressed and eventually overcome, while other inequalities are a product of market forces and are deeper and more complex. These inequalities require unprecedented solutions. Although blockchain undoubtedly offers a dramatic and provocative future, businesses and technology stakeholders alike must understand the risks they might encounter and what a successful pivot could require.

From an investment perspective, the most exciting aspect of the ongoing blockchain revolution is undoubtedly the initial coin offering (ICO), which has captured the attention of alternative investors and technologist across the globe. Even though this new capital raising mechanism has yet to be fully defined by government regulators, increased capital continues to flow into new projects. In a seemingly clear rebuke to the modern venture capital based funding model, new companies are motivated to raise greater capital sums without exchanging any formal ownership or obligation to coin or token investors. Likewise, coin or token investors are attracted to the opportunity to invest in blockchain ventures sooner than previously available without having to prove that they are accredited. ICOs enjoy global market access to investors, enabling them to raise unprecedented amounts of capital -- in some cases raising several hundred million dollars in hours or days.

Yet, this unregulated market has demonstrated it has the potential to harm investors whose participation has resulted in proprietors of ICOs with vast capital and no obligation. Some ventures have dissolved before any product delivery with no fiduciary duty to investors to continue on. While ICOs provide a unique way of raising needed capital, market participants and regulators alike have called for intelligent and tempered regulation. This inequality clearly privileges proprietors of ICOs over their investors. Ventures that voluntarily abide by the rails of securities issues established by their governments, produce a valid business plan and whitepaper and raise a targeted offer in line with their capital requirements will empower their beneficiaries greatly and reduce this inequality.

In this nascent environment, investors and market participants have demonstrated an eagerness to prioritize their investments. Blockchains and blockchain platforms have dominated the cryptocurrency conversation, building hype around the benefits of decentralization, privacy, innovation and immutability. The mechanism on which adoption depends is an ecosystem of applications fully reliant on blockchains and blockchain platforms. To the blockchain industry, these applications are known as decentralized applications (or “dapps”). An inequality of potential exists between the promised benefits of blockchains and the current applications built on them. Even in their infancy, dapps have proven to demonstrate significant potential over web technology at its advent. View More