When starting out in the blockchain space, everyone will have a point of rolling their eyes to hear the same two terms over and over again: “decentralization” and “getting rid of the middle men”. But as repetitive and vague as these things may sound, they are at the very core of many blockchain applications. The thought of democratizing finances and other areas of daily life is a major vision of many blockchain contributors.
At the same time, there are more and more owners, agencies and middle men coming up in the space – including us. Isn’t a service provider just another middle man? We cannot start in this space without recognizing that contradiction and dealing with it somehow.
Isn't this just... centralization?
The blockchain space has rapidly evolved, and while many of these developments are great steps forward, there are also some things that seem to be counterintuitive in a space that wants to decentralize the world. Some examples:
Companies emerge in traditional structures
Being a CEO and sole decision maker in a blockchain startup is a bit counterintuitive. Building a business model with optimized continuous revenue streams is contradictory to the vision of distributed control. Still, known structures are needed in order to bring innovations to life. Where will this lead us?
Service providers are just like the middlemen everyone wants to cut out
You have a service agency in the blockchain space? You organize events for participation fees? You provide blockchain-based services to large organizations? Congratulations, you are a new version of one of those middlemen everyone wants to cut out. Yes we know, we’re in the same boat here. So how do we deal with this?
The highest bids for exposure and influence
Event organizers, service providers, and “influencers” charge maximum rates for their offers. Some well-hyped parties misuse their status for maximum profit. Isn’t this exactly the type of thing that should be prevented with blockchain?
So where does this take us?
What do we conclude from these observations? Working in the blockchain space has a few implications that project teams and anyone else working in the space need to be comfortable with to some extent:
Blockchain as a protocol vs blockchain as a philosophy
Blockchain has many potential use cases, and is of equal interest to startups and large organizations. The difference in interest lies in using it as a technology solution, or using it as a philisophy to change existing systems and structures. It is important to understand where your interests are.
The traditional company structure might not work in the long run
Talking to many startups in this space, we see that the ones that truly share the decentralized vision of blockchain can imagine a scenario where they no longer own their company or the platforms and applications they built. Of course, no one wants to just give ideas for free to the world, and no one should have to do that. And blockchain does have a lot of applications that suggest a perfect fit into corporate backend processes. However, innovation should not be hindered by enforcing that fit, and there are other ways to hone your achievements than holding company ownership. Creating a long-term vision on where you want to go with your idea is a great start.
The community is your extended team
In traditional startups, the team is doing the work, and the customers give feedback. Of course, blockchain is not the only or first area where these lines become blurry, and there are great examples of companies working with and sourcing from their community long before blockchain was a thing. But in the blockchain space, this topic holds a lot of importance. It goes so far as the community being in the driving seat about where your product will go next. Can you take the challenge?
Letting go of full control
Setting a great idea free can be quite a difficult thing. You feel ownership, attachment, and have a clear vision of where you want to take this. But the users and the community might think differently about this. This is a topic in any startup, but it is even more pronounced in the blockchain space. You really have to be able to let go of your plans. Real decentralization requires a loss of ownership to some extent.
Reconsider your business model
Does your business model properly reflect your blockchain vision? If you really want to cut out the middle men, you can’t take maximum shares and maximum profit. If the vision of decentralization is not ingrained in every step, chances are the successful blockchain startups of today will just become the next big moguls with too much power tomorrow.