If you have not lived under a rock for the past 10 years, undoubtedly you have heard about blockchain technology. It started its journey to provide an alternative to the regular currencies, viz., cryptocurrencies, it is already making its mark in almost every industry possible. Global blockchain technology revenues are predicted to climb to over 23.3 billion U.S. dollars in size by 2023. After the cryptocurrencies took over the digital payment world, the technology behind it became available to the public knowledge which fascinated many tech-savvy business-minded individuals, and tons of blockchain-based startups began to come about. Some of them, however, made bold marks of them in the business world, whom we are going to discuss in this article.
To understand blockchain-based companies, first, we need to understand the blockchain technology itself. If we explain in very simple terms, “blockchain” is merely a series of time-stamped “blocks” containing digital information, stored in a public database using cryptographic principles or “chain”. This digital information consists of 3 parts – information about a transaction, information about the participant of that transaction, and special information (hash) which distinguishes every single block from one another.
Blockchain is a revolutionary technology that beats every other transaction technology that we have so far because of its very special features.
- Decentralized network: The record of data in a blockchain is managed by a cluster of computers instead of one. It has no central authority controlling it – hence, this data is decentralized.
This way, blockchain creates a decentralized network, acting on a peer-to-peer basis. So it cuts off all the middlemen and gives the power back to the owner of the assets.
- Distributed ledger: A “block”, before being added to the “chain”, is verified by potentially millions of computers distributed around the network. So for any transaction to be added to the blockchain, it needs to go through a whole lot of validation process, which makes it more trustworthy than the regular transactions.
- Immutability: Only verified transactions are added to the blockchain; and once data is stored in a blockchain post going through the unique verification protocols of a particular network, it cannot be altered. If data in one block changes, data in all the subsequent blocks change which calls for the consensus of the network majority. This immutability of the data adds an extra layer of reliability and security.
- Tamper-proof: Once data is added to the blockchain, it is available publicly. That is why no one can change the data without leaving their own marks on it. As the ledger is distributed among all the transaction participants, it exists simultaneously in multiple places; and if there is any single point of failure in the process, all the copies on all these computers are updated at the same time. This makes the data incredibly secure.
- User Authentication with Cryptographic Security: Each user with access to a blockchain is issued two cryptographic keys — private and public. The public key is exposed to all users for verifying request details and other work. However, the identity of the user is hidden with a unique obfuscation called “digital signatures”, which is the private key for the users. This cryptographic security of user access makes it almost impossible for identities to be hacked and data to be compromised.
- No transaction cost: Being decentralized, transactions over a blockchain carry no transaction cost, making them much cheaper than other transactions.
- Smart contracts: Blockchain transactions are programmed through smart contracts that encode all the commercial and regulatory rules that need to be enforced. Transactions between the nodes are only triggered when all the conditions are met. For example, the receipt of a required set of documents confirming the acceptance of credit terms can trigger the release of a loan to a customer.
All this is verified digitally with no human help. This cuts the middleman off which reduces the possibility of corruption as well as human error.
Now, before we get into successful blockchain startup companies, you need to understand what it means to have a startup and what it means for a startup to be “successful” because they really are not the regular tom-dick-harry businesses that you see around you every day.
Whenever the word “startup” is mentioned, most people directly relate it to silicon valley and the young college dropouts coding their heads off, drinking beers and smoking joints in the middle of the day, and chatting about big investment buddies. The real picture is not necessarily this. Although there is no hard and fast definition, fundamentally, a startup is a small business started by one or a few entrepreneurs with a small team to develop a unique product/service. It is called a startup typically in the early stages of it, when the investments in them are primarily by the entrepreneurs themselves – before they become big corporations. By definition, Microsoft, Facebook, Amazon, Apple – everyone started their ventures as startups.
According to the Small Business Association, the definition of startup goes something like this –
“In the world of business, the word ‘startup’ goes beyond a company just getting off the ground. The term startup is also associated with a business that is typically technology-oriented and has high growth potential. Startups have some unique struggles, especially in regard to financing. That’s because investors are looking for the highest potential return on investment while balancing the associated risks.”
What makes a startup different from other businesses is its unconventional and innovative vision, growth potential and independence. Startups generally are not affiliated with any large corporations. They operate to solve a problem in the world and focus on growing and scaling rapidly – which means they make something that they can sell to a large market. After they prove their worth in the market, usually they receive funding from angel investors or venture capital firms, instead of loans and grants which is the case with other small businesses.
If the definition of a “startup” sounded a bit confusing, the idea of success in it is even more so. The concept of a startup is bringing the innovators to the business world, and hence in the traditional sense, it is difficult to define anything related to them. So the idea of “success” for a startup company varies and various people have various perspectives towards it. Things eventually come down to earning money and gaining profit, but startups see profits in a different light than other businesses. There are a few aspects of it which almost everyone agrees with and which we will see below.
- One that has an impact on the world: As we said in the definition, a startup is not about being just a business, it is meant to solve a problem. A startup has the potential to change the world, or at least have a huge positive impact on the world. That is how some of the biggest startup owners in the world, including Elon Musk, look at it.
- One that has happy customers: Like any other company, startups also need to satisfy their customer base with their product. This is so important not only because it contributes to making the most profit, but also it promotes the impact it set out to create. This is also essential for the business to grow.
- One that has the most value in the market: A successful startup is definitely about gaining profits, but the idea of profit in it differs from other businesses. In a lot of cases, startups grow to a certain price point and sell a part of the entire share of theirs to a larger corporation after they have been in the business for a while. These bigger corporations can use the company under the brand name itself, or simply use an idea the owners used to start the company and use it to enhance their own business under their own brand name. A startup would be called successful only if its valuation is high enough in the share market. That is to say, even if a larger corporation buys its shares, it has to keep the brand name because of the high impact it has already created, for example, Flipkart. On the other hand, in case the company does not cash out, its success will be determined on its net worth in the market, that is, how high a price value its shares held in the stock market, for example, Amazon, Facebook, etc.
- One that gives you freedom: This is also where startups differ from a traditional business. As mentioned earlier, startups are disparate because they are independent of any large corporation – this means freedom for the owners. May it be freedom of working from any location, freedom of choosing to work on their terms at their own time, or freedom to use company finances the way they want. A lot of startup owners also consider the liberty of spending time with their loved ones at their own time and pace a big part of success in their startups. This only comes after the business has paid off its investors and started seeing a profit of its own so that the owners are practically their own bosses.
- One whose growth doesn’t stop: Finally, a startup is all about its growth. When it stops growing, it stops being successful. It may still be a profitable business, but it will not be a successful “startup”. Like freedom, this constant growth too can be defined in a lot of ways – a growth in the ROI, growing number of followers, active users, and/or customers, personal growth, growing amount of investment, or growing market valuation. In order to keep growing, it also needs to consistently adapt according to the change in the market, generation mentality, and other circumstances. Its success will depend on as well as be defined by how well it can evolve.
Now that you understand which startups we would call “successful”, let us focus ourselves on some of the blockchain startups that have seen such success in the past 2 years.
Blockchangers is a blockchain startup originated in Norway, which helps other industries take advantage of the power of blockchain technology. The team of Blockchangers work to promote the blockchain technology and cooperates with private and public institutions to help them build a future by using the technology. Customers can contact them to have the best design for their own industry and build a dApp for themselves. They also provide advisory, lectures and workshops as well as development services to big clients from various industries like banking, data analysis etc. They organize Northern Europe’s biggest blockchain conferences. The company has jumped to six million NOK in valuation in 2018, from one million just a year before.
BurstIQ, Inc. is a health-focused software application from the US, which uses blockchain to connect businesses and people in the medical industry on an enterprise level. The company offers a HIPAA- and GDPR-compliant platform that utilises blockchain, advanced security, Big Data, and machine intelligence to enable a global health data network through which businesses and individuals in healthcare can access, control, and gain insights from their health data; along with monetizing the data. They are also seamlessly working towards minimizing the security risks in the healthcare industry with the applications of mobile security, cloud security, policy and compliance, threat assessments, and digital forensics. Winner of the prestigious Red Herring award is 2018, the startup has built such a huge reputation for themselves in the medical industry that they have secured $5.5 million in terms of investment in just between 2018 and 2019.
Veridium Labs is a Canada-based environmental blockchain company which has teamed up with IBM to make businesses more sustainable by helping them reduce their carbon emissions. The system uses Stellar blockchain to turn carbon offsets of industries into tokenized assets, freely tradeable in the international markets. It also calculates the number of carbon credits that a company needs to buy or generate in order to produce enough carbon offsetting for eventually eliminating its carbon footprint.
Tokenizing carbon credits has made the accounting as well as the trading process of them much simpler for all industries which produce carbon dioxide and other greenhouse gases and require a reduction in so. This way, the startup has created such a massive impact that they have accumulated a total of $5 million from various high profile venture capital firms in 2018 and has secured its name in Forbes’s list of promising startups of 2019.
Blockchain Australia solutions offer a wide range of services. They help a company develop Initial Coin Offering (ICO) with exact specifications from the company; and help market and validate their token development as well. They also specialize in formulating highly secure cryptocurrency wallets, developing Proofs-of-Concept (POC) that provide a solid outline of a project’s feasibility, and drawing up smart contracts. On top of it, they have consulting services to provide engaging and comprehensive information at any level of understanding with industry professionals, at any time.
In just a few years, the company has turned into an industry leader in blockchain technology, developing optimized solutions for all its clients.
Founded in 2016, India-based Primechain Technologies has set a path to revolutionising every industry by incorporating blockchain in them. Primechain has collaborated with 27 banks from India and the Middle East and is developing a blockchain-powered technology platform for authentication, verification and storage of electronic records – changing the bank industry forever. The platform also provides a supreme level of security to its clients by using Microsoft Azure APIs for machine learning-based fraud detection systems and real-time anti-money laundering checks.
Although we have mentioned only a few companies here, the list does not end here. Blockchain is a booming technology at this point and every day there are millions of people coming up with another idea which can change the world. Because of the decentralized nature of blockchain technology, it automatically gains leverage in the business world. So when the pandemic of Covid-19 dials down, companies are back in business, and the economy starts shooting up; we hope to see more blockchain-based companies thrive and build even more radical a world for us.