6 Ways Through Which Blockchain Companies Earn Money
Blockchain technology has been enjoying increased adoption of late. In fact, many people believe that the technology is a signal of an impending revolution. This hype raises questions on whether blockchain-based businesses are making profits from their ventures. And if they earning, how do they make the profits?
The following are the ways through which blockchain platforms make money:
Selling Blockchain Solutions
A majority of blockchain-driven firms develop solutions for specific use cases for their consumers. When the users purchase these solutions, the businesses receive money as compensation for their services. Examples include IBM and Deloitte who are renowned for creating customized blockchain solutions.
Transactions And Subscriptions Fees
A significant number of blockchain companies create enterprise solutions for institutional investors. These institutions use blockchain solutions to improve their service delivery. As expected, the companies have to pay subscription fees to the blockchain developer in exchange for using the developer’s blockchain infrastructure for facilitating transactions and data management.
Software As A Service
Certain companies earn money by allowing users to leverage their blockchain APIs as well as their infrastructure.
Developing Hosting Infrastructure
This involves the signing of Service Level Agreements (SLAs) with client companies to design, develop and host blockchain networks. Due to the massive amount of resources required to construct blockchain architecture, only established companies such as Microsoft make money using this means.
Speculating On The Price Of Digital Currencies
Nearly all blockchain network have their native token. Most of such tokens are often held by the project team and developers. These groups work hard to drive up the value of the token, after which they sell it for profit. Examples of platforms that used this method include Lisk, Factom and ConsenSys.
Another way for blockchain and cryptocurrency companies to get money is through receiving funds. The most popular methods of receiving funds are:
- Conduction Initial Coin Offerings (ICOs) to generate money through token sales.
- Crypto startups may get backing from venture capital firms. Recently, Novogratz and Goldman Sachs granted $15 million to BitGo Funding. Similarly, JP Morgan Chase has invested in several blockchain projects.