SV Business models for a hyperbitcoinized world.
We have seen a week in which a lot of helpful tools have been released for anyone to build cool applications on SV. So let’s build. But the thing is that I still see a lot of developers struggle to figure out how to make a valuable business out of any bitcoin application.
As an example, how can creating a bitcoin wallet become a profitable enterprise? If you charge for the application or for each transaction people just go elsewhere and use free wallets instead. Include adds? Please no, this is what we are going away from. So what is it? Lack of ideas about how to generate revenue or how to create a valuable business (this is not the same) prevents developers to dedicate their valuable time on bitcoin or to pursue creating businesses on bitcoin.
Current business models
There aren’t much clear business models to copy yet. Ryan form Moneybutton said it will make money using moneybutton. In other words, they are planning to build services and apps themselves that would require moneybutton and create revenue form such services. For this to work, they would need to create a large enough ecosystem of users that use moneybutton to earn and spend. This is why they offer their service for free. Because it helps them build the ecosystem they need. I haven’t seen the handcash guys be very explicit about their business model but as far as I can tell they tend to build a similar ecosystem in combination with Keyport (edit - Cashport). My guess is that they have no real plans in building other apps but I imagine they intent to provide additional services within and around their wallet that could help them earn. Both seem to have a long term strategy.
What are other potential business models?
We have a long way to go before miners can earn enough on mining fee’s for them to be profitable without block rewards. But in the hyperbitcoinzed world, if we get there, I imagine that mining fees would be more than plentiful. Plentiful enough to optimize competitiveness. If you can imagine you could build a app on SV that can become as popular as Snapchat, WhatsApp etc. All those transactions your platform would generate have much value, even if you don’t charge for your app or the service itself. And no, you don’t have to resort to adds. Calculations for both scenarios are completely arbitrary, but it could help you make your own estimations.
TX Batch auction
What if your free apps generate a high transaction volume and you could auction your TX Batches to miners. Let’s say you create 10.000 TX’s on average per block. Each transaction has 0,5 euro cent in miner fees than this TX batch would be worth €50,- to a miner. What if you could action this batch to miners, and let’s say you’ll earn somewhat of 10% worth of the miner fees. You could make €5,- a block. An average of 6 blocks an hour makes 144 blocks a day times €50,- = €720,- a day. I’ll bet you could make viable business cases with a €720,- daily revenue. This is €262.800 a year. Well, I guess most of us could make a viable business with even less revenue.
What if your free apps generate a high transaction volume and you could monetize connectivity to service. Let’s say you enable 1.000.000 TX’s daily. Each transaction has 0,5 euro cent in miner fees than this TX load would be worth €5000,- to a miner a day. You could sell “premium connectivity” to your service to miners for them to have an edge over other miners and not to lose out on potential revenue. I’ll bet miners wouldn’t mind paying some fee for “premium connectivity” for them to have a better chance to earn those mining fees.
In my previous article I described a potential alternative way for miners to compete and have a alternative revenu stream. https://www.yours.org/content/miner-competition--the-commodity-ledger-and-the-fee-market-f58edcae150d I hope my ideas would help business developers, software developers and investors to see the bright light at the end of the tunnel. There is a long term profit to be made after the bear market if you start today and claim your share of the market. Now is the time.
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