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.

Monetizing Connectivity

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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If I understand correctly, this relies on the assumption that transactions have uneven distribution among miners.
Given that assumption, the miners might be willing to pay or share their revenue with the transaction generators, but I think this scheme has some issues that needs to be resolved:
Propagation of a block with a large size is full-cost if the miner don't pre-share the data (transactions) beforehand, and it creates the well-known orphan race-condition. In the current setting with anonymous decentralized transaction validators (miners) - the incentive is to propagate as much of the mempool as possible before finding the difficulty solution as that gives the best security guarantees as for their block orphan status.
While a centralized miner coalision can easily solve this problem by agreeing to mine headers-first, doing so in a decentralized fashion is significantly more difficult.
Given these constraints I think a more reasonable solution is use multisig/payment channels where the app/service injects itself in the payment stream - and only accepts transactions that pays it - as valid transaction for their service.
If the service is valuable and the cost of participating is that users application has to divide the miner costs across the service and the miner at the transction level (or the entire service providers supplychain), then the question of payment becomes a question of simply being a valuable service in the first place.
   4mo ago
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@Jonathan Silverblood
Yes, uneven distribution is in my opinion already a reality. I don’t believe propagation would be much of an issue considering the scaling roadmap. Also the 103 mb block we witnessed recently have shown that it already can be done in the current configuration. Most transaction didn’t originate from the mempool, thus uneven distribution. Far from perfect yet, they got orphaned twice, but still. Also as miners are incentivized to prevent orphans, I am taking the liberty to assume they will find a way.
In my understanding the Mempool was introduced in 2012 (BIP35) to make the network node's transaction memory pool accessible to all other miners. I imagine this access could also be restricted or granted to only a few selected miners willing to pay. I also imagine some sort of automated auction scheme could eventually be introduced between major connected miners.
But I do agree, charging micro fees would be much simpler. But this is not viable for all. Some services need to be ultra-cheap to create lift off. Would Facebook have become such a large company if it would cost even as little as €0,10 a month? I guess not.
   4mo ago