Ask HN: How do blockchain companies/developers make money? | Hacker News Reader

Ask HN: How do blockchain companies/developers make money?

12 pointswenbin6 comments

If blockchain is decentralized, then companies / developers can't act as middlemen to take a cut of transactions.

Is ICO or "holding coins" the only way for blockchain developers to make money? How do they have cash flow? Seems to me this is like the compensation package of Facebook/Google/whatever employees includes only stocks but not base salary :)

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We've got a number of blockchain developers in our team and rent out their time to interested parties, so we see a number of these options come up.

There are a few different business models possible:

* When ICOs are issued, tokens are sold in exchange for other currency (typically BTC, ETH, or fiat currency like USD). The reason is to have more-established forms of money available to pay developers working on the technology, so this means you can actually pay people conventional cash (in the short term).

* In the long term, most protocol developers monetize via software built on top of the underlying technology or powering the underlying technology. BlockCypher is one example (https://www.blockcypher.com/) You can offer pro versions if folks run them internally for a fee.

* It's also common to offer consulting/human services related to technology you developed. (https://gem.co/ is a good example)

* Decentralized protocols don't mean you can't take a cut of transactions – they mean everyone has a chance to take a cut of transactions! Most blockchains call these "miners" and open it up to everyone, but the initial protocol developer may also set up/offer a pool to take advantage of this process. This happens quite often with industrial/commercial blockchain used by larger industry groups.

* More generally, technology running on open protocols can be centralized/proprietary even if the underlying tech is open – the same rules apply. TCP/IP and HTTP are open and decentralized, but we have plenty of money-making businesses here on the web!

1) Create smart contract with some use case. For example a secure Chat message system 2) Make the register function of your smart contract (solidity in this case) payable. Meaning that the user can register with his public/private key pair only when he's sending eth with the transaction. 3) make his pair valid for example 1 month to enable some kind of subscription.

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Thats only one idea, another would be make the smart contract and charge for your android/ios app accessing the data in the blockchain. In the second scenario users could bypass the pay wall by using the contract directly, but most wouldn't want to bother with that.

A company that develops a blockchain-based product/service is not necessarily an ICO company officially for administrative and legal reasons. For example, in the USA, company A can release a product B via ICO. The product has an ICO structure, but company A is legally a "corporation" with shareholders, doing business as usual. Looking at the issue that way, developers will receive their shares/options as it has been done in the past. Hope this makes sense.

Note: This is definitely not the only way companies are structured.

Okay, so they still make money through traditional centralized things. They do blockchain just like they are doing open source software, where they can't earn cash flow.

They attach "blockchain" to the name of their company :)

If by "money" you mean Fiat USD, then they have to convince someone to swap their tokens for Fiat.

I imagine a lot of blockchain devs got rich off bitcoin so don't need to be paid anytime soon. They can hodl their new tokens for a while to see if they'll get rich. Again.

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