5 Ways on How Blockchain Companies Make Money?
Have you ever wondered how Blockchain companies make money?
They earn by exploring a list of revenue streams. They can explore one stream, two, or more simultaneously.
Since 2008, many Blockchain companies have hit the market. Through the same time span, there’s a disappearance of many. Yet some genuine ones still brave the rapidly shifting investments.
Statistics show that over 400 companies made it to quarter 1 of 2022.
This article will channel efforts to show how Blockchain companies make money. We’ll share 5 key avenues that fill into revenue streams for the sector.
Ready? Let’s dive in.
Sure, here are the revenue streams that sustain Blockchain companies:
Blockchain Companies Make Money from Developing Custom Solutions
Blockchain platforms generate revenue from making customized solutions for users.
Being a relatively new sector, professional Blockchain developers are in great demand. Two key coding languages for Blockchain developers are Solidity and Java, among others.
So, Blockchain firms with high-skill professionals with years of experience lead in developing Blockchain platforms. It does not end there — after roll-out, they must carry out significant audits, security and maintenance tasks.
Developers of smart contracts and Web 3.0 form part of the emerging career shift with Blockchain tech.
Firms that position correctly stand chances to secure lucrative contracts as Blockchain solutions become platforms’ main technologies.
Blockchain development is challenging — especially whenever the objective is to roll out new platforms.
In light of the above, developers from any Blockchain company need enthusiasm and experience to deliver.
How much does it cost to hire a Blockchain dev?
According to Glassdoor records, the salary payable to a high-end expert Blockchain developer is not less than $90,000 per year.
Ideally, developers can come together and bid for any opportunities arising and earn income by providing services as custom solutions providers.
Blockchain Companies Make Money by Running SaaS Platforms
One key avenue that Blockchain firms make money from is running SaaS or Software as a Service. And this gets the favour from the increasing adoption among users.
Blockchain SaaS is a major shift from the initial set -ups. Originally, users perceived them as the backbones of cryptocurrencies. Yet, a decade-plus down the line, Blockchains are running across many business support functions.
Specifically, running Blockchains as a service is gaining traction as BaaS. They include and are not limited to supply chains, asset management and data protection.
Here’s a list of projects that are exploring Baas:
- Dragonchain — with a project purpose of protecting business data and critical assets.
Dragonchain relies on cloud technology which facilitates other features like smart contracts and smart wallets.
- Iveniam — aiming at reducing system audits by securing key documentation and procedures.
Iveniam is built on a Factom Protocol — which relies on verifications and encryptions.
- Symbiont — a custom ledger for Fintech firms and banks.
It helps track loans and mortgages with real-time verifications of data and values across firms dealing in private equities and crowd-funders.
Blockchain Companies Make Money from Transaction Fees
Agreed, banks charge customers a service fee. Blockchain firms are, in a huge way, similar to banks.
For every transaction, you pay gas fees to the platform. For Bitcoin, you pay the miners who verify the transactions.
For exchanging one cryptocurrency for another, you part with a small percentage for each transaction.
So, Blockchain exchanges: Binance, and Coinbase, among others, earn when you make transactions on the platform.
Over the past decade, several approaches have changed with respect to transaction fees.
For instance, Binance will charge nil for BTC pairs. Yet, charge as high as 25% for BUSD pairs. Plus, it depends on user needs. Other than buying crypto, other needs are on the rise — like DeFi Staking.
Everything else held constant, high trading volumes favour the earning capacity of Blockchain firms or exchanges.
Blockchain Companies Make Money from Service-Level Agreements
SLAs or Service Level Agreements are another avenue for Blockchain firms to earn income.
Ideally, SLAs are binding agreements that hold parties accountable. The service providers offer services relative to Blockchain user needs.
The services could be cloud infrastructure for hosting. Platform designs or development of code or programs.
SLAs offer a relatively cheaper way to bring Blockchain business ideas into live products and services within the Blockchain niche.
So, well-established firms like Microsoft, Alibaba and Amazon have in place arrangements for SLAs. It’s a viable model to generate revenue with idle resources by optimizing their availability to users in need.
Blockchain Companies Make Money by Speculating on Cryptocurrencies
Blockchain firms make money by speculating on the rise and fall of the values of cryptocurrencies.
Speculation carries huge risks. But professionals carry out adequate market analysis before making any commitments.
One big risk arises with volatility — where prices fluctuate in an unpredictable fashion.
Blockchain companies rely on professionals to analyze and manage positions for them.
Generally, they risk small bits of capital for long time frames. It’s hugely rewarding when markets move in their favour.
Behind the curtains, speculating professionals require good mastery of trading. Other than experience, they require fundamental and technical analysis skills. Additionally, the best speculators are great at gauging market sentiment.
In recent times, trading is taking newer heights with access to algorithms. And this brings technology in the form of artificial intelligence and machine learning into the picture.
Trading bots are taking centre stage in trading cryptocurrencies. When explored well, Blockchain firms can earn good incomes.
Additionally, trading bots or online robots are gaining in popularity.
Bots are able to crawl, analyze and open positions arising from arbitrage opportunities. Arbitrage opportunities arise when market platforms trade the same asset at different prices.
Finalizing Thoughts on How Blockchain Companies Make Money
There you go.
We’ve seen the five key pillars that form revenue streams for Blockchain companies.
Tech has always been disruptive. As the simmering of Blockchain apps takes place, more shifts are in the blink of happening.
What will the Blockchain world look like after the second decade? The Web 3.0, the Metaverse. Let’s wait and see.
Or, in the meantime, you may learn a skill to help you earn as a Blockchain entrepreneur or developer.
