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Why Established Players Need to Come in the Blockchain Market Now

Why Established Players Need to Come in the Blockchain Market Now

The technology landscape is littered with the names of companies like MySpace and Yahoo that failed to take advantage of their market leadership position when upstarts broke through with a fresh idea. Typically hampered by their size and their unwillingness to disrupt their own models to challenge for business, incumbent players delay innovation as their market share gets leisurely eaten away by fresh companies.

We see blockchain and decentralized services as ripe for entry by established companies, assuming they have the readiness to embrace the decentralized model. However, sitting back and letting the youthfull companies make inroads into blockchain won’t work. The Blockchain is no longer a niche play for puny companies: It’s a mainstream play that established players shouldn’t overlook.

Here’s how we see the evolution of blockchain and the growth of decentralized services. At the birth of blockchain, the players were unspoiled crypto-tech startups (for example, Zcash, Coinbase, and BitPay), and you had to be a true blockchain geek to understand a company’s value. As blockchain grew, investors embarked to pay attention — ICOs (initial coin offerings) popped up with more frequency, such as computing infrastructure (Golem), ad platforms (BAT), and predictive markets (Gnosis), based on decentralized systems.

Today the blockchain market is maturing. The time is ripe for established companies to benefit from decentralized systems, specifically more opportunities for all participants to reap value (e.g., users, employees, shareholders, and developers) and growth of the market. These companies can bring to the table established sales channels, a deep understanding of market mechanisms, large customer bases, and economies of scale.

Larger companies’ advantages can give them the edge against startups, even established newcomers. To date, companies like Steem and Gnosis haven’t gained much traction in the market, even tho’ they’ve attempted to stake out a first-mover advantage. Decentralized networks need critical mass to be successful. If you’re one of only a few people in a predictive market website or a social network application, then you can’t engage in many interesting conversations (or find anyone to gamble with). The platform may be awesome, but without scale, fresh companies can’t attract users.

Kin and Kik are embracing the paradigm shift that blockchain and decentralized networks permit. Kik’s origin is in talk, but with the introduction of the Kin cryptocurrency, Kik is creating an ecosystem that’s open and sustainable and builds on Kik’s strengths in the talk space. With millions of monthly active users, Kik has the scale that many companies in the blockchain market lack. The decentralized network on which Kin is based also offers a sustainable way to build revenue, in a way that welcomes a community of fresh developers, investors, and consumers.

Kin’s purpose to connect a communications platform to a fresh cryptocurrency isn’t about going to war with the companies that staked out the blockchain market very first. It’s about creating a space where everyone can contest, and where control and compensation isn’t limited to a few forearms. This isn’t a quick transformation and will take time to implement. Companies need to be open to switch, willing to disrupt their own lines of business and willing to adopt an open-source model. But companies that fall under this shift will be rewarded with more chance for growth within a far larger market.

Uriel Peled is head of operations at CoinTree, a blockchain advisory rock hard based in Tel Aviv, Israel. He is also a lead advisor to Kik on the Kin project. Prior to CoinTree, he was co-founder and CPO at Visualead, an Israeli O2O and IoT startup with investors such as Alibaba.

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