6 Business Models Bitcoin Will Enable for the First Time

Bitcoin is more than just a new way to pay, or a simple store of value. Perhaps most importantly, Bitcoin is a public ledger, and it is this part of the blockchain that many believe represents the true innovative potential of Bitcoin.

In essence, Bitcoin is a new fundamental technology that leverages the internet, cryptography, and the development of relatively less disruptive, older virtual currencies.

Since Bitcoin provides a whole new infrastructure, this means that there will be a ton of businesses that will be built around it or on top of it. Today, you’re probably more familiar with the companies that are built around it, like wallet providers and processors that store Bitcoin and allow you to use it as a payment method.

Still, a portion of the industry is in its early stages, hoping to use blockchain to build new projects and enable entrepreneurs to pursue ideas that didn’t even exist five years ago.

Below are six examples of new business models using blockchain technology.

1. Keep records

Bitcoin's public ledger allows for the preservation of records on the Internet while increasing overall transparency. Previously, there has not been a good way to provide information from a public database to this type of encrypted ledger. Some interesting projects have emerged that explore using blockchain technology to record public information. One example is a paper led by a professor at New York University (NYU) that explores recording digital art ownership on the namecoin blockchain.

Business cases for online public records are already becoming more common. Startup CrowdCurity uses blockchain to help find website vulnerabilities. In addition, developers are exploring simple programmatic ways to access the Bitcoin ledger. In the future, blockchain may be used to help companies automatically record and keep records of general business transactions, not just Bitcoin transactions.

2. Asset Distribution

Today, Bitcoin’s market cap is over $5 billion. While this is still far from its peak, the strong value of the network has given people confidence that Bitcoin has value as a new asset class. This means that people are beginning to see cryptocurrency as an asset.

Overstock is developing a new type of securities exchange using Medici cryptography. The retailer has hired developers from Counterparty to make it happen. Another is Hyperledger, which uses a consensus algorithm to support assets. To enable Hyperledger users to quickly create assets without the need for a secure network like Bitcoin, the company has spent years growing its massive computing power.

These projects may soon face their own regulatory issues, confirming recent rumors that these assets are considered securities. But there are also some interesting technical ideas that explore the decentralization of crypto assets. Decentralization of crypto assets may allow companies to raise funds in a more secure and efficient way, without relying on bankers who charge large fees.

3. Wallet Technology

Users have been able to store Bitcoin in wallets since the first cryptocurrency software clients were launched. However, that doesn’t mean there isn’t innovation in this sector, and companies are creating more advanced electronic wallet technology in the space.

Perhaps the most important emerging technology for wallets today is multi-signature. It is a private key security technology that protects wallet balances by unlocking assets with multiple keys, hence the name "multi-digital signature".

BitGo is a company that specializes in electronic wallet technology, creating advanced multi-sig technology that can be used in large organizations. Similarly, companies like Hive continue to push the limits of wallets, offering things like third-party applications, BIPS32 layered deterministic security, and HTML5 web wallets that are identical products to all user devices.

In the future, wallet technology will allow for greater flexibility in the way funds are handled, creating new types of financial instruments and third-party products that can execute themselves in an untrustworthy manner.

4. Smart Contracts

The concept of smart contracts was first conceived by researcher Nick Szabo in the 1990s. The idea is to implement programmable, self-executing agreements without the need for a third party. The real application of smart contracts has not yet been fully realized, but the emergence of Bitcoin has created momentum for such digital agreements. In order to execute price agreements, Hedgy is building smart contracts on the Bitcoin blockchain. The goal of Hedgy smart contracts is to reduce the risk of Bitcoin price fluctuations. Ripple Labs is using Codius, a fault isolation technology developed by Google for websites, for its smart contract project. BitHalo uses multiple technologies to build a one-to-one smart contract for user convenience.

In the future, smart contracts have the potential to replace traditional paper contracts and provide dynamic agreements that bind technological systems. For example, at a specific date and time, a smart contract can be programmed to launch a specific code.

5. Mining

Bitcoin mining, the process by which computers confirm transactions on the network, can also become a big business, and as mining becomes more powerful, more advanced tools are needed to manage these systems.

The mining industry is seeing consolidation as companies try to minimize the overall costs associated with mining infrastructure. PeerNova is a good example of consolidation efforts. The company is the result of a merger between mining hardware development company HighBitcoin and mining services company Cloudhashing. After the merger, they now work on advanced mining solutions.

Many companies that had not previously been involved in mining saw opportunities, especially exchanges. Bitcoin China is currently the world's largest Bitcoin exchange. It recently opened a mining pool for its own customers. Cryptsy, an exchange that can trade multiple cryptocurrencies, trades mining contracts on one platform.

One of the most interesting things is that future mining applications could provide computing power to solve tough problems, like protein folding, by seeking proof of work solutions.

6.Support Bitcoin payment

These five new and rapidly evolving business models are giving rise to the nascent cryptocurrency economy, an industry that relies on smart entrepreneurs who see the untapped potential of such a wide-ranging technological innovation.

There are also some speculators who cleverly use existing concepts and use cryptocurrency models. Micro-transaction providers that only accept cryptocurrencies, Bitcoin recruitment services, and charities are all playing the role of promoting and promoting the community. They are different from the new business models listed above, but they provide necessary products and services for the industry.

Every day, more and more business ideas are formed around cryptocurrencies, and a stronger community is helping to push the entire industry forward. It is conceivable that more supportive businesses will develop around Bitcoin, just like other industries.

The question now is: As this emerging technology continues to advance, what other great business ideas will emerge in the near future?