Decentralization: how to make money?

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William Mogaiar - &#171;angel investor&#187; from Toronto, &#171;quadruple&#187; entrepreneur whoadvises startup projects on strategy and marketing. In this article, he discusses the points where exactly monetization is laid down in decentralized business models.

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If we are to strictly follow Bitcoin's core principles of decentralization in this discussion, it is worth noting that very little money is held at the “center.”

Bitcoin as a system today isthe quintessence of a decentralized and autonomous ecosystem. Its “central organ” is extremely poor, because it does not exist at all in nature as a phenomenon. All income / profits arise on the most remote parts of the Bitcoin network.

So if we want to correctly reflect the essencecryptocurrencies, we need to follow its decentralized characteristics and properties; not just because it is a matter of principle, but rather because it only works that way.

As it developed, decentralization did notspecific theory, which accurately reflects some kind of thought and has a single polarity. This is not a simple situation with “Yes” or “No”. There are various shades, aromas and degrees of decentralization. This becomes a long-term goal, not a one-night task. I have already described the “ideal” structure for Distributed Autonomous Organizations, and it’s not so easy to create one right away.

Nature Centers

It used to be that nothing happenedwithout the approval of the central authorities or central forces, or central regulators, or central confirmations. When decentralization works, the opposite is true. Everything happens at the edges of the network, and at the nodes in the peripheral area of ​​the shared network.

With decentralization, you do not initiallyestablish central authority. You install a platform that allows the network to flourish, and in such a network a “center” of attention (which is used figuratively) and activity arises inside all nodes and peripheral users.

We should not follow the path of degeneration or compromise with the idea of ​​decentralization, choosing which of its characteristics we will use and which we will set aside.

The model that was brought along with Bitcoin includes:

• Money Transfer / Transaction Rate
• No intermediaries
• Flat organizational structure
• Intranet trust
• Network flexibility in relation to attacks or prohibitions, there is no central “point of destruction”
• Reasonable consensus decisions and changes
• Fluidity from one feast to another

And here the connection between peers is real, i.e. there is no one as an intermediary who will slow down, buffer or simulate P2P.

What will Bitcoin make us do?

Compare Bitcoin to the Internet in terms ofthe opportunities that these platforms provide us. Probably primarily the Internet &#8212; This is an opportunity for anyone to become a public content publisher. Whether you're sharing photos or commenting on a blog post, you're posting something and freely expressing yourself online.

So what is this equivalent (big)a function that Bitcoin will allow us to perform really well? An opportunity to be your own bank? An opportunity to use legal contracts between the parties without the participation of clearing houses as third parties? The ability to earn value and cryptocurrency yourself, in the form of a new type of work?

In the case of decentralization, in order to achieve maximum effect, we will need to see:

• Decentralized distribution of content and exchange networks (possibly originally for digital goods) without central authorities that charge taxes and exercise control.
• Decentralized transportation services based on P2P services, without companies such as Uber, which charge too much in the centers.
• A decentralized data warehouse where you can earn money by providing other people unused computer resources, without companies like Dropbox as intermediaries.
• Decentralized computing, without services such as Amazon Web Services that lead the service.
• Decentralized banking, where we ourselves control the money and make rules according to how we spend it, without asking permission from centralized banks.
• Decentralized gambling, where trust is already invested, and without a physical room, which also can not always be trusted.
• Decentralized exchanges for trading financial instruments or products, without central exchanges.
• A decentralized transfer of rights to names, trademarks, or real estate that is not controlled by central authorities.
• Decentralized public registries for documents like marriage records that exist independently of state registrars.

Not just being decentralized

Apple's iTunes is typicalcentralized market. If it were decentralized, then, firstly, Apple would not take an extortionate 30 percent as a &#171;commission&#187;. Secondly, whether the app's value is derived from sales or other monetization methods, it is shared among users who use or promote the app by sharing their statistics, for example; and Apple doesn't deserve that 30 percent.

Of course, this is a purely hypothetical scenario,which is barely able to be called "raw"; but the grain that can be found in this idea is that value is generated not at the center of the network, but at its edges. Nothing happens without users who add value, so why not redirect (a large) part of this value to circulate back to the network in order to make it even stronger?

Do not just become decentralized. But the task is easier if it becomes part of your own development or if you have been influenced by making you voluntarily move and think in the right direction, or if you created a new organization from the very foundations of a decentralized network, platform, service, currency or market.

Before you call: need to find a scheme when monetization becomes possible in decentralized models. It often happens that a decentralized design is based on two basic components: protocol and market.

The (technical) protocol resembles the operatinga system, and monetizing there is quite difficult, but the market is the place where the network lives, and you need to look for innovative monetization models within the market itself, especially in the case of custom chips and services that project themselves onto this network.

And also we can ask to whom it is transferredcost - to original creators / developers or contributors? It is very possible that the value begins with the users who are the key actors in the decentralization body. If users derive personal benefits, then the network also benefits collectively, which extends to the people who founded the network.

The idea of ​​"central operations" is being destroyed, because perhaps it is completely useless. The core protocol includes decentralized operations, and that is where activity and value should be.

In conclusion, I would like to say that we are stillWe study and experiment with business, profitable and value-driven incentive models in decentralized networks, markets and organizations. One thing is for sure: centers and operators must do less, and user teams / stakeholders / participants will do more.

: CoinDesk