How come there are so many blockchain-based projects with a working product, but nobody is actively using any of them? Even if looking at the active users, this number is so small that it barely counts compared to the software from the top IT companies like Facebook, Google, or PayPal. Yet, are we doing the right thing when comparing them directly?
There are many blockchain-based companies out there that can boast some pretty impressive statistics, like NEXXO issuing more than 380.000 bank cards, Steemit scoring 1 million users, and the Brave browser surpassing 3 million monthly active users. But they are serving millions while others are serving billions: Facebook has 2.27 billion monthly active users and Google Chrome has over 1 billion users. Can we simply overlook the decentralized counterparts serving a few million users just because the norm today is having billions of active users or else you’ve “failed” as an online business?
What determines the success of a blockchain product?
There are three factors to consider before assessing any of the blockchain projects with working and active products:
- The stage of the company
- In which regions their product is currently available
- The type of project
We can’t make a direct comparison between companies that have been here for more than a decade (Facebook since 2004, Google Chrome since 2008, PayPal since 1998) with companies that have been active for less than half of that time. Indeed, NEXXO has been active since 2014 and Steemit launched in 2016, but most of the other companies haven’t existed before 2017 and yet they have millions of users using their solutions.
Global since day 1?
Not only is it that all these well-known companies launched their products a decade ago, but they weren’t globally available from the beginning either. Mark Zuckerberg launched Facebook as a Harvard sophomore, so only a few thousands were supposed to have access to it. Foursquare, the city guide, included only 100 metro areas. Did you know that Amazon started out in 1998 by selling only books? And they were shipping them only in the UK and Germany. That’s pretty niched.
While Steemit and Brave can address a global audience from the beginning due to their very nature, as anyone can write an article or download the browser, there are companies that can’t gain worldwide availability on day one. NEXXO is offering banking solutions for small businesses. The only way to function legally is to comply with local central bank rules and local data confidentiality laws. In this case, they need to implement particular solutions crafted specifically for each local jurisdiction, which they are already doing. QPay is their company localized in Doha, Qatar, and it’s the fastest growing fintech company in the Middle East. They issued more than 300,000 bank cards for more than 15,000 local businesses. The demand is clear and we should expect the same growth for them in Vietnam, Pakistan, India, and Egypt, which are the next regions to be covered, according to their roadmap. NEXXO won’t stop here, though. They will continue to build from the ground up until they will reach a globally compliant blockchain network, but that takes time. Facebook, PayPal, and Amazon spent a decade spreading their products worldwide. Can you guess where NEXXO and all the other blockchain-related businesses will be in a decade?
Centralized or decentralized?
Another aspect that’s usually left aside is the type of software the new and old companies are developing. In case of a social media network like Facebook or an e-commerce website like Amazon, this is company-owned software. Blockchain projects are usually open source due to the blockchain’s decentralized nature.
Let’s consider a traditional website. The company develops the back-end part responsible for storing and manipulating data along with the front-end part, which the user interacts with directly. They are both hosted and managed by one centralized entity. The blockchain, on the other hand, is powered by all the decentralized nodes within the network. While the project’s team still has to develop the solution, after its launch they’re only hosting the front-end part. The back-end is replaced by the blockchain. Another company can even build an alternative front-end application to access the same blockchain. In the decentralized world, things are not as straightforward as we are used to.
Also, taking into account that traditional software can be patched and updated at anytime, the blockchain once it’s released, not so much. That’s why in the crypto space it is typical for companies to have a testnet, an experimental version of the software, running for months until the official release. When the team considers this version to be stable, they can launch the mainnet, where actual transactions take place on a blockchain. Real money flowing in and out. Is this a working product? In theory, it is. Anyway, experience tells us that many projects launched a partial functional mainnet with a minimal number of features, with still ongoing issues just to get the “working product” badge.
5 blockchain projects showing successful metrics
Based on the following criteria, I handcrafted a list of blockchain projects that:
- Proved significant progress in a short time of existence
- Launched a product that works for a significant number of active users
- Has attracted a significant amount of users in contrast to the regions they are available on, not on a global scale.
Where there’s a problem, there comes a solution. Small businesses need financial services, but large commercial banks still deny them. As a result, there is a highly under-serviced and under-banked market among small business owners across the globe. More specifically, 260 million such businesses!
NEXXO’s solution is not too different from that of a bank. The distinction is made in the technological approach. NEXXO’s platform is powered by the blockchain, allowing them to work with local and central banks in full compliance and offer a complete package of the services that a small business needs without too much hassle. While banks refuse them due to too much risk for too little return, NEXXO welcomed more than 15,000 local businesses in Qatar and they are looking to expand into more regions. Blockchain technology allowed them to come up with a functional product while at the same time leverage an unexplored market.
Steemit is a decentralized social media platform based on cryptocurrency micropayments. The like/upvote/kudos is replaced by a cryptocurrency reward that goes directly to the content creator. No middleman involved.
The Steemit platform surpassed the 1-million-user mark last year and it’s continually growing: new users, more daily active users, a higher number of posts and comments, and even daily transactions. You might think that people are consuming the content without actually paying for it, which is not the case. The rewarding system is one of the most used features of the platform.
It’s the team behind Brave Browser, a functional Internet browser that can actually be considered a good alternative to our current solutions, especially after the rumors that Google is selling user data.
It has more than 3 million active users, making it a widely-used blockchain-based product. Looking into its native features (ad blocking, tracker blocking, a clean interface, faster than other popular browsers, and is available on mobile platforms), it’s clear that Brave’s business model is based on advertising, so it should prove itself before major brands might start investing in it.
4. Binance coin
While Binance coin is not a project, it’s just an exchange token used in the Binance platform, we can’t overlook the amount of people that are using it on a daily basis.
Its utility is simple. Binance, as a cryptocurrency exchange, has trading fees for each buy order, sell order, or withdrawal. By default, the fee is subsidized in the currency used for the particular trade. Anyway, if the user opts to pay the fee in BNB (Binance coin) he or she can enjoy a 50% discount on the spot. While the purpose of BNB is limited, it does its job well and the increasing daily volume of transactions is clear proof of a working blockchain token.
5. Pundi X
It’s a well-known fact that making payments in cryptocurrency adds a risk factor to retailers due to its price volatility. Pundi X’s solution is to convert the payments into local fiat currencies immediately.
There are many parts of their project, but the primary ones are the XPOS (point-of-sale) device and the XPASS cards. It seems that replacing the traditional banking tools with blockchain-powered alternatives made all the difference. 5,500 XPOS devices are already being used in Asia and this is just the beginning. Pundi X aims for 50,000 active units in 2019.
You might be used to quantifying the success of a product based on how many billions of users it has, but there is much more to take into account beyond just one single metric. We’ve looked at only five examples of blockchain-related projects that have a product doing well business-wise. If their hard work continues, regardless of cryptocurrency-price evolution, they can break into the mainstream and perhaps even overtake their traditional competitors.