Application of blockchain technology was initially limited to crypto but it has evolved slowly but surely and today it is considered as a programmable chain that can be tailored depending on its wide range of use cases.
Today, it has proved itself to be one of the most prominent and revolutionary interventions of the world which has gone digital in almost every aspect, especially in finance.
This innovative technology has made its presence felt in different sectors of business with its diverse applications.
As a result, blockchain has created an ecosystem of its own which is highly functional and useful.
It is growing exponentially and in recent years its growth has been significant.
It is therefore necessary to understand this ecosystem and the ways in which this new, innovative technology can be collaborated to make the ecosystem even better and more valuable.
This article will let you uncover the value this technology delivers and understand the significance of this ecosystem today and in the years to come in the best way possible.
With the types, components and recommendations to build an effective collaboration all discussed and explained, this article will make your knowledge about the blockchain ecosystem more comprehensive.
What is Blockchain Ecosystem and Its Collaboration?
Ideally, when you discuss the blockchain ecosystem, mainly the topic would surround the primary purpose of it which largely revolves around its collaboration.
This means that when a company proves its ability in using blockchain solutions to deliver unique value to the business, it should look forward.
The next possible step to take is focusing on scaling the solution and utilizing it across several partners within the supply chain.
This will enable the business to take the advantage of the cross-platform workflow that most of the blockchain projects allow.
Therefore, one of the crucial factors for success of any business related to blockchain is its collaboration.
This will help significantly in sharing relevant and crucial information among the several participants and defining diverse approaches provided the operations and governance is in accordance.
If there is a lack of planning or emphasis on the blockchain ecosystem, there can be significant setbacks caused to the blockchain projects.
As a consequence, only a small part of the blockchain projects will move into the production stages in reality.
Therefore, the need of the hour is to foster integration or collaboration of the blockchain ecosystem all through the peripheries of an enterprise.
This will enable the enterprise to deliver goods and services that they could not deliver before.
They would be able to look over and above the customary prospects with blockchain technology and overcome the dynamic limitations inherent with a particular blockchain network.
Ideally, it is high time people thought about blockchain beyond crypto though it elicits thoughts about it inevitably.
This new, disruptive technology comes with several opportunities that are untapped but which can significantly reshape several industries.
However, success with blockchain technology will not come easily.
You will need promising and innovative ideas from visionaries and tech experts possessing the desired skills to translate those ideas into reality.
This will help you to use the automated workflows across enterprises in the best possible way.
This is where you will need to know the definition of the blockchain ecosystem. It basically indicates a collection of elements.
These elements have the ability to interact with each other as well as with the surrounding world.
This creates a setting that has all the desired and useful features.
Alternatively, a blockchain ecosystem can be defined as a specific type of governance structure that is agreed upon for a particular use case.
This governance structure is created on the basis of several different elements such as:
- The suitable behavior of the partners
- Data ownership
- Conditions of sharing information among the partners and
- The criteria for entrance and exit.
Therefore, a blockchain-enabled digital ecosystem can be considered as a value network.
This will allow the enterprises to exploit the digital technology and data decentralization methods in the best possible way for their benefits.
Such ecosystem will help the enterprises to leverage the exclusive and exceptional potential of blockchain which includes and is not limited to:
- Providing self-sovereignty of data
- Offering data that is tamper resistant
- Allowing distributed governance and
- Promoting P2P data collaboration.
With these benefits offered by blockchain, you will be able to enjoy the benefits offered by the distributed ledger which includes and, once again, is not limited to:
- Audit trail and lots more.
However, just like any new technology, blockchain technology too comes with a few concerns when you intend to collaborate it with the operations of a modern enterprise. In this case, a few of the significant concerns include:
- Selection of the right information for the network
- Data management and
- Identity of the authors sharing the info to the chain.
All of these problems indicate that without a relevant and proper planning for management of the shared information, success in a blockchain project is really hard to come by.
Remember, a blockchain ecosystem can be a complex scenario and hard to manage if you do not know the different facets of it.
There are ideally four primary aspects of this ecosystem that you should know about such as:
- Governing organization which refers to the group that sets different operational and management policies and also ensures that the business vision and economics are followed by developing the ability of the whole ecosystem
- Ecosystem operations which typically involves two main areas such as technical roadmaps and the ongoing development as well as evergreen operational support
- Membership, which refers to the operational environment of the blockchain ecosystem and involves the roles of the participants and the observers in exchanging value and information within the ecosystem and
- Blockchain platform which refers to the underlying infrastructure and its necessary dependencies on the different means deployed that include on-premises, cloud, MSP, hybrid, and more.
When you understand these aspects you will be able to make your plans accordingly.
This will help you to segregate the duties, setting policies for the governing board, and have better supervision on the technical roadmap and work accordingly.
This will ensure safe deployment and proper handling of daily support issues.
Typically, the blockchain-enabled digital ecosystems will have a direct impact on the inefficiencies of an enterprise or a supply chain. It will rectify them for the better by making use of the available data.
No doubt there are nearly 100 blockchain-enabled ecosystems found in different industries in different forms.
You can use one or the other in the same way or in a slightly different way as it is currently used in different industries such as insurance, aviation, pharmaceutical, and more.
And, all these times you thought blockchain technology is all about crypto!
Depending on the shared goals and the actors involved in transferring value across the chain efficiently, a blockchain ecosystem can be classified into different groups.
This classification is also made on the basis of the objective and processes of the business and the relationships of the alliance.
Here are some of the most significant types of collaboration models used in a blockchain ecosystem.
This is the name given to an ecosystem that involves a single-party blockchain project. However, this may have cross-enterprise workflows.
Usually, such types of ecosystems may involve different stakeholders in the industry and the primary focus of it is on enhancing the traceability of different players within the ecosystem.
These players may vary according to the type of the blockchain network but usually includes the suppliers, transportation personnel, packagers, retailers, and distributors.
All these participants enter all relevant information and this is available to the customers by using a specific QR code.
As a result, this improves the confidence and builds trust among the consumers about the product or service.
Consortia or Joint Venture Ecosystems:
These are those ecosystems that are just opposite to the above. There are multiple participants in the joint venture or consortium ecosystems.
It can be formed by two or more business organizations or even governments that want to gain control.
These types of ecosystems have taken the upper hand over the traditional joint ventures as you are acquainted with.
However, there is one specific aspect to consider if you want to follow this model of collaboration.
The participants should decide the way in which they would want to operate, whether it will be as a separate legal entity but controlled by the same organization or simply want to execute the contracts according to the legal agreement.
This decision is made based on a few important factors such as financial requirements, tax implications, and regulatory measures.
Regulatory Blockchain Ecosystems:
This is another major model of the blockchain ecosystem that focuses mainly on the shared projects of the government agencies. Actually, these agencies have to self-report for conformity or compliance.
Ideally, there are two parties involved in this particular type of blockchain ecosystem who work primarily to leverage the blockchain-based tools to collect the necessary data and address all regulatory and compliance requirements.
All of the actors involved in these different types of blockchain ecosystems have different perspectives when it comes to accomplishing the desired objectives.
They may also follow different business models based on the type of contributions made to the blockchain ecosystem.
Though everyone participating in the ecosystem is responsible for the value the business receives, a few of these participants may be competing with each other, and that is not surprising.
The ultimate outcome of such participation depends on the effectiveness of the participants and the specific model selected for the shared blockchain project.
And, since the blockchain ecosystem ideas are ever emerging, it helps the initial models to get transformed into other effective models.
While choosing a specific blockchain ecosystem model, companies need to consider a few important factors such as the funding requirements and source.
Remember, funding a business model and funding a blockchain ecosystem model are two completely different spectrums.
On the other hand, for blockchain ecosystem funding, the company has to consider the direct cost related to connecting and delivering the individual responsibilities to the ecosystem.
In addition to that, they should also consider the costs related to governance and operation along with the source of these funds.
The components of the blockchain ecosystem generally depend on the different models of collaboration.
It will also depend on the different participants in the ecosystem since each of them has a different role to play in the ecosystem.
Lastly, it will also depend on the type of contributions required by the blockchain ecosystem with regards to the data and resources.
Here are a few of the most significant components of a blockchain ecosystem along with their respective roles that you will need to have.
- Leaders – A leader is the business that visualizes the blockchain ecosystem as well as the value of the business that it will affect. In a blockchain ecosystem, leaders are actually the architects of the blockchain project and the principal beneficiaries of the job done by the ecosystem.
- Core group – This notable component of the blockchain ecosystem represents the active group of the ecosystem. They are the most important organizations who are responsible for streamlining, controlling, and optimizing the operation of the participants within the ecosystem. They are also the ones who are actively engaged in the management of the blockchain ecosystem.
- Active participants – The active participants are the primary participants on the blockchain network. They are actually the contributors of data and are primarily responsible for the workflow governance.
- Users – The users in a blockchain ecosystem are those participants who usually do not have any responsibilities towards the network but receive benefits from it. However, they have the ability to access their own data but do not take part in any active management process.
- Third party service providers – They are the final component of a blockchain ecosystem. They offer different types of service to the network which includes and are not limited to infrastructure and IT support as well as application support and usually charge a fee for offering such services.
It is very important to know and identify the components of the blockchain ecosystem along with the methods in which the participants interact with each other.
This is very important for scheduling development of the blockchain ecosystem.
It is also very important for you to understand that some of the participants may take on the responsibilities of multiple components in the ecosystem but that would usually depend on the particular use cases.
Typically, the value of the blockchain ecosystem depends on the dynamics and incentives of it. Therefore, if you want to understand its value, you will need to understand these first.
Blockchain typically relies on Distributed Ledger Technology of DLT which is a technology that facilitates collaboration across multiple enterprises with the help of decentralization.
As the end result, this raises the possibilities and makes the process of data sharing much more astounding and exciting.
It will enhance the functionalities of the participants on the blockchain, the employees of the organization as well as the customers.
As for the organization on the whole, it will result in newer and better workflows and allow the businesses to take new approaches for much better planning for the development of the blockchain projects.
When these organizations can identify the best use cases for the blockchain, it will make the existing solutions perform in a much better and more efficient manner.
Usually, all blockchain functions follow P2P communications by leveraging shared or distributed ledgers.
This ensures a better, proper, and faster exchange of information and business process management.
At the same time, through the ecosystem on the whole adequate support will be provided for such collaborations and for that independence will not be compromised.
In addition to that, blockchain will also help you to automate the business processes and also ensure that the participants on the blockchain ecosystem have selective availability of information.
This way, visibility is delivered by the blockchain but the type of information one can share will be in the control of the organization along with the identity of the person with whom that specific information is to be shared.
All these will define and enhance the value of the blockchain as well as the business on the whole. And, when more buyers and sellers participate in the ecosystem, it will be more valuable.
However, you should think about the solutions from the perspective of a stakeholder of the ecosystem.
This will ensure that you deploy these solutions on the blockchain responsibly considering the benefits of transparency and trust that the stakeholders within as well as outside the organization can take.
Building an Improved Collaboration
When you build collaboration with your existing or new-found blockchain ecosystem, you will need to make sure that it is efficient and productive.
There are different ways to improve the collaboration to make the most out of the opportunities available at different points in the blockchain ecosystem.
First of all, make sure that it is a closed ecosystem in which the participants are involved. This will ensure better sharing of data and information.
You may also choose the other available option of industry-wide consortia. This will improve the visibility within the blockchain.
Also, you should make sure that the governance approaches are different and are planned well according to the requirements of the blockchain so that it improves the collaboration.
Ensure that there are additional buyers and sellers participating in the ecosystem because that will have a significant effect on the functionality and the value of the blockchain.
And, always start small to gain a footing and then gradually expand your collaboration to get the maximum benefit out of it.
This is the key to success. You may experience terrible setbacks when you start with a massive ecosystem right at the outset. This will limit your chances for success.
Also, make sure that the leaders in the blockchain ecosystem for collaboration follow a clearly defined governance and workflow.
This will not only ensure proper functioning but will also guarantee faster benefits and future improvement of the ecosystem.
There are several standards followed for governance of the blockchain ecosystems internationally but you should focus on only three of them for your business right now.
These are the generic standards, the industry-specific standards, and the blockchain-specific standards.
While choosing the governance standards make sure that it can bring the stakeholders from diverse levels together on one platform.
It is expected that all the participants on the blockchain ecosystem work for the common aim of its standardization.
Therefore, such collaboration along with an apt governance standard will address the needs of interoperability, scalability, and adoption.
At this point it is important to take note that network governance and operations should change according to the growing needs of the participants when the network matures.
There are several comprehensive ecosystem models for improving collaboration on blockchain ecosystems such as the MVE or Minimum Viable Ecosystem model and the prime tenant model to name just a couple.
You can choose one according to your need for ecosystem management.
Interestingly, most of these models give emphasis to starting on a small scale during the initial stages in order to improve control on the blockchain ecosystem gradually.
It is not an easy task to build a blockchain-enabled digital ecosystem.
In fact, bringing the different stakeholders of different companies together is even harder than understanding the blockchain mechanism itself.
You will be better off if you follow one, some, or all of the practical and proven recommendations mentioned below:
- You should first differentiate blockchain for the leaders and your business because there are too many misconceptions and myths surrounding it. You will be better off if you organize an envisioning or educational workshop with the main leaders. This will allow them to know the potential and articulate the entire process to provide the desired results to the business.
- You must also do away with the abstract catchphrases such as decentralization and trust system. These types of words would only articulate your statement but will not give it any real value or convince the leaders to care about your business benefits. Instead, you should emphasize more on the challenges and discuss the ways to overcome them. This will also open new avenues for your business along with lots of opportunities.
- You should also focus on the new forms of data and value exchange as well. However, do not just talk about the B2B relationships that you currently have. Talk about new business models and try to balance your statements and proposals with it. While talking about value, do not just talk about money because value is not about money only. Instead, talk about risks, information, reputation, and other aspects that are not related to money.
- It is okay if you do not have all the ideas or talk about all of them even if you have them at once. It is better to gain trust and confidence from other participants within or outside of your company first.
- Make sure that you have a compelling vision and convey it to the leaders as well. You can substantiate with several use cases that have transformed the journey of other companies similar to yours.
- Create a proper structure and a roadmap to support your vision. Also make sure that you mention about the risks that you anticipate down the road and what you expect your current and future participants to do in such situations.
- Also, create a proper business model and make sure that you know the way to motivate others to appreciate and follow it. You should not expect that every participant will have the same motivation as yours. Talk about the economics, legal considerations, and the operating model to leverage your and their motivation.
- Do not follow or ask anyone to follow any low-value quick hits that may not have any relevance with your business model. Remember, sacrificing relevance can prove to be a big mistake because there will be no clear understanding of data movement and how it may integrate with the end-to-end process.
- Finally, be more practical and do not rely blindly on the Proofs of Concept or PoC approach to show the authenticity of the blockchain technology. Everyone knows about it already. You should come out of the PoC stage but represent the production environment instead.
It is true that a blockchain ecosystem may prove to be a powerful inclusion to the digital arsenal of your company but you will need to create and follow a well-planned business strategy.
You will also need to know how and when you should apply these technical competences to your business to deliver the desired results.
One final tip: Just make sure you find out the feasibility of the ecosystem model you want to choose based on the requirements and use cases.
And, there is no alternative to extensive research and learning for that matter.
The significance of a blockchain ecosystem now is immense. Several industries have been successful using it in a collaborative approach. Now that you know the value of such collaboration reading this article, empower your business with it.