Blockchain for Business Majors
When discussing cryptocurrency, I generally start with bitcoin: a worldwide distributed computer network that allows for both the transfer of value as well as the storage of it. Variations on that work, but I generally need to follow up with the "why" of it. As I wrote last week, pointing out hyperinflation in other countries is a good way to show non technical Americans why bitcoin is needed in the world.
Ethereum is different, however. While ethereum does everything that bitcoin does, and more, to describe it as a peer to peer currency is like saying Vitalik Buterin is a software developer-it's true, but he does so much more than that. The world did not need another bitcoin clone, and ethereum has not been wildly successful because it can also transfer money peer to peer. Instead, its use of smart contracts and token offerings that have set it apart from other 1st generation "alt coins".
When describing ethereum, I generally try to stick to the fact that it is an unstoppable world computer that allows people to do their own crowdfunding. As I'm constantly working on messaging, I may even remove the "unstoppable world computer" part and just explain that it is a crowdfunding platform that a person can use to create their own token to crowdfund their business, and get into the "unstoppable" part later only if the person asks.
Overlooked Uses
All the ICO excitement has made it easy to overlook the crowdfunding capabilities of anyone, not just hotshot startups. Small business owners may be pleased to find using the blockchain to distribute shares in their business is quite easy, whether equity or debt. The mass of excitement surrounding the ethereum blockchain has largely overlooked the implications for Main Street, but we can't forget that a blockchain allows small businesses to use the same technology as $200 million startups.
In fact, the low costs of using the ethereum blockchain opens more opportunities for Main Street, as support from Wall Street banks is tends to focus on fast growing companies. While it's not a profitable use of an investment banker's time to help a family restaurant remodel or open a second location, it is perfectly affordable for that small business to hire a blockchain consultant to help create a small token offering that raises capital and creates opportunities for profit sharing or lending that disintermediates banks.
Because who wants to be beholden to this guy?[2]
Small businesses looking for a loan generally turn to a local bank, but during downturns, banks are not as willing to lend. A line of credit can be revoked at any time, and this can kill a small business. With preparation, blockchain consultants should take advantage of the next recession by reaching out to small businesses and showing them how the blockchain can be used to crowdfund their business. This creates customers with greater loyalty (they want to protect their investment) and increases the bonds within a community.
Becoming a Blockchain Consultant
Let's stop thinking big for a minute. Instead of founding the next Google, how nice would it be to help business owners in a small town leverage the blockchain and begin profit sharing with their friends and neighbors...especially when the next recession hits?
There is a very small chance in making a billion dollar unicorn business in San Francisco, but there is a very good chance a person motivated to become a blockchain consultant could directly affect peoples' lives and see the fruits of their labor. This is a real opportunity that the blockchain has made possible...ethereum especially.
I would start by doing a few things:
Join a few local organizations like Rotary, Lion's Club, etc. Get to know the people who own small businesses and build relationships now-don't walk in and start rattling off on ethereum and bitcoin-and find a mentor who has worked as a consultant to help you.
Begin researching crowdfunding laws, S corporations, and the JOBS act. Find a good attorney who can help fact check you and ensure you're not recommending anything illegal.
Create a simple website displaying your credentials; write, record, or otherwise get information onto your site that shows your knowledge in how to use ethereum to do crowdfunding.
Profit
True community building can happen when both business owners and locals are incentivized to grow a business. While I try to avoid an overly rosy expectation of the future that some have, I look forward to seeing what Main Street will look like when crowdfunding becomes more common.
Have you seen a small business use the ethereum blockchain for crowdfunding? Share your story in the comments below!
[1] Special thanks to Douglas Rushkoff's Throwing Rocks at the Google Bus for the inspiration.
[2] I don't think of bankers as villains, but this picture is just too iconic to pass up.