side, marketing and finally reaching to the customers.
2.3.1.2 Business Model—Traditional
In this type of model the consumers are physically present for purchasing the goods from the market. It is just like buying products from the local store. This model is a purely centralized one which is controlled by some regulators. Different businesses exist which are centralized by different regulators, controlled and managed by the authorities which includes:
1 a. The organization,
2 b. The stakeholder or owners,
3 c. The workers, and
4 d. The consumers.
Traditional business model are divided into the following types:
1 Manufacturer
2 Distributor
3 Need of customers fulfilled
4 Franchise.
1 ManufacturersThey are the ones who make products from the raw materials; they can also assemble the components to make the products. Common examples are computer & automobiles. This model can directly sell products to the customers, i.e., B2C or they can outsource to other businesses, i.e., B2B also. For example, dye manufacturers sell to the retailers which then sell them to the customers.
2 DistributorsThe organization with the distributor model purchases the products directly from the manufacturers and they supply to the wholesalers then to retailers or to the customers. The main responsibility of this model is to set the value which in return provides profit to the company. Adding on to that, it makes marketing strategies which can bring more sales of the products. In general, its role is an inter-mediator between the manufacturer and the local users.
3 Need of Customers FulfilledThe companies which are having retailer business model have the function to sell products directly from distributors to the customers. Retailers can supply products both via online and offline mode. Online retailers like those selling products on e-commerce website include Amazon, Flipkart, Myntra & Shopclues. Offline retailers are similar to those departmental stores, local shops which exit physically.
4 FranchiseThis model comprises of other business models which are mentioned above. The purchaser of franchise is called franchisee for e.g. Pizza Hut.A traditional business model provides services or products and gains profit from them. Consumers purchase the product or service at the recommended rate. This price is set correspondingly and it also has the description about the earnings and other expenditures aroused by the business while providing the goods or services.
2.3.2 Are Blockchain Business Models Really Needed?
The Blockchain business models provide an opportunity to the centralized platform to upgrade their businesses into decentralization. It turns the individual elements, transactions, profits, and also assures growth. This technology has the potential to give benefit to both—actors and centralized employees. Before switching to the Blockchain models certain points should be memorized about it:
Entrepreneur or startups or already established organization can implement the blockchain in their businesses.
Not easy to delete records which are already on Blockchain.
Blockchain’s main uniqueness is its transparency which helps in uplifting of the functioning of supply chain.
An application of this technology can be seen in the fourth industrial revolution where many firms have developed their own decentralization of Artificial intelligence model.
2.3.2.1 Blockchain Business Model
2.3.2.2 Model 1: Utility Token Model
A token can be regarded as a value, stake or representation of anything functioning in a particular ecosystem. Unlike crypto currencies, they are not dependent on some platform but tokens (golem) are used for a specific platform within the ecosystem called as native token. The utility token provides products and services to the users. The tokens have the potential to promote more functionality in the business. Examples of these kinds of
models are Ripple and Stellar. The utility tokens power the network and expedite the network activities. A part of the utility tokens is held by businesses and the rest is liberated for the functioning of the network. The stake of utility token changes because it works according to the supply–demand criteria; if the demand of the product increases, its supply decreases which tends to increase in value. This way, this model provides benefit to the businesses. It involves properties such as:
1 a. Role
2 b. Features
3 c. Purpose.
Crypto Token Usage and Value
| Roles | Purpose | Features |
| 1. Right | Bootstapping Engagement | Using Products—votingAuthentication—Product accessContribution—Ownership |
| 2. Value Exchange | Economy Creation | Rewards for Work-Selling some productPurchasing—Active/Passive workExpenses-Manufacturing product |
| 3. Toll | Skin In the game | Running smart contractsSecurity DepositsUsage Charges |
| 4. Function | Enriching User experience | Network joiningUsers ConnectivityUsage’s Incentives |
| 5. Currency | Frictionless transaction | Payment unitTransaction unit |
| 6. Earnings | Distributing profits | Profit sharingBenefit Sharing |
To make the work more effective the token can take many roles as possible.
2.3.2.3 Model 2: BaaS
This
