Decentralized Business Models: Enabling Donations with a Decentralized Charity Platform powered by Blockchain
Nowadays most business models are centralized, which means they are managed and governed by a central authority. Blockchain technology enables a new and revolutionary approach towards establishing decentralized business models. For the current study, the authors illustrates the potential of this new technology and how it may disrupt the current business models with the use of the concept of decentralization.
Joris Reding & Nicolai Reinbold, 2018
Bachelor Thesis, UBS AG
Betreuende Dozierende: Andrew Mpeqa
Keywords: Decentralization, Centralization, Business Models, Lean Canvas, Blockchain, Charity, Disruption
Centralized businesses can be highly risky. For example, businesses can operate and change their terms of a product at any given time. This means that people who take advantage of these products and services are highly dependent on the decisions made on their behalf by those businesses. Decentralized entities have the potential to establish a more transparent and fair way of shaping the terms and conditions. Thus, the thesis investigates alternative solutions and how problems from centralized businesses can be overcome by employing decentralized business models powered by Blockchain technology.
The thesis sets a specific focus on charity platforms. In particular, charity platforms seemed significantly interesting for this analysis, as this use case is currently highly centralized and inefficient. An adjusted model of the "Lean Canvas" business model was therefore used to compare both, centralized and decentralized charity platforms. The comparison provides an overview of the business models to evaluate if a decentralized platform could be an effective alternative solution. The study findings support the notion that companies and society should continuously stimulate and foster a new way of thinking when doing business.
The results of the study indicates that in general, both centralized or decentralized may be equally effective. Eventually, the effectiveness depends on the core goals and objectives of each individual company. Based on these findings, the authors recommends that each organization should decide as to what degree their business should become centralized or decentralized. On the one hand, centralization offers the advantages such as uniform policies and the complete control over the business. On the other hand, decentralization has the potential to operate autonomously and with the benefit of having transparent processes.
Smart contracts decentralize power form an organization to a public online protocol. Donators can rely on the Blockchain network that the defined terms will be met. Therefore, if a smart contract promises that 100% of the donation will arrive at a specific project, the person who donates does not need to trust a central authority, he or she can completely rely on the public protocol. Furthermore, surveys have shown that a more transparent donation process would lead to 50% more donations. As the Blockchain network can be public, the flow of the donation would be completely transparent.
The authors see many benefits in building up a decentralized charity platform powered by Blockchain technology. The platform would reduce existing pain points such as high transaction fees and lack of transparency.
Studiengang: Business Administration International Management (Bachelor)
Fachbereich der Arbeit: Economics