11th August 2017

Mastercard's opportunity to be the "kickstarter.com" of Blockchain TGE’s

By Cianán Clancy

Recent developments in the world of blockchains are creating new opportunities for startup business - in turn creating an interesting opportunity for a company with existing startup programmes to become the "kickstart.com" of blockchain businesses.

For new blockchain startups, Token Generated Events (TGEs) offer up a new business approach. These “tokens” differ from the better-know "bitcoin" in that they're programmable and can represent any functionality the developer wants, rather than just storing a unit of value specific to one blockchain. One implication of this is the automatic execution of business processes, simplifying things and creating a more versatile, flexible way for companies to get off the ground. Using tokens also allows a startup company to establish their stakeholders early on, letting stakeholders benefit from their product early on while they continue development while drawing on proceeds form the sale of the tokens. Furthermore, it has the potential to more easily reach a global market. It's a new, flexible business paradigm with a lot to offer.

However, there are always challenges when introducing a non-traditional approach. The technology has teething problems. Networks supporting TGEs have been under strain due to the volume of transactions and there can be design flaws in some token sale models, resulting in slowed functionality and delayed distribution of tokens.

There are also business risks around security and how to best use the new technology. Tokens are new and not necessarily easy to understand without some background knowledge in the area. Knowing how to take full advantage of the benefits and feeling reassured that your data, systems and finances are secure is a huge concern for any business. Startup companies, however, are often more willing to try something new if the potential benefit is attractive enough.

Mastercard can make that benefit clear. It’s a company known for its innovation and already has specialist areas focusing on innovative technology and on startup businesses and accelerator programmes. Their programme Start Path works with startups from different sectors across the globe, providing advice and support to help businesses connect with their existing global networks. Already a recognised and trusted name when it comes to money management generally, Mastercard have been building their reputation in this area. They've supported some startups that are being noted, such as the multi-currency app and card Revolut and the online payment security solution MePIN.

Mastercard's Research and Development division, Mastercard Labs, focus on developing and providing innovative payment solutions for companies and are already doing research into incorporating blockchain into their assets. And they're working closely with Start Path Global as they do this. It would be possible for them to run a specific blockchain startup model. And as well as bolstering their own reputation as innovators, it has the potential for value to be run through their systems (investment via credit card, for example) and would only add to the benefits they see from supporting and investing in startups.

Mastercard are already trusted in finance and business, have the expertise in security, and have experience with startups. If they can integrate TGEs with their existing portfolio and programmes for startup companies, they really could be the company to make blockchain the first choice for new businesses.

Head over to Behance to see some mock ups