Who is involved in the blockchain network?

Many working professionals were initially skeptical about blockchain technology’s real-world applications when it was first implemented in 2009. However, the technology has become far more widespread in recent years and is now impacting a vast range of industries. Increasingly, business leaders and other professionals are incorporating the technology and its applications into their strategies.

Blockchain technology can be viewed as a collection of components or layers. There are different ideas around the number and organization of these layers, but for the purpose of this article, we’ll examine the following:

• Protocol layer: This includes fundamental architecture as well as the consensus layer, activating layer, contract layer, and application layer.¹
• Networking layer: This relates to how the protocols (software) are implemented.²
• Application layer: This layer acts as a user interface with the blockchain and includes smart contracts, decentralized apps, and chaincode.³

These layers involve various stakeholders at each developmental stage who are involved in infrastructure development, building services and products, funding, or education.

Stakeholders from the protocol layer

1) Developers

Developers create and optimize the blockchain protocols that serve networks and design the architecture of blockchain systems.⁴ These professionals must be proficient in data structures and cryptography, as these elements are crucial to the functioning of a blockchain. The protocol layer is mostly concerned with cryptographic keys that will interact with the networks, either public or private.

In public blockchain networks, anyone can see the digital ledger, edit and audit it, and participate in consensus.⁵ Private blockchain networks are accessible only to verified participants. The developer can override, edit, or delete entries on the chain.⁶

2) Researchers and academia

Blockchain research helps to educate others on blockchain technology’s impact, especially considering the wide-ranging applications it already has on business and society. Major research focuses include market efficiency and economics, asset pricing and valuation, transactions and anonymity, monetary theory and policy, and principles and applications of the technology.⁷

Stakeholders from the networking layer

1) Miners

Miners help build consensus among untrusted nodes in a public blockchain, like Bitcoin. They add transactions, bundled into blocks, to the network by solving complex mathematical problems and require considerable computing power and electricity.⁸

2) Industry bodies

Various industry bodies exist to bridge the gaps between researchers, private entities, and public institutions to advocate for the technology and to establish standards. Blockchain’s increasing ubiquity has spurred the adoption of new regulations, concerns around the use of cryptocurrencies for illegal activities, and the need to protect the users of related platforms that offer cryptocurrency-related financial services.⁹

3) Traders

These stakeholders are entities that distrust fiat currency or are motivated to drive a financial profit, and will give others access to the blockchain protocols. This is provided via tokens in the form of cryptocurrency.

Cryptocurrency trading can occur in two ways:¹⁰

• Via leveraged derivatives. You speculate on the price movements without actually buying coins.
• Trading cryptocurrency coins via an exchange. With this method, you open a position by putting up the full asset value. Subsequently, you store the coins in a wallet.

Stakeholders from the application layer

For more insight into the workings of blockchain, the online short course from MIT Sloan School of Management offers an in-depth view into the technology and its applications in business.

1) Entrepreneurs

These people create the applications, products, or services that utilize blockchain protocols and networks. Entrepreneurs and start-ups will have an end goal of making a profit, but blockchain entrepreneurs – particularly in the cryptocurrency sphere – are often motivated by an anti-establishment approach to, and distrust of, traditional systems.¹¹

2) End-user

End-users utilize blockchain applications, products, or services. These stakeholders are critical to the entire blockchain strategy system, as what they deem valuable affects other stakeholders’ decision-making. The end-user’s response will significantly impact business strategy in the blockchain strategy system.¹²

3) Corporations

These stakeholders are on a mission to utilize blockchain technology to solve business problems or develop new strategies. Many corporations recognize the value of blockchain in building trust and transparency around recruitment, certification, commercial transactions, and data security, as well as increasingly important factors like sustainability and ethical sourcing.¹³

Below are two examples of how blockchain can benefit corporations:

Insurance

The insurance sector is primed for blockchain integration. Utilizing the distributed ledger’s inimitable authentication ability, insurers can independently verify information contained in contracts to enable a simplified process at every stage. From minimizing fraud to developing a system where some claims can be verified and handled with great speed, blockchain technology’s computational power could significantly alter the industry.¹⁴

Forecasting

Gnosis is an example of an open-source prediction market platform, where users trade cryptocurrencies that represent outcomes of events on an open market. The idea is that aggregating uncensored public opinion on future events can provide a more reliable forecasting tool.¹⁵

4) Venture capitalists or investors

These are the individuals or organizations that provide capital to create the blockchain infrastructure. Their opportunities are broadly divided into two sets:¹⁶

• Cryptonetworks: Investors gain exposure to blockchain protocols via equity, simple agreement for future tokens, or tokens themselves.
• Ecosystem, picks and shovels, or infrastructure: These are more conventional venture capital investments in companies with predictable cash flows.

Where do you come in?

If you’re involved in the blockchain ecosystem, it’s likely you fall into one of these stakeholder categories that intersect with the blockchain strategy system.

If you do, you’ll want to keep abreast of the latest blockchain developments. The MIT Sloan School of Management’s six-week Blockchain Technologies: Business Innovation and Application online short course examines how blockchain is fundamentally changing business and economics. If you join the course, you’ll walk away with tools to help you leverage the technology to drive business innovation and efficiency. Learn more about what you can expect from the program here.

The University of Cape Town (UCT), in turn, offers a cryptocurrency focus in the Blockchain and Digital Currency: The Future of Money online short course. This six-week online course will expand your working knowledge of blockchain and cryptocurrency assets, and reveal how crypto assets are already shaping the financial industry.

Similarly, the SDA Bocconi School of Management offers a five-week Bitcoin and Blockchain Program. This program cuts through the hype around Bitcoin and blockchain by exploring the technical pillars that underpin these powerful technologies.

---

Browse the range of fintech and blockchain online courses