What is Blockchain Technology? A Comprehensive Guide For Beginners

When Satoshi Nakamoto first created the cryptocurrency Bitcoin in 2008, it was viewed with immense distrust, still is to a considerable extent, with Central Banks and Regulatory Agencies remaining sceptical and refusing to adopt it. However, the underlying technology, blockchain has become one of the most talked about topics Worldwide. Nearly every major player in every industry is exploring the use of blockchain technology. It is finding use cases in several areas including financial services, retail, trading, legal, healthcare, and pretty much any business that involves record keeping and is also expected to unleash a new wave of financial products and services generating new avenues for greater revenue for banks.

Blockchain, also known as “distributed ledger technology” was originally created as a tracking database for Bitcoin transactions. It was designed to process transactions without the need for a central bank or intermediary, using complex algorithms and consensus among its peer-to-peer network to verify transactions. In the past couple of years, banks and financial institutions have been betting on blockchain to provide a reliable alternative to systems that depend on intermediaries and third-party validation of transactions. Their goal is to leverage blockchain distributed ledger approach to create a system that decentralizes trust to significantly reduce all types of transaction fees along with shorter processing timelines. The disruptive potential of this technology is widely claimed to equal that of the early commercial Internet. A crucial difference, however, is that while the Internet enables the exchange of data, this technology could enable the exchange of value; that is, it could enable users to carry out trade and commerce across the globe without the need for payment processors, custodians and settlement and reconciliation entities.

According to Forbes, blockchain technology is being viewed as a platform which could bring about stupendous changes in financial transactions, due to:

  1. As a public ledger system, blockchain records and validate each transaction made, which makes it secure and reliable.
  2. All the transactions made are authorized by miners, which makes the transactions immutable and prevent it from the threat of hacking.
  3. Blockchain technology discards the need for any third-party or central authority for peer-to-peer transactions.
  4. Decentralization of the technology.

Governments, world’s largest financial institutions, global banks and other financial organizations are investing in proof-of-concept projects internally, using trial and error deployments within limited parameters to create efficiencies. The full potential of blockchain can only unravel when institutions partner together to set industry standards and protocols that enable interoperability. The underlying principles of blockchain i.e. decentralization, consensus based system and use of unique digital signature will reinforce the financial system which was recently found to be increasingly vulnerable to online frauds. Startups, established financial institutions and fin-tech companies have found the below applications of blockchain technology and are investing in the development of application and products based on the same:

  1. Payments: Blockchain can transform the world of digital payments to near real-time transactions with real time settlements, without intermediaries. Development of new payments products, based on blockchain technology such as self-executing smart contracts are the next step.
  2. KYC/AML and Records Management: A decentralized, network-defined registry makes KYC processes streamlined and helps in AML checks and controls during client onboarding.
  3. Capital Markets: A distributed and consolidated data repository built on blockchain technology gives users a unified and real-time view of all trade-related information, thus reducing the scope for error or disagreement and accelerating the settlement process.
  4. Trade Finance: The complex network of players with manual processes and paper work is transformed into efficient and innovative trade finance services
  5. Syndicated Lending: Blockchain in syndicated lending envisages to reduce the settlement process on the sell-side and buy-side, thus saving time and cost worth millions.
  6. Regulatory reporting: Easy access to transaction reporting data for regulators will reduce cost of regulatory reporting of market participants.
Image Source: Mermelab

The use of blockchain, when applied to legacy processes of the banking and financial services firms, has potentially transformative effects in the space. However, it is essential to bolster the technology infrastructure even before banks start testing the waters. Blockchain has exceptionally high impact and it leads to:

  • Lower operational costs
  • Seamless global trade
  • Reduced risk in clearing
  • Increased trust
  • Distributed Identity

Spark10 has evolved

Startup accelerators, in their traditional avatar, are no longer relevant as the startups themselves have changed. When mainstream accelerators started in 2005, the startups of the day needed an intense mentorship program to build their business. Accordingly, programs were designed wherein the startups would co-locate with the accelerator for the entire duration. As the startups and startup ecosystem evolved with time, scaling up became a bigger challenge than building a business. That’s when the accelerators themselves transformed and built programs to scale up early stage companies. In 2017, especially in India, where accelerators are still following the conventional model, Spark10 has identified that the next generation of startups needs a program, that aligns to their needs and that causes minimal disruption to their normal operations. Our new accelerator program has been designed with the focus on business requirements of the next generation of startups.

Spark10’s accelerator program started in 2016 with a vision to be the “first investor” for idea stage or early stage startups. Since then we have had 2 cohorts with nine and four startups respectively. Both were fixed cohorts of 3 months each, and startups were required to co-locate with us for 3 months. We realized, that startups and the startup ecosystem are changing, as it rightly should. We concluded that 13 weeks weren’t quite enough to provide meaningful support. Startups based out of locations, far from our program location had trouble running their business remotely, while they were part of the program. Lastly, our team of mentors and investors felt the need to spend more time with founders to be able to guide them better.

Our new program is a rolling cohort, spanning over 6 months, where startups will be required to co-locate with us for only one week every month. To keep startups focused on their goal, there will be weekly reviews (remote and in-person) and ongoing mentorship sessions, workshops and talks along with the opportunity to network and connect with experts from your industry as well as investors will ensure you come up the curve faster. This unique program also allows us to work with the best founders, companies, and brains in the country. In a market where existing and new accelerator are still trying to make the traditional model work, our accelerator offers flexibility and extended support so we are with you at every step in the crucial stages of growth.

For entrepreneurs to be, who have just come up with their business idea, we offer mentorship, capital as well as exposure so you can translate it into a sustainable business. If you are a company with a Minimum Viable Product (MVP) or a prototype, funded already, our in-house mentors along with our community of industry experts will offer you mentorship so you can scale your business. For startups that do not require financing, we offer mentorship and guidance. All this for a small stake in their business – we take a small equity capped at 6% for up to a maximum investment amount of Rs. 20 lakhs.

Keep watching this space for an announcement of our next cohort. If you have any questions, please post them on our website, LinkedIn, Twitter handle or Facebook page and our team will respond asap.  If you or any of your contacts are working on building a business that can benefit from Spark10 or have any queries, please feel free to drop a line at hello@spark10.com

Founder’s Huddle – Funding challenges

The world of startups is powered by creative ideas. The only other factor as compelling, is the capital. Almost 90% of startups fail in the initial stages or just do not grow beyond an idea for lack of funding. A business  must be fuelled by funding at various stages of growth along with reaching targeted milestones.

And when it comes to funding your ideas, one size does not fit all. Therefore, raising funds can be confusing, often overwhelming. You may take years to come up with an idea, make a prototype and perfect your pitch to investors at the end all it takes is nod in the right direction to make a business out of it.

           How much to raise and how to utilize the funds are the next most crucial questions an entrepreneur faces. For most start-ups, Seed funding and Series A are the most difficult phases since their pitch does not factor-in financial planning.

A Harvard Study attributes raising too much funds too soon as one of the Top 10 reasons why most startups fail. In addition to this, every business has its own cash-burn rate and entrepreneurs need to be wary of accelerating too fast and too soon. Judicious utilization of funds not only ensures you don’t run out of cash but also that your venture has robust fundamentals to be able to seek the next round of funding.

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Understand Startup Finance and Fund-Raising

Spark10’s Founders’ Huddle aims to address all such problems that founders face. Our cases driven program is  conceptualized and designed to help entrepreneurs solve their problems based on similar issues that other startups and businesses faced in the past.

FOUNDERS' HUDDLE is a program that brings some key experiences of past startups (alive or dead) in form of cases that you will analyze and discuss during the session. By the end of the session, our aim is to give you the tools and method to determine for yourself the right way to approach your problems in your startup.

To begin with, we have created a program to help you understand startup finance and funding.

 

Fund-Raising Hacks (2-day case-based workshop)

Here are the few things we cover during these two days:

* Determining the viability of your idea/startup (Should I really start or continue this business?)

* Determining your operation strategy using financial statements (What should I do next - expand or stabilize?)

* Determining how to value your idea or startup (How much is my company worth?)

* Deciding what terms and which investors are good for you

* Understanding the fundamentals of investor pitches (What numbers should I show?)



Startup Accelerator, Startup Funding, Business Funding, Startup Investment, Hyderabad, India

Spark10 Startup Accelerator – Partners

 

The count has begun for the launch of our next Cohort. With just a month to go, we are actively working with our investors to finalize on the selected startups. We are also associating with the large established companies to provide best services and support to our upcoming startups of Cohort 2017 – A.

Below listed are a couple of partners who share our beliefs and values in supporting the entrepreneurship and creating a sustainable global community.

 

The Hive: Venue partner

The Hive is a co-working / shared office platform, backed by the Xander Group. Our first centre is a 60,000 sq.ft. space with attached suites & residences, fitness club, spa & salon, rooftop pool, lounge bar and microbrewery. It is located at VR Bengaluru, the city’s latest community-centric lifestyle destination.

 

UREKA: Learning and Development partner

Ureka Ltd is a start-up ecosystem enabler and knowledge provider founded by a group of Sloan Fellows from London Business School that specializes in Entrepreneurship Development and Internationalisation.

They have a presence in London, Bangalore, Hyderabad, Lucknow and soon to be in Dubai.

Ureka’s international network is its biggest asset and it leverages these strong linkages to source experts, mentors, speakers, investors and to provide market access and incubate exchange programs with world leaders in the field. It has direct access to the international networks of the prestigious London Business School, Oxford University, University of London, Yale School of Management and Chicago Booth to name a few.

 

Amazon Web Services (AWS)

AWS provide startups with low cost, easy to use infrastructure needed to scale and grow any size business. Some of the world’s & India’s hottest startups, including Pinterest, Dropbox, Snapdeal & Redbus have leveraged the power of AWS to easily get started and quickly scale. AWS Activate is a program designed to provide startups with the following resources.

  • Technical Enablement –Access to Solutions Architects to help startups improve their architecture and increase security, reliability, and scalability, and reduce costs
  • Commercial Enablement –Help startups with AWS Credits leading to reduction in the cost structure as they scale their business
  • Go to Market Enablement –AWS Marketplace, Partner Network, public case studies, joint white papers, business development connects, conference showcasing, etc.

 

Qapitol QA

Qapitol QA ensures positive online and offline customer experiences resulting in business success. At QQA, they support QA Acceleration at all stages of startup and product evolution and help startups test faster, wider, deeper, better, cheaper to provide them with actionable intel. With Qapitol QA startups can iterate fast and reach the market faster.

 

Razorpay

Razorpay aims to revolutionize online payments by providing clean, developer-friendly APIs and hassle-free integration. They offer a fast, affordable and secure way for merchants, schools, e-commerce and other companies to accept payments online.

 

World Startup Factory (WSF)

World Startup Factory is a co-creation platform for startups and all the stakeholders that see value in this process. It’s a startup accelerator based in The Hague, The Netherlands. WSF support entrepreneurs with impact-driven solutions backed by convincing business models.

 

Penta Security - Cloudbric

Penta Security has been named 2016’s Asian Cyber Security Vendor of the Year by Frost & Sullivan. Cloudbric is a cloud-based web security service, offered by Penta Security. They offer an award-winning Web Application Firewall (WAF), DDoS protection, and SSL, all in a full-service package.
 
Cloudbric aims to bring enterprise-level website security to small and medium businesses. For easier access to the everyday user, Cloudbric offers a comprehensive suite of protection without complicated installation steps, downloads/updates, nor overwhelming technical jargon. Protect your business and sensitive data with Cloudbric before hacker’s attack.

 

DigitalOcean (DO)

Hatch is DigitalOcean's global incubator program designed to support startups as they launch and scale. This includes access to DigitalOcean's cloud for 12 months, free technical training, mentorship, priority support, and an opportunity to connect with other startups, accelerators, and investors.

 

Bizjumper – Value Partner

Bizjumper simplifies the business pitch and extensive plan by providing an online solution that can help shape up an idea into a successful startup and financial community can leverage this platform to create a volume based and extensive business plans for their end customers.

 

 

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