Platform Business and Blockchain
Unlike traditional businesses with a Single-Side Value Chain structure, Smart Mobility is an area of Platform Business in that it creates new values through the connection and interaction of participants by establishing an environment in which two or more mutually dependent groups can participate and exchange the values.
The platform business model follows Metcalfe's law (the theory that the value of the network is proportional to the square of the number of users) and for this reason, large companies with enormous capital form a market by gathering people even if once they face initial large deficits and creating barriers to entry for latecomers through economies of scale. Similar to social network services, it initially reflects users' needs, provides high-quality services for free, and continues to focus only on growing the size of the community and increasing users' platform loyalty.
As a result, users who have become loyal to the platform are willing to provide platform operators with their personal information (or permission to view personal information) for their convenience, and service sellers pay fees to access the information provided by users, so platform operators only link participants' interactions and earn huge profits through brokerage fees.
Since a lot of time and capital is invested to build basic infrastructure and secure users, and to provide high-quality services, the structure of earning huge brokerage commission income cannot be criticized as wrong. However, the network effect of the smart mobility platform operating within the framework of a specific country is inevitably limited, but real-time mobility registration and usage information, precision maps, storage costs for safely storing users' personal information, and R&D costs continue to increase. Therefore, other alternatives that can sustain the current platform business are needed.
Blockchain technology can be an effective alternative to solving problems facing the existing smart mobility industry, such as cost efficiency of infrastructure construction, service integration and diversification, global market reachability , and security and privacy using distributed storage networks.
Requires huge capital to build the platform
Network effect
Barriers to entry for latecomers
The winner-take-all problem
An open network infrastructure that anyone can participate in is established
Anyone can become a high-quality service provider by utilizing a public blockchain network
Increased reliance on dominant leader platform providers
Moral hazard of platform providers
It is possible to build a trustless environment in a decentralized way in which platform participants cannot depend on a centralized entity
Utilizing token-based governance, anyone can propose improvements to the protocol
Has a highly localized character, concentrated in a specific region or country
Practically impossible to increase the number of base users, and it is difficult to grow into a global service
Anyone in the world can user it, regardless of which country they live in or which fiat currency they use
Through cryptocurrency (token), it is possible to pay incentive reward to participants, pay service fees, and reach the global market
Ongoing increase in data storage costs
Personal information hacking problem of platform operator DB (single point of failure)
Leakage of user (customer) personal information
Data can be safely stored with a high level of security by using encryption technology on decentralized nodes
Using DSNs such as Arweave, Storj, Greenfield
Below, we describe the distributed protocol Hwik Circle Layer (HCL) for participants who can leverage the infrastructure of the public blockchain, a global open network, to improve the platform business architecture of the current smart mobility industry and provide services in a sustainable manner.
[1] https://firstwatchcrypto.substack.com/p/metcalfes-law
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