Blockchain strategies  171

provide Blockchain as a Service (BaaS) solutions. The bargaining power

will soon change due to the lack of common standards as every block-

chain product is using a different protocol. This makes it impossible for

products to communicate with each other. The blockchain industry is

eagerly waiting for a solution, which can provide a common protocol or

a layer that can translate messages/transactions between different prod-

ucts. Start-ups like Polkadot and Blocknet have already come up with a

product to provide interoperability between various blockchain protocols

and products. This will reduce the bargaining power of suppliers going

forward once these products become the mainstream.

• Bargaining power of buyers: HIGH for Blockchain Buyers: It is deter-

mined by the number of buyers and the importance or size of the buyers

to the industry and how easy it is to switch to a competing supplier.

The fewer the buyers, the more control they have over suppliers, which

ultimately drives prices and profits down for suppliers.

Blockchain products and platforms are still maturing. There has not

been a mainstream blockchain implementation to replace a complex

business use case. Most of the implementation so far has been either

a POC (proof of concept) or a small part of the complex business use

case. As the most of the mature blockchain products are open-source,

that is, Ethereum, Hyper Ledger and so on. Buyers have an option to

take the source code and create a product themselves, which can fit

their purpose. JPMorgan Chase took the Ethereum source code and

created a product called Quorum to make it work for financial indus-

try. IBM is sponsoring the Hyper Ledger project and using it heavily

to provide solutions as IBM Blockchain.

Buyers also have a high bargaining power as they have a choice to

move to another supplier or create their own product depending on

how far they have been on the blockchain journey and how much bud-

get they can allocate for their own product development.

• Threat of new entrants: LOW for Blockchain products: How easy it is

for a new entrant to enter the market and provide services?

There has been a wave of new entrants in the blockchain market to

provide blockchain products, platforms and services, but no one has

been successful enough on a global scale to challenge the suppliers

yet. New entrants like Cardona, Polygon, Polkadot and IOTA might

change this landscape and provide more bargaining power to the

buyer from the perspective of blockchain product or service provider.

• Threat of substitutes: Low for Blockchain products: How easy it is for

buyers or suppliers to switch to a similar substitute, which is cheaper

and of similar quality?

There have been multiple blockchain products, but the problem is

that they use different protocols. Once buyers select a product and go

through adoption for their business use cases, it will not be easy for

them to switch to another product. Blockchain implementation is also

very expensive, so it would be waste of a lot of money and resource

time to switch the solution to another product/platform.