Blockchain Applications and Digital Business Models

Introduction

Blockchain has moved beyond its original association with cryptocurrencies. It is now evaluated as a coordination technology for situations in which multiple parties need to share records, transfer value, establish provenance, or execute rules without relying entirely on a single intermediary. Its business significance does not arise from decentralisation alone. It arises when blockchain reduces reconciliation, increases verifiability, enables programmable ownership, or creates new forms of market participation.

This chapter examines blockchain applications in payments, supply chains, gaming, creator economies, non-fungible tokens (NFTs), decentralised social media, tokenised real-world assets (RWAs), and enterprise ecosystems. It also presents a structured method for deciding whether blockchain is suitable for a business problem. Suitability must be assessed alongside adoption, regulation, user experience, governance, operational risk and financial return.

A blockchain is not automatically the best database, payment rail or business model. A conventional database may be cheaper and faster where one trusted organisation controls all participants. Blockchain becomes more compelling when several organisations require a shared, tamper-evident state and no participant is willing or able to become the sole trusted operator.

Learning Objectives

By the end of this chapter, a learner should be able to:

1. Explain how blockchain changes value exchange, ownership and inter-organisational coordination.
2. Evaluate blockchain applications in payments, supply chains, gaming, creator economies, NFTs, decentralised social media, RWAs and enterprise ecosystems.
3. Distinguish genuine blockchain value from speculative or unnecessary tokenisation.
4. Develop a use case using a problem, stakeholder, process, technology and value framework.
5. Assess adoption, governance, regulatory exposure, operational risk and return on investment.
6. Recommend whether an organisation should adopt, pilot, redesign or reject a blockchain solution.

1. A Framework for Understanding Blockchain Applications

1.1 The application stack

Blockchain applications generally contain five layers:

The application is only as reliable as its weakest layer. A smart contract may be technically correct but economically unsafe; a token may be transferable but legally ambiguous; and a transparent ledger may expose commercially sensitive data.

1.2 The trust and coordination test

A blockchain use case is strongest when the following conditions are present:

• multiple independent parties must coordinate;
• parties have partially conflicting interests;
• a shared record is valuable;
• reconciliation between databases is expensive or slow;
• transactions require traceability or programmable settlement;
• participants can agree on governance and data standards.

It is weaker when one organisation already has legitimate authority, data is highly private, transactions are simple, or users gain no meaningful benefit from holding or controlling digital assets.

A practical screening question is: “What trust, coordination or ownership problem remains after a conventional database and legal contract are considered?” If the answer is unclear, blockchain may be a technology-driven solution rather than a problem-driven one.

1.3 Value creation and value capture

Blockchain can create value through:

• lower reconciliation and intermediary costs;
• faster settlement;
• reduced fraud or duplication;
• continuous auditability;
• fractional ownership;
• automated conditional payments;
• global and composable digital markets;
• user control over identity, assets or social relationships.

Value capture asks who receives the benefit. A platform may reduce costs but fail to monetise the saving. A creator may obtain direct payments but face higher customer-support costs. A token issuer may raise capital but create regulatory obligations. Therefore, a business model must connect technical capability to revenue, cost reduction, risk reduction or strategic advantage.

2. Payments and Financial Settlement

2.1 Blockchain payment models

Blockchain-based payments include cryptocurrency transfers, stablecoin payments, central-bank digital currency experiments, remittances, merchant settlement and programmable treasury operations. Their principal advantages can include twenty-four-hour operation, near-real-time settlement, reduced dependence on correspondent banking and transparent transaction history.

Stablecoins are particularly important because they attempt to combine blockchain transferability with relatively stable purchasing power. They may be backed by bank deposits, government securities, other assets or algorithmic mechanisms. Users must distinguish the technical ability to transfer a stablecoin from the quality of its reserves, redemption rights, governance and regulatory status.

2.2 Payment economics

A payment system should be evaluated through total cost rather than transaction fee alone. A useful model is:

Here, C_total is total cost per transaction; C_fee is the network or service fee; C_fx is foreign-exchange cost; C_liquidity is the cost of maintaining balances or funding channels; C_compliance is the cost of identity, monitoring and reporting; and C_failure is the expected cost of errors, fraud or failed settlement. The model applies when these costs can be estimated on a comparable per-transaction basis.

Blockchain payments can reduce settlement time but introduce wallet-management, private-key, volatility, sanctions and consumer-protection risks. A robust design may therefore use regulated custodians, transaction limits, multi-signature approval, stablecoins and off-chain dispute procedures.

2.3 Business applications

Cross-border remittances may benefit from faster movement of value, but the complete customer journey still includes cash-in, cash-out, identity checks and local regulation. Business-to-business payments can use smart contracts to release funds when delivery data is verified. Treasury departments may use tokenised deposits or stablecoins for internal transfers, subject to banking and regulatory constraints.

Blockchain does not eliminate the need for payment regulation. Anti-money-laundering, know-your-customer, sanctions, consumer-protection, tax and data-protection obligations remain relevant. The payment rail may be decentralised while the service provider remains a regulated financial intermediary.

3. Supply Chains and Provenance

3.1 The provenance problem

Supply chains contain manufacturers, logistics providers, customs authorities, distributors, retailers and consumers. Each participant may maintain a separate database. Differences in product identifiers, timestamps and shipment records create reconciliation costs. Blockchain can provide a shared event history, while IoT devices, enterprise systems and authorised personnel supply the underlying data.

A critical limitation is the “oracle problem”: blockchain can preserve a submitted record, but it cannot independently determine whether the original physical-world statement was true. If a worker enters a false temperature reading, the ledger preserves a false statement immutably.

3.2 Suitable supply-chain uses

Appropriate applications include:

• pharmaceutical batch and cold-chain tracking;
• conflict-mineral and sustainability claims;
• food recall and provenance systems;
• bills of lading and trade documentation;
• warranty and product-authenticity records;
• shared supplier compliance credentials.

The system should define a minimum viable data set, a common product identifier, data ownership, correction procedures and liability for inaccurate entries. Sensitive commercial data should generally be stored off-chain, with hashes, references or proofs recorded on-chain.

3.3 Adoption challenge

A supply-chain network gains value only when enough economically important participants contribute reliable data. Requiring small suppliers to purchase complex infrastructure may reduce participation. Adoption can be improved by providing simple mobile interfaces, subsidising onboarding, using existing enterprise software integrations and demonstrating a direct benefit to each participant rather than only to the dominant buyer.

4. Gaming, Creator Economies and NFTs

4.1 Digital ownership in games

Blockchain games can represent characters, items, land or achievements as tokens. Players may trade assets outside the game’s original marketplace. This can support secondary markets and user-controlled ownership, but it also creates balancing, speculation, fraud and intellectual-property concerns.

Ownership of a token does not automatically confer ownership of the underlying artwork, game code or commercial rights. Licences must specify reproduction, commercialisation, modification and transfer rights. A game may also retain the ability to change metadata or disable an asset, so “ownership” must be analysed technically and contractually.

4.2 Creator economies

Blockchain can enable direct fan payments, memberships, digital collectibles, automated revenue splits and portable reputation. Smart contracts can distribute a sale among a creator, collaborator, platform and treasury. However, technically encoded royalties may not be enforceable across every marketplace, and secondary sales are not guaranteed.

A creator-economy model should answer four questions:

1. What scarce or valuable relationship is represented by the token?
2. Why is token ownership better than an account-based subscription?
3. How are creator rights, consumer rights and platform responsibilities defined?
4. What happens if the platform, creator or smart contract disappears?

4.3 NFTs beyond collectibles

An NFT is a unique blockchain token that can reference an asset, right, status or data structure. Useful applications include event tickets, certificates, memberships, licences, warranties, identity credentials and digital art. The value of an NFT depends on scarcity, authenticity, utility, community and legal enforceability—not merely on its existence on a blockchain.

NFT systems should address duplicate collections, stolen works, misleading marketing, metadata permanence, intellectual-property rights, accessibility and environmental impact. A low-cost, energy-efficient network does not remove the need for responsible product design.

5. Decentralised Social Media

Decentralised social media separates functions traditionally controlled by one platform. Identity, content storage, social graphs, moderation and monetisation may be distributed across protocols and service providers.

Potential benefits include portable identity, user-controlled profiles, reduced platform lock-in, community governance and alternative monetisation. A user might retain a social graph while changing interfaces, or subscribe directly to a creator without platform-wide permission.

The model introduces difficult governance questions. Who removes harassment or illegal content? How are appeals handled? Can a user revoke content distributed across independent servers? How are minors protected? A protocol that cannot moderate effectively may transfer costs and risks to users and communities.

A practical architecture may combine decentralised identity and account portability with moderated application servers. This hybrid approach recognises that decentralisation is not a binary property. Different functions can have different degrees of openness, autonomy and control.

6. Tokenised Real-World Assets

6.1 Meaning and structure

Tokenisation is the representation of a claim, asset or economic interest using a blockchain token. Examples include government securities, funds, invoices, real estate interests, carbon credits and private-company shares. Tokenisation can support fractional access, automated settlement, collateral mobility and transparent ownership records.

The token is not necessarily the asset itself. It may represent a contractual claim against an issuer, custodian, special-purpose vehicle or regulated intermediary. The legal connection must be explicit. If the token and legal register diverge, disputes may arise over who owns or can enforce the asset.

6.2 Design questions

A tokenised RWA project should establish:

• the legal issuer and governing law;
• the rights represented by each token;
• custody and segregation of the underlying asset;
• valuation and reserve verification;
• transfer restrictions and investor eligibility;
• redemption and settlement processes;
• insolvency treatment;
• identity, tax and reporting requirements.

Tokenisation is particularly useful where transfer, audit or fractionalisation is currently costly. It is less useful when the existing registry is already efficient and the proposed token merely duplicates it.

6.3 Risk-return assessment

The expected net benefit of tokenisation can be represented as:

The terms represent annual or project-period monetary benefits and costs. Benefits may include reduced reconciliation, new revenue and reduced expected loss; costs include technology, organisational change and regulatory implementation. The equation is a decision framework, not a valuation theorem. Estimates should use consistent time periods and avoid double counting.

7. Enterprise Ecosystems and Consortium Blockchains

Enterprise ecosystems commonly use permissioned networks, in which participation, transaction endorsement and data visibility are controlled by identified organisations. Such systems may use conventional consensus mechanisms rather than open, permissionless mining.

Advantages include privacy controls, predictable performance, governance clarity and integration with enterprise identity. Disadvantages include consortium formation costs, potential centralisation, complex legal agreements and the possibility that a shared database would be sufficient.

An enterprise ecosystem should define:

• membership and onboarding rules;
• node operation and software upgrade authority;
• data visibility by role or organisation;
• dispute resolution;
• liability for incorrect entries;
• service-level agreements;
• exit and data-portability procedures;
• cyber-security and key-management controls.

The consortium must have a credible reason to share infrastructure. If one dominant organisation can impose standards without negotiation, a conventional platform may provide better economics. If participants require mutual assurance and no party should control the complete record, a consortium blockchain may be justified.

8. Developing and Evaluating a Blockchain Use Case

8.1 The use-case canvas

A professional use case should be developed through the following sequence:

1. Problem: Identify a measurable operational, market or governance problem.
2. Actors: Identify users, beneficiaries, operators, regulators and affected parties.
3. Current process: Map systems, hand-offs, delays, disputes and costs.
4. Blockchain rationale: Explain why shared state, tokenisation or smart contracts are necessary.
5. Data and asset model: Define on-chain and off-chain information, ownership and identifiers.
6. Process design: Specify transaction flows, approvals, exceptions and reversals.
7. Governance: Assign decision rights, upgrades, dispute handling and accountability.
8. Compliance: Assess licensing, privacy, consumer protection, tax and financial-crime controls.
9. Adoption: Identify incentives, onboarding barriers, network effects and migration strategy.
10. Economics: Estimate investment, operating cost, benefits, risk and sensitivity.
11. Pilot: Define a limited test with measurable success criteria.

8.2 Blockchain suitability matrix

This matrix supports judgement; it does not replace a technical and legal feasibility study.

8.3 Adoption and network effects

Many blockchain applications are multi-sided platforms. A payment network requires users and merchants; a supply-chain ledger requires suppliers and buyers; a creator platform requires creators and audiences. Adoption may be constrained by the least motivated participant.

Useful adoption metrics include active users, repeat transactions, participating organisations, transaction completion rate, wallet retention, percentage of records submitted by authorised parties, dispute frequency and time to settlement. Token price or total value locked may be relevant market indicators, but they are insufficient evidence of durable product adoption.

8.4 Return on investment

A simple return-on-investment measure is:

G is the monetary gain over the selected period and I is the investment cost. Both must use the same currency and time horizon. If G is net benefit after operating expenses, the formula gives a project-period ROI; if it is gross benefit, costs may be overstated.

For multi-year projects, net present value is more appropriate:

I₀ is the initial investment, Fₜ is net cash flow in period t, r is the discount rate per period, and n is the number of periods. The model assumes cash flows occur at the end of each period and that the discount rate reflects risk and financing assumptions. A positive NPV indicates that projected discounted benefits exceed costs under those assumptions.

9. Worked Evaluation Example

An illustrative logistics consortium proposes a blockchain record for temperature-sensitive medicines. Five organisations currently reconcile shipment records manually. The pilot requires an initial investment of $180,000 and operating costs of $40,000 per year. Expected annual benefits are $130,000 from reduced reconciliation, fewer disputes and faster claims processing.

Annual net benefit is:

130,000 − 40,000 = 90,000 dollars.

For a two-year simple ROI:

ROI = (2 × 90,000 − 180,000) ÷ 180,000 × 100% = 0%.

The project breaks even on a simple two-year basis. At a discount rate of 10%, its NPV is:

NPV = −180,000 + 90,000 ÷ 1.1 + 90,000 ÷ 1.1²

NPV ≈ −180,000 + 81,818 + 74,380 = −23,802 dollars.

Under these assumptions, the two-year project has a negative NPV. Management should not conclude that the technology is useless. It should examine whether the pilot period is too short, benefits are understated, onboarding costs can be reduced, or additional participants can create network benefits. It should also compare the blockchain design with a shared conventional database. The correct decision is based on incremental value over the best alternative, not on blockchain enthusiasm.

10. Case Study: Illustrative Fresh-Produce Provenance Network

Background

The following is an illustrative case. A regional food distributor works with farms, transporters, warehouses, retailers and a food-safety authority. Product recalls are slow because batch records are stored in separate systems.

Problem

When contamination is suspected, the distributor spends several days identifying affected lots. Some farms use paper records, and retailers cannot easily verify harvesting dates or transport temperatures. The cost includes administrative labour, product disposal, reputational damage and potential consumer harm.

Analysis

The problem involves multiple independent parties, a shared event history and a high value for traceability. Blockchain may be suitable for recording batch identifiers, custody transfers and verified temperature events. It cannot by itself prove that a farm entered a truthful harvest date or that a sensor was calibrated.

Approach and solution

The consortium designs a permissioned network. Each participant receives a digital identity. Batch records contain a standardised product identifier and links to off-chain certificates. Temperature sensors sign readings before an authorised gateway submits them. Detailed commercial invoices remain off-chain. Smart-contract rules reject a custody transfer if the batch identifier is invalid or if required fields are missing.

Governance assigns the food-safety authority a verification role but not unilateral control over commercial records. Participants agree on data correction, node operation, privacy, audit access and dispute procedures. Retailers receive a simple interface rather than being required to manage cryptographic keys directly.

Outcome

In the pilot, success is measured by recall-tracing time, percentage of batches with complete records, data-entry error rate, participant retention and cost per shipment. The pilot is expanded only if it improves traceability without imposing disproportionate costs on smaller farms. The case demonstrates that governance, standards and data quality are as important as the ledger.

Learning points

• The blockchain records claims; it does not automatically validate physical reality.
• Interoperability and participant incentives determine network value.
• Privacy may require permissioned access and off-chain storage.
• A measurable operational outcome is more persuasive than a token narrative.
• The conventional database alternative must be evaluated.

11. Challenges, Ethics and Regulation

Scalability and reliability

Public networks may experience congestion, variable fees and limited throughput. Layer-two systems can improve capacity but add bridges, sequencers or new trust assumptions. Enterprise networks offer predictability but may sacrifice openness. Performance should be assessed against the actual service requirement rather than a headline transaction-per-second figure.

Security and operational risk

Smart contracts may contain exploitable logic. Bridges, oracles, wallets, custodians and administrative keys create additional attack surfaces. Controls include independent code review, formal testing where appropriate, rate limits, multi-signature governance, emergency procedures, monitoring and tested recovery plans.

Privacy and data protection

Immutable publication can conflict with data minimisation, correction and deletion obligations. Personal data should generally not be placed directly on a public ledger unless legal and technical analysis supports it. Hashing personal data does not necessarily make it anonymous if the original data can be obtained or inferred.

Inclusion and accessibility

Wallet complexity, transaction fees, unreliable connectivity and loss of keys can exclude users. A responsible application should support accessible interfaces, recovery options, customer assistance and alternatives for users who cannot safely self-custody assets.

Environmental considerations

Environmental impact depends on the consensus mechanism, hardware, energy source, network utilisation and application design. Energy claims should be based on transparent methodology rather than assuming that every blockchain has the same footprint.

Regulation and governance

Relevant legal areas may include securities and financial-services regulation, payments law, consumer protection, intellectual property, privacy, taxation, anti-money-laundering rules and sector-specific licensing. Regulatory classification depends on the asset, rights, jurisdiction, marketing and activities performed. A project should obtain qualified legal advice before public issuance or financial intermediation.

12. Best Practices and Contemporary Direction

Effective blockchain projects begin with a narrowly defined problem and a measurable baseline. They use interoperable identifiers, minimise on-chain personal data, separate technical control from legal ownership, and document governance before launch. They design for failure: lost keys, incorrect data, contract bugs, participant exit, regulatory change and network interruption.

Contemporary development is moving toward modular architectures, account abstraction, zero-knowledge proofs, tokenised deposits, regulated digital assets, verifiable credentials and interoperability protocols. Artificial intelligence may assist with anomaly detection, document extraction, fraud monitoring and operational forecasting. AI does not solve the trust problem automatically: training-data quality, explainability, privacy and human accountability remain necessary.

The most durable applications are likely to be those in which blockchain is largely invisible to ordinary users. Users care about reliable settlement, portable ownership, lower cost and fairer participation; they do not necessarily care which consensus mechanism records the transaction.

Chapter Summary

Blockchain applications are valuable when they address a genuine coordination, trust, ownership or settlement problem among multiple parties. Payments may benefit from continuous operation and programmable settlement, while supply chains benefit from shared provenance records—provided that input data is reliable. Gaming, creator economies and NFTs can introduce portable digital assets and direct relationships, but token ownership must be distinguished from intellectual-property rights. Decentralised social media can improve portability and user control while creating difficult moderation and accountability problems. Tokenised real-world assets require a clear legal connection between tokens and underlying claims. Enterprise ecosystems depend on consortium governance, privacy and interoperability.

A sound evaluation begins with the problem and current process, compares blockchain with conventional alternatives, defines data and governance, assesses adoption and regulation, and calculates incremental economic value. ROI and NPV are useful but depend on consistent assumptions and credible estimates. Technical decentralisation alone does not guarantee business success. Successful applications combine appropriate technology, reliable data, sustainable incentives, responsible governance, regulatory compliance and measurable user value.

Key Terms

Blockchain: A distributed ledger system that records transactions or state changes through agreed validation rules.

Smart contract: Software deployed on a blockchain that automatically executes specified logic.

Stablecoin: A digital token designed to maintain relatively stable value against a reference asset or mechanism.

Tokenisation: Representation of an asset, claim or right through a blockchain-based token.

NFT: A non-fungible token representing a unique digital record, asset, right or status.

Oracle: A service that supplies external data to a blockchain application.

Provenance: Evidence of an asset’s origin, history and chain of custody.

Permissioned blockchain: A network in which participation or transaction authority is restricted.

Consortium: A group of organisations sharing governance or infrastructure for a common purpose.

Wallet: Software or hardware used to manage blockchain keys and interact with digital assets.

Self-custody: Control of digital-asset keys directly by the user rather than by an intermediary.

Interoperability: The ability of systems, networks or assets to exchange information or value.

Network effect: An increase in value resulting from additional users or participants.

Oracle problem: The difficulty of verifying whether external data submitted to a blockchain is true.

Token utility: The practical function or benefit associated with holding or using a token.

Total cost: The combined fee, operational, compliance, liquidity and failure costs of a transaction or system.

Return on investment: A ratio comparing monetary gain with investment cost.

Net present value: The discounted value of future cash flows minus initial investment.

Governance: Rules and processes determining authority, decisions, upgrades and accountability.

Review Questions

Short Answer Questions

1. What characteristics make a business problem suitable for blockchain?
2. Why does blockchain provenance not automatically guarantee truthful supply-chain data?
3. Distinguish token ownership from intellectual-property ownership.
4. Identify two governance issues in decentralised social media.
5. What variables are included in a blockchain payment’s total cost?

Long Answer Questions

1. Evaluate the advantages and limitations of blockchain for cross-border payments.
2. Explain how a supply-chain blockchain should manage privacy, data quality and participant incentives.
3. Discuss the economic and legal requirements for tokenising a real-world asset.
4. Compare permissionless and permissioned blockchain models for enterprise ecosystems.
5. Explain why adoption and governance are as important as technical architecture in blockchain applications.

Analytical / Application Questions

1. A consortium has one trusted central operator and low reconciliation costs. Using the suitability framework, recommend whether it should adopt blockchain and justify your answer.
2. Design a use-case canvas for an NFT-based creator membership programme, including rights, revenue model, governance, risks and adoption metrics.
3. A proposed blockchain project requires $250,000 initially and produces annual net benefits of $120,000 for three years. Calculate the simple three-year ROI and discuss at least three factors that could make the estimate unreliable.

Multiple Choice Questions with Answers

Question 1

Which condition most strongly supports the use of blockchain?

A. One organisation controls all data and participants trust it completely.

B. Several independent parties require a shared, auditable record.

C. The application stores highly private data that must be frequently deleted.

D. The process has no disputes, reconciliation or ownership concerns.

Correct Answer: B. Several independent parties require a shared, auditable record.

Question 2

What is the oracle problem in a blockchain supply-chain application?

A. Blockchains cannot create digital signatures.

B. A blockchain cannot independently verify whether submitted external data is true.

C. Users cannot transfer tokens between wallets.

D. Smart contracts cannot contain conditional logic.

Correct Answer: B. A blockchain cannot independently verify whether submitted external data is true.

Question 3

Which statement about an NFT is most accurate?

A. Owning an NFT automatically transfers all copyright in the associated artwork.

B. An NFT is always a financial security.

C. An NFT can represent a unique asset, right, status or reference, depending on its design.

D. An NFT cannot be transferred after minting.

Correct Answer: C. An NFT can represent a unique asset, right, status or reference, depending on its design.

Question 4

In the total payment-cost model, which item represents the expected cost of fraud or failed settlement?

A. C_fee

B. C_fx

C. C_compliance

D. C_failure

Correct Answer: D. C_failure

Question 5

A project has an initial investment of $100,000 and a net gain of $25,000 over the selected period. What is its simple ROI?

A. 4%

B. 25%

C. 75%

D. 125%

Correct Answer: B. 25%

Question 6

Why might a permissioned blockchain be selected for an enterprise consortium?

A. It guarantees that all submitted data is truthful.

B. It provides controlled participation and clearer privacy management.

C. It removes the need for governance agreements.

D. It always has more decentralisation than a public blockchain.

Correct Answer: B. It provides controlled participation and clearer privacy management.

Question 7

Which is the strongest reason to keep detailed personal data off-chain?

A. Blockchains cannot store any text.

B. On-chain records may conflict with privacy, correction and data-minimisation requirements.

C. Off-chain data is always more secure than on-chain data.

D. Smart contracts cannot reference external information.

Correct Answer: B. On-chain records may conflict with privacy, correction and data-minimisation requirements.

Question 8

In an RWA tokenisation project, what must be clearly established?

A. That token ownership is legally connected to an enforceable underlying claim.

B. That the token price will increase after launch.

C. That all investors can remain anonymous in every jurisdiction.

D. That the asset requires no custodian or legal issuer.

Correct Answer: A. That token ownership is legally connected to an enforceable underlying claim.

Question 9

Which metric is most directly relevant to supply-chain provenance adoption?

A. The token’s speculative market price only.

B. The percentage of batches with complete, authorised records.

C. The number of unrelated social-media followers.

D. The colour of the application interface.

Correct Answer: B. The percentage of batches with complete, authorised records.

Question 10

A positive NPV generally indicates that, under the stated assumptions, what has occurred?

A. Discounted benefits exceed the initial investment and other included costs.

B. The project has no operational or regulatory risk.

C. The project will definitely achieve its forecast cash flows.

D. The technology is superior to every conventional alternative.

Correct Answer: A. Discounted benefits exceed the initial investment and other included costs.