The 21st-century technology paved the way for the creation of cryptocurrency or crypto—purely digital currencies created through blockchains. These are assets that can be used to buy and sell products, as well as directly transact with other crypto holders without needing to go through central authorities.
Bitcoin, Ripple, Ethereum, and Litecoin are only a few of the many cryptocurrencies in existence. In essence, their use is similar to that of traditional currencies like USD and EUR, but they no longer have to go through middlemen like banks and other financial institutions.
That’s why many forward-thinkers believe that cryptocurrency and blockchain technology is revolutionizing the finance industry. Unlike the transactions through traditional intermediaries, there are minimal to no costs associated when dealing with crypto because it uses a peer-to-peer medium of exchange.
This can also be the reason why aspiring entrepreneurs are drawn to the potential of this business. Not only is cryptocurrency outside the scope of the government’s threshold, but it also has the ability to democratize the finance industry. If you’re interested in penetrating this growing industry, here are three practices that you must know:
Modern Approach to Gaining Capital
Nobody can start a business without capital because all entrepreneurs know that to generate a profit, they will first have to invest money. The traditional methods of building capital to start a business can either be to borrow money from lenders or seek out potential investors and venture capitalists.
However, these traditional lenders might be harder to persuade to invest in your company because the cryptocurrency market itself is highly volatile. This means it comes with more risks for you and your potential investors. A smart loophole to this dilemma is the creation of initial coin offerings (ICO).
With ICO, startup crypto companies can raise money to develop their new blockchain and crypto technologies by selling digital tokens or “coins” to their investors. These coins can then be used by the investors however they please. This is an alternative to issuing equity or shares of ownership from the company.
Effective Marketing Strategies
It’s important to note that no business can succeed in its chosen industry without tackling the marketing aspect of a business. A business that fails to accommodate a need in the market will simply lack purpose, and therefore, will cease to exist. For you to succeed, you will need to build patronage.
That being said, even crypto and blockchain companies will need to devote time to marketing their business to attract their target audience. This can be done by focusing on their media relations, crowdfunding campaigns, and social media marketing strategies in place.
If you plan to take the ICO route when raising your capital, then you will need to adapt your marketing strategies to achieve your goal. A great way to do this is by learning the ins and outs of ICO public relations, as well as how you can effectively attract potential investors through marketing campaigns.
The world of cryptocurrency and blockchain technology is filled with buzzwords, jargon, and complex concepts that can be difficult to grasp. That’s why it’s vital to keep your campaigns simple because not everyone is well-versed in the topic of crypto. If you want to cater to a wider audience, you will need to communicate with them in a language that they can understand.
Multilevel Security Protocols
Cryptocurrencies use an encryption technique called cryptography for security. In a nutshell, cryptography allows developers to exchange data safely through the internet by converting them into an unreadable format that requires a key to be unlocked. And only authorized entities will have access to the decrypting key.
It is a known fact that everyone who has access to the World Wide Web has the potential to be targeted by cybercriminals, and because crypto companies deal with valuable digital assets, they are more likely to have a huge target on their backs. That’s why these companies need to have multi-level security measures in place.
Even though cryptocurrency transactions are almost completely anonymous because of the complex blockchain technology, crypto companies still have no immunity from having their data stolen by hackers. Private keys and secure passwords can also be manipulated when they fall into the wrong hands.
As such, startup crypto companies must work double-time to make sure that their investors and currency holders are protected from cyber-attacks. Data privacy and safety are not only problems of the crypto or blockchain industry, but all industries.
Cryptocurrencies are still in their infancy stage, even if they have been in existence for more than a decade. While the knowledge surrounding this complex fintech fad is still restricted to a small population, there is hope that one day, more people will see the potential crypto has for revolutionizing finance as the world knows it.