How to survive in the Cryptocurrency Business

Cryptocurrency Business

Crowdfunding is a very popular way of raising money to get a company off the ground. Through crowdfunding, where people on the internet can contribute toward a specific company or product, it’s possible for your startup company to launch a project at a very low cost.

Initial Coin Offerings (ICOs), on the other hand, are alternatives to crowdfunding. ICOs have the same goal as crowdfunding, which is to raise money for your startup company but transact in a more revolutionary way. ICOs have risen in popularity within the last few years, especially for crypto companies that are based on blockchain technologies, since they allow your business to raise the funds you need without all the legal issues that come with more traditional methods.

What is an ICO?

ICOs use cryptocurrency or digital currency as the medium of exchange. Bitcoin is the most popular cryptocurrency created by Satoshi Nakamoto, which can be bought with a debit or credit card. Bitcoin cash is known as peer to peer electronic cash that trades and pays in the form of crypto tokens or coupons between two parties through smart contracts. A smart contract does not need a trusted third-party such as a bank or other financial institution to facilitate the negotiation, meaning that transactions are easier and the transfer of funds is faster with very minimal transaction fees compared to those typically charged by banks. The value of Bitcoin varies, though, as this depends on current exchange rates and the latest price movements.

With Initial Coin Offerings, you’re basically exchanging coupons or tokens of your own (future) cryptocurrency for current cryptocurrencies. For example, let’s say a company called FutureXYZ wanted to raise money. They could sell a coupon for a future “FXYZ-coin” in exchange for bitcoins and other cryptocurrencies today. If the business succeeds and the FXYZ-coin gains in value, the investor is happy because they get a good return on investment, and FutureXYZ is happy because they were able to raise enough funds to get their business up and running.

Sounds good, right? So what’s the catch?

The catch is that, since this is a great way for investors to make fast money, they are drawn to ICOs like magpies to shiny objects. A recent Forbes Insights study suggests a bright future for the cryptocurrency business. This, however, attracts scammers that just want to get fast investments for their fake idea and bolt with the money.

So, how can you make sure your business stands out and gets the funding it needs while keeping your investors happy and your business successful? Here are some of the basics that make a successful ICO:

Tip 1: Give your project credibility

Obviously, the number one issue here is trust. What basic actions can you take to give your business credibility? You first have to clearly define the purpose of your project. It’s a good sign if your agendas are clear and there’s 100% transparency. Your business plan and your location, as well as each of your team members’ names, should also be available so that potential investors can do their research about you and everything about the project.

You should also remember that as the business owner, your project represents you, so be aware of your online reputation. Potential investors will research companies’ reputation, investigating time to read comments and reviews published on third-party portals or forums like BitcoinTalk, Quora, Reddit, Trustpilot, CryptoCompare.com, and other sites., before they decide on a great project to invest in. While your presence on social media and announcements about the implementation of crypto innovations and cryptocurrency exchange in your business will work for you as word-of-mouth marketing, reviews assure potential investors that they’re investing in a venture that has a clear future.

Tip 2: Build the right team

Just as you do, your team also represents your project. Investors will go looking for information on who is in your team, and who those people are. If they aren’t convinced, they won’t invest.

In order to build your team, make sure you know what their track records look like. Do they support your project and agenda across their social channels? Does their track record suggest that they’re capable of delivering on their ambitions? Do they have any prior blockchain technology experience? Not only will this help you build trust with your investors, but it will also provide you with the technical know-how and expertise in order to correctly implement cryptocurrency into your venture.

Building teams in Cryptocurrency Business

Tip 3: Build a game plan - Make a roadmap

Making a roadmap means writing a great whitepaper. The whitepaper will be the guide that will inform your potential investors about the core foundation of your project. It comprehensively outlines your goals, the complex issues behind your business idea, and the techniques you’re going to use to solve these issues to run the project successfully. A great whitepaper should contain all the details showing why your project is feasible backed up by substantial data, and quantitative information and studies. If possible, provide case studies. By giving a detailed description of the problem and the solution the project is providing, as well as a detailed description of the product itself, people will want to invest in your project. Just like any other person, potential investors wouldn’t want to invest in something they know little to nothing about.

When creating your roadmap, ask yourself these questions: Is the timeline realistic? Does it accommodate for the expected delays that come with developing software? Ideally, an in-depth working plan for the next 12-24 months should be presented and should include at least a beta-launch.

Tip 4: Talk about your tokens

As your crypto tokens will most often be the primary motivation for investors to give you their money, make sure to be as clear and as specific as you can when talking about them. Make sure to include information such as:

  • An explanation of why you’re releasing your own tokens rather than using established ones
  • What you’re going to be using your funds for
  • The number of tokens you will be keeping for yourself
  • The trading volume of your tokens
  • The value of your tokens
  • Dates on which the tokens will be released
  • The date the tokens will be made tradable on exchanges

Keep in mind that all these points will depend on the plans and goals you set yourself in the first place. Complete and logically sound information about your tokens attracts a larger community of potential investors, so make sure that you stand out.

Protect Your Cryptocurrency Business

Tip 5: Protect your business

Any new technology with such huge potential will inevitably attract hackers. Just look at NiceHash back in 2017 that lost around $60million worth of cryptocurrency. What are the steps that you can take in order to avoid such attacks as far as possible, or at the very least, minimize their devastating impact? The following are some steps you can take to protect your business:

  • Don’t advertise online that you trade cryptocurrencies
  • Create strong passwords (consider using tools such as Zoho Vault to store passwords)
  • Use strong and trusted antivirus software
  • As far as possible, avoid managing your cryptocurrencies on mobile
  • Get yourself good Cyber Liability Insurance

Cyber Liability Insurance covers your business’ liability for data breach of private information such as bank account numbers, credit card numbers, and Social Security Numbers. It also covers the costs of recovering compromised data, notifying clients of breach of data, damaged computer system repairs, and restoring personal information of affected clients. Having cyber liability insurance not only protects your business, but it can also be a sign of security and stability for your investors, which will undoubtedly increase their trust and make them more likely to invest in your project.

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