What’s ahead for crypto startups?

Crypto startups: what's ahead?

 

2017 was the year when blockchain and cryptocurrency startups truly took off. The explosive growth that we’ve seen over the past few years shows no signs of slowing down in 2018, but the nature of this new trend could be changing before our eyes.

 Here are just some of the trends that crypto startups will consider as they work to grow their businesses this year and beyond.

 

Three Ways to Buy Bitcoin

 

If you’re new to cryptocurrencies, one of your first purchases will likely be bitcoin. There are three ways to buy bitcoins: face-to-face, through an online exchange, or directly from a broker. Whichever option you choose, make sure you do your research before deciding which company to work with.

And don’t worry about fees – in almost all cases, they are significantly lower than those charged by traditional financial institutions such as banks and credit card companies.

 

There will be a new Amazon in the crypto world

 

One of the most exciting use cases for cryptocurrency is online marketplaces. People want to buy, sell, and trade products and services online, and platforms like Amazon, eBay, and Alibaba have already captured much of that market.

 Blockchain makes it possible to imagine decentralized versions of these platforms – in which you could buy a book from a stranger without a middleman taking a cut.

 There are several very early-stage platforms aiming to do just that. Tron, an upcoming blockchain platform from Chinese developer Justin Sun, will offer an e-commerce solution as part of its suite of services.

 

The past doesn't predict the future, but it's a good place to start

 

Remember, 2013 was a crazy year for cryptocurrencies. Bitcoin—the original cryptocurrency—had only been around for a couple of years, and it was worth less than $1 when one bitcoin was first exchanged for pizza in 2010.

A few years later, by early 2013, bitcoin's value had skyrocketed to over $1,000. Then in November 2013, bitcoin peaked at over $1,100 per coin before losing half its value overnight (this is known as The Great Bitcoin Crash of 2013).

And then within two weeks of crashing 50 percent in value (and losing 80 percent of its market cap), bitcoin traded back up above $900 again—all on dramatic news events that seemed like they could have been made up (China bans banks from using bitcoins!, Mt.

 

Beware of ICOs

 

Just think of it as an automated public ledger that keeps track of every transaction made across a network—which is to say, nearly every transaction on Earth.

 Cryptocurrencies like Bitcoin are built on blockchain technology and have already begun disrupting big industries, from real estate to banking. The revolution might not be televised, but it will be distributed online. And in some cases, decentralized. We’re only just beginning to understand its potential...and limitations.

 Every business and industry will likely experience disruption in one way or another—some more than others—but we’re still years away from seeing how things shake out. Here are three industries that could see major changes over the next few years as new solutions based on blockchain and other emerging technologies emerge...

 

I think we can all always agree on this...

 

Cryptocurrencies are becoming a more popular asset class, and as investors look for ways to diversify their portfolios, they are starting to take note of cryptocurrencies.

 According to Coindesk, in 2017 investors put over $1 billion into cryptocurrency projects, and with crypto sales growing exponentially each day, that number will likely only increase in 2018. On top of growing investment interest in cryptocurrencies as an asset class, we're also seeing massive venture capital investments into cryptocurrency start-ups.

 In 2017 alone over $400 million was invested into blockchain and cryptocurrency-related companies – but 2018 is expected to break all previous records.

What does it mean?

 

Keyword watch - decentralized, identity management, and smart contracts

 

Technologists may dismiss keyword search as nothing more than a way to sell ads. But in fact, it’s become increasingly difficult for technologists to keep track of everything that’s happening at once.

 To be sure, you can follow Twitter feeds and RSS feeds and Github activity, but there are also mailing lists, meetups, and one-off workshops to keep up with.

It’s no wonder so many new things get lost in a deluge of information and innovation moves too fast for most people to understand what is actually going on or why it matters.

 Keyword search provides an ideal platform on which technologists can make sense of developments across multiple industries or fields of study all at once.

Blockchain technology takes control away from banks, governments, etc.

 This results in a system that's more transparent and trustworthy (because it’s decentralized) as well as resistant to outages (because it isn't dependent on anyone's server).

 To learn more about how blockchains work, check out our beginner's guide to bitcoin, cryptocurrencies, and blockchain.

A quick recap - don't invest in things you don't understand!

Starting a business is extremely—especially if you're borrowing money from investors or otherwise your own savings to do it.

That said, it can be tempting to use your new startup as an excuse to earn more money and spend frivolously—but that just increases, creating a vicious cycle. Instead, set small, attainable goals for your time and money.

 Make sure you have a clear vision of how much time you want to devote to working on your business; then, map out how much money will support that effort without raising any red flags for banks or lenders.

 A great starting point is about 20 hours per week. If making $250 per month does that for you now, stick with it until you see momentum growing in line with those expectations.

Don't let greed ruin your life (this time!)

There are hundreds of cryptocurrencies available today, but as a general rule, none of them have any value. So it’s tempting to look at all of these new coins and feel like you missed out on something—and that greed might just push you into buying one.

Don’t do it! Cryptocurrencies are no different from tulips, Beanie Babies, or gold: they only hold value if people agree that they hold value. If a cryptocurrency loses popularity, its value will plummet quickly.

So only invest in cryptocurrencies if you can afford to lose all your money!

 

Conclusion

Crypto startups are a true hybrid of traditional ventures and blockchain-based businesses. Because their future is less certain, it’s important to have a complete understanding of crypto business models before entering into one.

Remember that crypto business models have many similarities with standard startup models but also some major differences. Our hope is that by reading through our guide, you will be better prepared for how these companies function.