04 Aug 5 Things to Know Before Starting a Cryptocurrency Business
Bitcoin. Ethereum. Ripple.Â
Do these names sound familiar?
In the last 5 years, these names have become commonplace. Theyâre cryptocurrencies and some people have made fortunes after mining them.
But what exactly is a cryptocurrency?
In laymanâs terms, it is a type of digital money. It works and functions just like real money only without its physical counterparts i.e. coins and banknotes. Cryptocurrencies exist in electronic form only, which is why theyâre very secure and cannot be duplicated or counterfeited.
If youâre planning to launch a cryptocurrency startup, here are 5 things to know beforehand.
- Â What costs are involved?
If you are a competent C++ programmer, you can create a new cryptocurrency without the financial backing of any sort. The core code is provided for free on Github and it can be used to build unique cryptocurrencies with adjusted hashes.
The expense factor comes into play when businesses gear up to market their cryptocurrencies because the success and popularity of these currencies start only when people begin using them.
- Â What is the target market?
As long as the currency is defined and can be used for peer-to-peer currency, it can have any target segment.
- How will the startup make money?
Most businesses make money through Initial Coin Offerings or ICOs. These are similar to the stock market’s initial public offering or IPOs. An ICO can usher in a one-time influx of cash through currency sale and the business hopefully gains value with the popularity of their cryptocurrency.
- How much should the crypto-coins be sold for?
While most coins have extremely low starting values, cryptocurrency businesses are free to choose any amount that they want. Some developers opt for incremental pricing to entice their early adopters. Post ICO, the price of cryptocurrency is determined by the market demand.
- What ongoing expenses can be expected for the start-up?
Apart from the energy required to run the computer algorithms that cryptocurrencies rely on, the ongoing expenses are fairly minimal. The miners even pay for this energy, because theyâre rewarded with cryptocurrencies.
Hopefully, you now have a better sense of how to go about your cryptocurrency start-up. Do share your business and currency names with us in the comments below.