When blockchain technology first appeared, it was a novelty that few people could find a use for. Nowadays Blockchain technology is becoming secure and is no longer seen as something intended for a narrow circle of technicians, and its popularity continues to grow every day. Now Blockchain startups are popping up more often than ever before. Let's talk further about how to create a startup on the blockchain and what you need to consider.
What Blockchain Project to Create?
Business leaders need to define what exactly they want to do with blockchain. There is an option to simply launch your own blockchain project, on which to attract users to monetize your services. This option can be very profitable, but it also requires a lot of concentration. At that point, you can face the problem of finding skilled personnel.
Another type of project is a decentralized application that runs on the blockchain. To do this, you can take open-source software solutions and implement them with smart contracts.
The blockchain is needed to decentralize certain processes. So, such business models are suitable for this, where there are several parties exchanging goods or services. It can be legal companies, financial, marketing, logistics, manufacturing, banking organizations, medical, and technological. In short, today blockchain can be implemented in almost any field.
The use of Blockchain technology in business today is becoming almost unlimited, but here are some options for how it can be applied:
- Become a free microtransaction provider. More recently, sending small amounts of money (less than a dollar) via the Internet was almost impossible, since the cost of sending such an amount was higher than the transfer amount. You can come up with a microtransaction system that allows any to easily and quickly transfer micropayments in Bitcoin or Ether. For example, the BlockCypher project released the Microtransaction API, which allows payments to be transferred for as little as 2,000 satoshis, or roughly 0.5 cents.
- Cryptocurrency crowdfunding platform. Like regular currencies, cryptocurrencies provide businesses and individuals with a powerful fundraising tool for an upcoming or existing project. As an entrepreneur, you can also start a business that aims to help people raise cryptocurrency-based funding from a wide donor community.
A crowdfunding campaign allows you to decentralize the funding process by acquiring supporters to provide money upfront. By accepting various cryptocurrencies as a payment method for your campaign, you can further decentralize the situation and reach a global audience.
- Cybersecurity system for cryptocurrency transactions. Tracking digital assets that run on blockchain technology is much more difficult than fiat money in classic payment systems. This is a great bait for hackers around the world, who have undoubtedly found various ways to steal cryptocurrencies from the comfort of their homes. Companies offering cybersecurity tools for cryptocurrency transactions will have a huge demand for their services in the near future.
What benefits can blockchain bring?
The two main responsibilities of blockchain are to protect data and record everything that matters. This neutralizes dependence on a central issuing authority or government intervention. The technology, widely used in financial integration, smart contracts, and tracking goods and transactions, is also a powerful tool in the fight against fraud as records cannot be modified retroactively. Due to the peculiarities of the technology, its development and expansion of the cryptocurrency industry have provided people with many lucrative business ideas.
Blockchain is a relatively new business model that organizations can use to transform their business into a decentralization platform that can change the way their business operates. This changes the nature, the flow of transactions, the profit, and also ensures that growth is maintained during the change.
However, some of the original blockchain business models, such as the BitConnect business model, were nothing more than a Ponzi scheme. There are other models that catch some gullible people. We will ignore all these types of scams and focus solely on legitimate models. Blockchain companies need to look not only at those who invest in them but also at those who do this business so that not only market value but also utility is a concern.
The Blockchain Business Model
The main thing that blockchain provides is decentralization, which eliminates the need for centralized governance. But it happens in different ways. For example, dApps are powered directly through peer-to-peer operations without the center of any intermediaries.
What are decentralized apps changing? When using them, the very principle of building relationships between a company and its customers’ changes, which cease to be two different parties. Here, users are now employees or owners themselves, so they have a completely different impact on the work of the companies involved in this business.
How Can Blockchain Business Model Bring Profit?
In the blockchain business, entrepreneurs can make a profit by using tokens for this. If we take cryptocurrency blockchain projects as an example, then most often everyone who participates in ensuring the operation of the blockchain receives a reward in the form of a token containing value. The value of a token depends on various factors, the main of which is what is happening in the market.
After its release to the market, its value will also be influenced by how your business is evaluated and how effective it is. If you attract investments through crowdfunding, then your first followers get the opportunity to invest in your company and receive income, you and your developers receive the necessary financial support for the implementation of your project.
How to Launch Your Blockchain Startup in 2021?
After you have generated an idea and come up with a way for its monetization, and your MVP (minimum viable product) is created, you need to know about and start investing in it.
Create a short whitepaper, describe in it the essence of the project, all the advantages of your solution, and a plan for further development in order to interest investors. With this document, you can safely go to the specialized forums and post an announcement about the search for investors. In general, by this time you should already have an idea of how much money will be needed for future refinement of the product and the development of the company.
If you manage to competently present your project to investors, interest them so that they will give you the initially necessary amount of money, then you can put them into circulation for the development of your company.
Who Will Build The Product?
If you are an advanced blockchain programmer, then it will not be a problem for you to take write a new platform. But if your knowledge is only enough to update the existing blockchain code, make an add-on for it to interact with the network, and develop an interface, don’t do it. You need a professional competitive solution.
The expert blockchain development team will build the software for you. Such a product will clearly have a better chance to overcome the competitors on the market.
How To Comply With The Laws?
To start your own business and not defy the law, you need to take into account the legal features of doing business in the country in which you are going to start it. To do this, it is advisable to get at least a lawyer in the status of an advisor or consultant for a while, if you cannot afford to hire a lawyer in the state yet.
Moreover, it will be much better if the lawyer is not the first time involved in the creation of a blockchain startup. This will avoid unnecessary claims by the authorities.
What To Do For Project Development?
Once you've created an MVP and raised funds for initial development, it's time to start thinking about advertising. Here, your team needs, first of all, a marketer who will build a campaign to promote your project so that they know about you and people who want to buy your product. No matter how trite it may sound, business is money, first of all. If you don't earn them, your entrepreneurial career will quickly end.
When promoting a blockchain project, it is important to register on forums and sites where members of the blockchain community communicate. It is worth using to the maximum all the powerful potential that social networks provide in today's world.
Also, one of the types of promotion is participation in all kinds of specialized exhibitions and conferences. This will promote your project among the most targeted audience. In addition, at those events, you can make new useful acquaintances. Some companies, after meeting, will add the necessary tool to your solution, others will help to adjust compliance with legal regulations, and still, others may become partners or investors.
The above steps are not yet a guarantee of your success, but this is a rough way that will help you create your own blockchain startup and avoid common mistakes. Try and experiment, as the main thing is not to stop and believe in yourself.
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