Is there money to be made with cryptocurrencies? That is the question that everyone has been asking but no one seems to know the answer to. There are definitely people who are making money from cryptocurrencies, but are they the exception or the rule? Is the cryptocurrency market worth starting a business in? Or are new businesses doomed to be drowned out by the established players?
If you’re serious about starting a business in the crypto space, then you are going to have to do a lot of research. This article won’t tell you everything that you need to know, but it will point you towards the key areas of study that are most important to success in the cryptocurrency space.
All About Blockchain
Blockchain is the technology that underpins cryptocurrencies and understanding it is vital if you are going to launch a business in the crypto space. The difference between blockchain and cryptocurrencies is analogous to the difference between the internet and email. Email exists on the internet, but it is only one implementation of the technology; there are lots of other things that the data networks of the internet can accomplish.
Blockchain apps are decentralized applications that run on a blockchain network. Most businesses in the crypto space facilitate the exchange of network tokens (the currencies themselves); these are called exchanges. Other businesses provide services that generate revenue and, in the process, network tokens. In order to devise a viable business in the crypto space, you will need to know what a blockchain is and how it works.
All About ICO
Initial coin offerings are the crypto sphere equivalent of the initial stock offering and work along very similar principles. However, rather than buying shares in the business, investors buy the cryptocurrency - or network token - associated with that cryptocurrency’s blockchain. For the Bitcoin network, the cryptocurrency/network token is BTC. On the Ethereum blockchain, the token is Ether (ETH).
However, in order for an ICO to work, the token or cryptocurrency offered by the business has to be useful. If the token can’t be used for anything, it has no value. The purpose of an ICO is to give investors tokens that will eventually be worth something; just as when investors are buying stocks, they want to know that the investment they are making will earn them money. If the coin is not going to be worth more than they paid for it, or serve some other purpose, it loses value.
In some cases, ICOs are much closer to traditional stock offerings in that the tokens distributed during the ICO equate to voting rights. This means that tokens can be traded and the network can become entirely decentralized while still making it easy for participants to vote on any proposed changes.
If you are considering starting your own business, then hopefully you will already have some relevant experience. Of course, you might be one of those rare prodigies who is able to launch a successful business straight after college. If so, more power to you! However, whether you have previous experience or not, it is worth considering taking a business degree or course.
The MBA requires you to have experience in a managerial role, but it is the gold standard of entrepreneurial competence and if you earn an MBA, you will find that a lot of doors are suddenly open to you. Over the course of accredited MBA programs, students will learn everything they need to run a business day to day and to handle the most common workplace challenges.
If you don’t qualify for an MBA, then you might want to consider a similar degree, one that you can study without the requisite workplace experience. There are quite a lot of options for you to choose from in this regard. If you don’t have the time to commit to a traditional campus course, you might want to instead consider studying an online course, which you can attend remotely and on a part-time basis.
The Wild Fluctuations
If you only know one thing about cryptocurrencies, it’s probably from the news reports you’ve seen reporting record-breaking highs and lows in the world of Bitcoin. There’s no getting around the fact that cryptocurrency markets are unregulated and, despite the loudest protestations of many within the community, it is currently far more susceptible to abuse than the regular financial markets.
Individual people and entities account for a plurality of the voting power on many crypto networks, defeating the benefits of decentralization and opening the door to all kind of shenanigans. If you launch your own crypto business and it becomes popular, you can be sure that there will be some people who try to subvert it. Being able to subvert a blockchain network is highway robbery for the digital age. There are potentially millions of dollars to be made if successful.
If you are going to launch a cryptocurrency-based business, you are going to have to be confident in your ability to defend yourself against any attempts to launch attacks on your network.
The cryptocurrency economy is nothing like the regular Forex market. At first glance, a cryptocurrency exchange looks just like a Forex trading ap. However, cryptocurrencies are not regulated in the way that the conventional financial system is. Many of cryptocurrencies’ strongest proponents would argue that this is a good thing.
The problem is that no regulation also means no guarantees. There are no banks or regulatory bodies who will recover any money that is taken from you fraudulently. That means you’re on your own. If you find yourself on the receiving end of some kind of fraud, you will then be relying on crypto exchanges to freeze assets quickly. Of course, you need to notice you’ve been attacked first, and sometimes that takes time.
As long as you have a good understanding of how cryptocurrencies work, so that you are able to assess the value of the individual technology that underpins each coin, you can think about starting a business in the crypto space. Just make sure that you have full confidence in your knowledge before you begin.