Last updated on July 28th, 2015 at 03:49 pm
The Bitcoin ecosystem is one of the largest growing communities in the world economy right now. Many have joined and plenty more are waiting in line to start their Bitcoin startups. That is why we are discussing some of the most fundamental steps when establishing a cryptocurrency-related business.
The advice below has been shared by various experts around the industry who have tasted success thanks to their own ventures and are now helping those interested in investing in the Bitcoin universe.
Know your market
Before entering the Bitcoin industry, one of the most important things that one should do is to understand the market and know whether their products will have demand or not. They should also be able to establish whether this growth will be sustainable. This calls for proper and thorough market research so as to understand it and the dynamics associated with it.
- CEO of BTC.sx, Joe Lee.
Comply with all regulation
This is one area that many startups choose to ignore, but not even the cryptocurrency ecosystem can escape from government regulations and business policies. Being compliant will protect not only your business, but also your clients from any government clampdowns. Furthermore, compliance will win you the trust of more and more clients and in the process your business will grow further.
- CEO of Ribbit.me, Gregory Simon.
Avoid using crowd sales
Despite their popularity as a way of raising funds for startups, market gurus warn against relying on them. This is because their varying terms of sale may lead to problems with the authorities and losses among investors. It is only advisable to make use of them if the crowd sale is being used to market a product that is represented by the token, rather than equity.
- CEO of BnkToTheFuture.com, Simon Dixon
Decentralize your company
One of the reasons why traditional financial institutions such as banks fear Bitcoin is due to its decentralized features. This is because decentralizing all aspects of your company is one of the most effective ways of not only increasing its security, but also its flexibility, turning your business into a big competitor. Doing this will eliminate the great danger that is posed when you store all your data and managing all operations from one place. It will therefore attract you more tech-savvy and security-conscious clients who understand the importance of decentralization.
- CEO of Bitnation, Susanne Tarkowski
Beware of hackers
One of the worst mistakes that the owners of a startup can do is underestimating the threat that hackers pose. Blockchain.info learnt this lesson the hard way last year when, luckily, a white hat hacker compromised their systems and stole 250 BTC. It is therefore important to adopt security strategies that will protect your company from these virtual criminals like hiring hackers to perform tests (such as trying to access your system and searching for weaknesses). Another effective way is shielding your startup from attack in the first place by making sure all your Bitcoins and important data are stored offline.
- CEO of, Bitrefill, Sergej Kotliar
Diversify your business
A common narrative is that, in spite of its current success, Bitcoin may not be reliable in the long run. This is because there are other cryptocurrencies that may grow and take over the fintech space. There are plenty of reasons to build a diverse business model, which will allow you to evolve according to the changing landscape. One is the possibility of Bitcoin losing favour among users and therefore losing value. In addition to this, there is a high likelihood that, in the future, industry-specific cryptocurrencies may significantly eat into the Bitcoin market share, especially among millennials.
- Founder of Toast, Aaron Siwoku