How do I start a cryptocurrency business?

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How do I start a cryptocurrency business?

Cryptocurrencies such as Bitcoin have become big business in recent years leading many entrepreneurs to want a slice of that pie.

After some initial skepticism, cryptocurrency has become more mainstream. The users have identified added benefits in terms of transparency, security, and ease of use compared to traditional transaction methods. 2021 will see some of the world’s most prominent corporations invest further in cryptocurrency, further enhancing its reputation.

While it’s true that launching a new digital currency can be extremely lucrative, you should not see it as just an easy win and a simple way to make money with little investment in time or funds. So, before you set foot in the cryptocurrency world, there are many things to check to ensure you give yourself the best possible chance of doing a profitable business.

1. Find your USP

Before you go anywhere near creating a cryptocurrency business, take some time to check out the competition and find a market gap. Merely replicating what is already available might work for you. Still, if you can find out what current users are reporting negatively on, you can address those issues in your offering. It will be crucial to your marketing strategy once you reach the launch stage.

You must know who your target audience is, as this stage will drive all your production and marketing decisions.

2. Licensing

One of the benefits of cryptocurrency is that it is decentralized. It protects users from bank collapses and extortionate fees and making cross border payments frictionless and free. While some nations are yet to introduce significant oversight for digital currency exchanges, others, including America, already have legislation in place that insists that cryptocurrency operators must be licensed Money Transmitters. It means they must abide by SEC and CFTC rules in addition to some other forms of legislation such as the KYC (Know Your Customer) regulations. 

Therefore, you must seek legal advice to ensure your digital currency holds a license in every jurisdiction in which you plan for it to operate.

3. Adequate funding

Launching a new cryptocurrency business is likely to set you back at least around $100,000. It is a significant sum of money but indicates the type of profits a successful digital currency venture can expect to make. You won’t need all the funds upfront, but you will need to know they are guaranteed.

Starting your business without securing the full funding required will run the risk that you might face delays or even cancellations and lose everything you have put into it.

4. Find a cryptocurrency exchange software provider

To launch your product, you will need a cryptocurrency exchange software platform to host it. Look for a provider that offers an exchange for a one-time license fee. It will give you the full source code and prevent you from paying additional fees or commissions on future deals.

Think about growth and expansion and look for crypto software platforms that allow you to expand your functionality as your business develops or when there are significant changes to the market.

5. Partner with a reputable payment processor

You will need to sign a contract with a payment processor to carry out the transactions. Your chosen partner should demonstrate compliance with regulatory bodies, and your lawyer must check the agreement before you sign off on it.

Fee structures and other costs vary greatly between companies, and you need to know what the partnership will cost you.

6. Connect with other exchanges

There is still a fair amount of skepticism around cryptos, and users sometimes experience a ban when using unknown cryptocurrency exchanges unless they connect to a network of other deals. Don’t be tempted to simulate activity using dummy accounts.

It won’t look authentic and, if revealed, could end your venture before you have got it going.

7. Consider the security

Concerns over money laundering have marred digital currencies. It has prompted governments to introduce legislation to combat fraud and is still a barrier to some potential customers adopting cryptocurrency.

By implementing robust security measures, you will ensure your cryptocurrency business meets regulations, and, over time, you’ll gain the trust of users as digital currencies flourish and the reputation of your company remains intact.

8. Beta testing

Once you have created your company, ensuring it is compliant and secure, it’s time to test it out. Beta testing involves trialing your new cryptocurrency with a small sample of clients to find and resolve any final issues before you release out into the big wide world. For example, the crypto directory Yellow Blockchain project is fully operational but continues to operate under the beta testing stage until it’s considered a full release.

It is a crucial step as it allows you to test drive your digital currency and prevents potentially damaging issues causing reputational damage after the official launch.

9. Marketing for your crypto business

Once you launch your exchange, it’s time to get it noticed. Remember to include your USP in your marketing and use a mix of paid-for and free social media advertising to see what works best. Direct response marketing is a great way to put your product in front of those most likely to become paying customers. Consider using offers and bonuses to attract people but make sure your budgeting is spot-on.

A proper marketing plan is vital for any new business to get customers and evolve.

10. Place importance on customer service

Marketing attracts customers, but poor quality service will mean they won’t stay for the long haul. With cryptocurrency on the rise, the competition will be fierce, and only by keeping customers happy will you be able to retain them. Remember, cryptocurrency exchanges never stop trading, and clients will not want to wait for your staff to wake up and have a coffee before they get a response.

You could look into outsourcing your customer service to remain open every minute of every day to service clients from across the globe. This is a key step for your – or any – cryptocurrency business.

Make sure you have a legal team to keep on top of regulatory changes. Cryptocurrency is new to the field, and the laws and regulations around it are constantly evolving, so you must stay ahead of the curve to remain compliant.

The Takeaway

Before starting a  crypto business, indulge in prior research, find your desired spot on the market, find a good Blockchain software development team, and develop a crypto solution to take over your desired market segment.

We will undoubtedly hear your success story very soon!

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