Making sense of Cryptocurrency and the Blockchain Technology for Startups
Cryptocurrency and the Blockchain Technology
Over the past few years, blockchain and cryptocurrencies are becoming more than just ‘buzzwords’. Up until a few years ago, these were the words you’d come across in professional or technical forums. Now, it has now become mainstream. Following the Bitcoin-boom of late 2017, practically everyone is talking about them. These conversations have now become dinner-table talks! However, for businesses, particularly startups, these words mean much more than just a ‘buzzword’.
Practically everyone who wishes to gain attention is looking forward to entering the blockchain and cryptocurrency markets. For those who are still new, can look into hundreds of cryptocurrency guides like this one. What makes these words more than mere ‘buzzwords’ is the fact that there is a significant financial impact of using these technologies. Simply changing their name from Long Island Iced Tea Corp to Long Blockchain Corp saw the company’s shares rise by as much as 289%! Kodak, Atari and many other businesses are trying to get their stocks a much-needed boost by tapping the cryptocurrency markets.
How Can Startups Benefit From Cryptocurrencies and the Blockchain Technology
What makes startups different from traditional business models is the fact that startups are often quick at adopting new technologies than traditional businesses. This advantage of being an early mover helps them take advantage of these new technologies.
Startups have much to benefit from cryptocurrencies and the blockchain technology. The arrival of these new, disruptive technologies has changed ‘the game’. Startups now have a new and more effective way of raising funds than ever before. Data is more secure than it ever was. The list of benefits that this technology offers is endless. Let us take a closer look at some of the critical benefits of cryptocurrencies and the blockchain technology for startups.
Perhaps the biggest benefit of cryptocurrencies and the blockchain technology for startups comes with ICOs. Initial Coin Offerings are among the most prominent means of raising funds in 2018. There were over 900 ICOs held in 2017 – a number which is expected to easily surpass that figure in 2018.
ICOs have a number of benefits over traditional fundraising models such as IPOs. In a traditional fundraiser, only accredited investors are allowed to invest. However, ICOs open the doors for the general public to use their cryptocurrency tokens to invest. Startups accept funds in the form of cryptocurrency tokens and they give their tokens in return. Once the ICO gets listed, these tokens suddenly boom in value – giving their capital a major boost.
ICOs have changed the way we know fundraisers to be! While there are a number of controversies associated with ICO fundraisers, with time and regulations, it is expected to get better and become a smoother process of raising funds.
The second major aspect of startups implementing blockchain based systems is for security reasons. Considering the fact that these systems are tamper-proof and cannot be hacked or forged, it gives a major boost to the security of the startups. Data which is stored on a blockchain ledger is encrypted using strong cryptographic protocols which ensures that it cannot be stolen or accessed by anyone who is not intended to access it.
Moreover, considering that blockchain networks are decentralized, it ensures that important business or legal documents stored on a blockchain network cannot be tampered with without notifying the other members of the network. With the use of smart contracts, even physical assets can be secured using the blockchain technology. Startups have much to benefit from these security measures!
For startups, marketing their brand as an innovator and an early adopter means a lot. Every startup wants to claim that they are among the first few names in a particular industry. Cryptocurrencies and Blockchain technologies actually offer startups a chance to be an early mover. Not many major companies are working on this technology, which has major, disruptive potential. This allows startups to position their brand as a key player in this industry that is all set to redefine the future of technology as we know it to be!
To conclude, while these words used to be a means of gaining quick attention over the past few years, the blockchain network and cryptocurrencies have become a force to reckon with – and one that will change the economic order as well as governance in the years to follow. Many startups are making good use of this platform to research into these technologies at a nascent phase – and there’s still time for many more to join the hype-train!