How to do business with cryptocurrencies: The best business models based on cryptocurrencies
Cryptocurrencies have become quite popular. The internet is filled with reports from people that have profited from one cryptocurrency-based business or the other. With the advancement of technology, the number of novel business ideas involving cryptocurrencies or the technology behind it — blockchain — are on the rise.
Everyone is jostling to get a piece of the cake before it gets finished. Truth be told: we have barely scratched the surface.
The reports of people that have lost some amount of money or the other, shouldn’t be ignored. Instead, it points to one fact: going into the business of cryptocurrencies without prior knowledge is dangerous. Moreover, there’s a popular rule of investing: only place your money in a venture you’re knowledgeable about.
With that being said, let’s go straight to the business of the day.
If you’re one who wishes to take advantage of the “crypto boom”, what businesses can you engage in?
Well, I’ll make your options known to you, as clear as day.
Cryptocurrency Trading
This is the most popular. Trading is done on several cryptocurrency platforms like Binance, coin base, and many more. Before choosing one, you should carefully research the exchange/platform because some might be a smokescreen to fleece you of your investments.
Youtube, google, and other search engines are awash with tutorials and guidance on how to start up as a bitcoin trader. But truth be told, it’s dangerous to go into a venture as dangerous as crypto trading, with only knowledge gotten from free sources. You should engage a teacher to put you through. That way, your risk would be reduced.
Developing a cryptocurrency-based payment platform
Many people have touted cryptocurrencies as the money of the future. The future has already begun: many service providers such as freelancers, prefer payments to be made in cryptocurrencies. The reason for this choice is the relative stability it offers as a store of value, compared to traditional money (fiat). Central banks are also considering developing CBDC (central bank digital currencies).
You could develop a payment gateway that makes it easy for employees to pay their workers in cryptocurrencies. Currently, there is no platform meant entirely for this purpose. Security must be of a high standard.
Bitcoin ATMs
Although this is new, the world is slowly cozying up to it. Since 2013 when the first bitcoin ATM was launched in Canada, the number of ATMs installed around the world has been increasing.
Bitcoin ATMs are of two types: basic and complex. For the basic, you are allowed to only make bitcoin purchases while complex Bitcoin ATMs allow the purchase, and sale of bitcoins. Some ATMs don’t limit transactions to only bitcoin. Transactions can be done in other cryptocurrencies too.
Bitcoin ATMs are similar to any other ATM, except that they exchange real money for cryptocurrencies and vice versa
As of January 2021, the USA has recorded the highest number of Bitcoin ATMs. They are closely followed by Canada, the United Kingdom, and Austria.
Mine Bitcoins
As quantitative easing is to fiat, so is bitcoin mining to bitcoin. In simple terms, bitcoin mining is a process of creating new bitcoins by solving very complex computational maths problems.
It’s sort of a reward system. The fastest person to solve the equation gets a specified amount of Bitcoin as a reward in addition to commissions from transactions.
On average, it takes at least 10 minutes to mine one bitcoin.
Although profitable, you have to consider two things:
- Cost of equipment
When bitcoin launched in 2012, you could mine on your personal computer. That is long gone. Now, Bitcoin miners use complex, powerful computers.
- Power consumption
The power consumed in operating and cooling these computer systems makes bitcoin mining capital intensive. To increase profits, you can find other cheaper sources of power such as geothermal, solar, and many more.
Another detail to take into account is to consider the duration of the ASIC. Due to the continuous development of specialized systems, they can become obsolete in a very short time.
Guarantee agents
Guarantee agents serve as mediators in situations of conflicts between a buyer and seller when any commercial or business management is carried out.
If you have experience in these types of issues, you can offer your services as a mediator between the two parties and guarantor so that the agreement is fulfilled.
Consulting firm
If you are an expert in cryptocurrencies or blockchain technology, you can create a business model based on advising other companies. Many companies and businesses wish to integrate cryptocurrencies into their businesses but are unaware of how to go about it. That’s where you can come in.
You can also offer training courses or give talks and conferences around the world.
Create easy-to-use tools
Normally the tools that are used within the world of cryptocurrency trading are quite complex and only within the reach of people with great programming knowledge.
Creating bitcoin trading tools that any merchant understands and can use is a good business model.
Inventing cybersecurity systems for transactions
The fact that blockchain technology is extremely secure attracts hackers from all over the world like a magnet when trying to find a “hole to sneak through”.
Launching a company that offers tools that maintain the security of cryptocurrency transactions is a business plan with a lot of future.
Grant bitcoin peer-to-peer loans
Also called P2P or peer-to-peer loans, to grant loans between bitcoin pairs, you have to create a platform that offers a type of lending with cryptocurrencies to individuals and small and medium-sized companies without any type of intermediary and for which you would receive profits.
Thanks to smart contracts, the granting of loans is safe and can be done from anywhere in the world and without the need for a bank to be involved.
Freelance writing on crypto-based topics
Just like I’m doing now, you could share your knowledge of cryptocurrencies with the world by writing for blogs and companies.
Many companies are looking for crypto-experts to contribute or spearhead their content marketing campaign by leveraging SEO strategies. Social media posts, marketing documents, sales copies, and the likes are also in high demand.
The list of cryptocurrency-based businesses is endless. There are even more, yet to be unearthed. The potential is limitless and you shouldn’t be left out.
