Thursday, September 16, 2021

The Beginner’s Guide to Crypto Business Ideas

20% of US adults, around 46 million people, say they would make a purchase with cryptocurrency. 

While many ideas for crypto businesses center on creating, exchanging, or brokering different digital currencies, it’s possible to build a crypto business in any niche. Household names like QuickBooks, Shopify, Visa, and MasterCard are making it easy for shoppers to use cryptocurrencies. 

Businesses in any industry can better target specific audiences and niches just by incorporating crypto. As the popularity and ease of use for digital currencies grows, businesses in retail, ecommerce, and manufacturing can gain a competitive advantage by adopting and using this new form of money. Businesses looking for more data security, like health and finance, are also excellent industries for crypto business ideas. 

If you’re not into engineering, trading, or investing, this guide to crypto business ideas has some practical tips for you. Get ready to profit from one of the hottest innovations of the 21st century!

What Is a Crypto Business?

A crypto business lets customers use cryptocurrencies to buy products or invest in businesses.  

Crypto business ideas are becoming more popular due to some digital currencies like Bitcoin and Ethereum having been around long enough to build trust. Over 2,300 US businesses accept Bitcoin, and that number is rising sharply each year. 

Many founders see crypto as the next wave of technology. Smartphones changed the way people use the internet and experts believe that almost 73% of global users will exclusively use mobile devices for internet access by 2025. Many expect crypto to have a similar impact on the way people approach financial management and digital security.

The Basics of Crypto Business Ideas

There are a few aspects of this new technology that make it a valuable addition to any startup.

Crypto is easy to transfer

Crypto technology makes it easy to transfer funds directly from the customer to your business without a bank or credit card in the middle. This allows crypto businesses to avoid some costly processing fees. It also saves time, because bank transfers take two to three days on average. 

Crypto offers wider access

Digital currencies also offer access to credit that many individuals don’t currently have. Whether it’s a lack of financial history due to biased systems or national policy, crypto is credit and location-independent. This makes it an ideal currency for global businesses.

Cryptocurrencies offer great security

The security is because of their use of blockchain. A blockchain is a type of database that stores information in a series of connected blocks. Each new group of data fills a new block, and that new block becomes part of the chain of information. 

Experts state that Bitcoin and other cryptos are more secure because of how they’re built.  Instead of a single clump of information that can be easily changed, stolen, or damaged, each block of information in a blockchain database stays separate. This makes it more secure.

For example, a typical credit card application collects customer information, including but not limited to:

  • Home address
  • Birthdate
  • Parent or partner names

If that credit card has a security breach, there is more than enough information in their database to use the stolen information to make illegal purchases. A blockchain stores sensitive data separately, making it more difficult to steal and use. 

Also, crypto purchases are always final once authorized. This is great for small businesses who have challenges with customers canceling charges through their banks or credit card companies after a sale. Once a customer approves a purchase with crypto, it’s final.

It’s mostly decentralized

Cryptocurrencies aren’t controlled by governments, and most digital money’s value is not tied to national policies. Some governments have recently started creating their own cryptocurrencies.

Crypto can be challenging because exchange rates can jump and fall quickly. This means that when you sell and buy with crypto, its value can change daily. Cryptocurrencies offer a chance to build capital quickly but can also be risky to use. 

A quick note: Crypto is currently considered property by the federal government, so it is still taxable income. It’s just not taxed in the same way as traditional currency, like the US dollar.

Crypto education is on the rise

As more entrepreneurs get involved with digital currencies, more crypto products become popular and require widespread cryptocurrency education. There are many opportunities to educate new users on the history of crypto and how to use it. You can develop educational guides, online courses, and other learning resources, no matter your current level of knowledge.  

Most people won’t create the next Bitcoin, but you can turn any business idea into a smart crypto business with a little research.

3 Tools To Launch Your Crypto Business Ideas

When you’re ready to launch your new idea, you’ll need an easy way to accept digital currencies. These three tools are popular with businesses and customers accepting and using cryptocurrencies today.

1. Coinbase Commerce 

Coinbase Commerce is a tool that allows businesses to accept crypto for a wide range of products and services. It also includes invoice features, a simple API that integrates with popular ecommerce platforms like Woocommerce and Shopify, and reporting tools to help with accounting. Users say set up and use is quick and straightforward. However, this tool doesn’t accept every form of crypto. Take a careful look before signing up to ensure that the most popular currencies in your niche are available on the platform.

2. Coinpayments 

Coinpayments has been around since 2013, and over 70,000 businesses use it to accept crypto. This tool offers businesses extensive plugin and button options, including shopping cart plugins from Ecwid, Magento, and Shopify. They also support over 1900 different currencies. It’s quite comprehensive if you are crypto-savvy, but this app may not be as easy to use as other tools if you are new to crypto.

3. Bitpay 

Bitpay makes it simple to collect crypto from customers no matter where they shop. Direct deposit is available in over 35 countries. Thousands of businesses, including Microsoft, Twitch, and Shopify, use Bitpay, and they have a good size list of integrations. A quick note if you’re a beginner: user reviews show that this tool isn’t too strong with one-on-one customer support, and so it may be a better option for enterprise-level businesses.

Other blockchain applications may also be helpful additions to your business tech stack depending on your industry and niche.

5 Tricks for Crypto Businesses

Starting a crypto business is the same as starting any other kind of business, but there are a few areas where you’ll want to do some extra research. 

These tips can help you figure out big points to consider and where to look for help as you develop your business ideas.

1. Learn about the costs, requirements, and potential risks of using cryptocurrencies.

Tax regulation is already a challenge for many business owners. Governments around the world have different approaches to crypto adoption and regulation. Experts believe that regulation for crypto businesses is coming soon. 

If taxes aren’t your strength, search for an accountant or CPA who is familiar with crypto. You’ll also want to keep up with tech finance news. This way, you can track the changes that will matter most to your business.

Businesses that accept digital currencies may have more requirements for state licensing and registration. They may also need extra legal counseling. As you go through the steps it takes to launch your business, check for any additional steps your state requires specific to crypto businesses.

For example, paying employees in crypto could be a great way to show great prospects how innovative your business is, but it may not be legal in your state.

Every state and industry will have different requirements, and these details might be hard to find, so be sure to ask for professional help if you run into challenges.

2. Think about business ideas for luxury buyers.

Expensive one-time purchases can be a tough sell. They’re also great business ideas because current crypto users are interested in the newest technologies and are comfortable with innovation.  For example, in March 2021, Tesla widely publicized that it would accept Bitcoin for car purchases. The brand shifted course a few months later, but that hasn’t stopped other car dealerships from offering purchases with cryptocurrency.

Offering crypto as a payment option is a smart strategy if you want to sell products in a cutting-edge or luxury niche. It communicates your willingness to experiment and take risks to customers who will appreciate and respect that choice.

3. Define your crypto audience.

Keep in mind that as you narrow down your crypto business ideas, different currencies are useful for different purchases. 

If you’re buying clothes online, you don’t want to make that purchase with Bitcoin. This is because the value of Bitcoin changes every day, like stocks on the stock market. 

A quick example of this: If the coin you’re spending is worth $10 that day, you can buy a $10 t-shirt with that coin. If that same coin is worth $100 tomorrow, you just spent $100 on a $10 t-shirt, and there’s no getting it back. 

Most people collect Bitcoin for trading and selling, then use other currencies for day-to-day purchases. Some prefer to use stablecoins because they tie to government-backed currencies. For example, Tether’s value is backed by the US dollar.

Cryptocurrencies also offer a branding opportunity for new entrepreneurs. If you plan to start a B corp, you might want to use crypto like CHANGE that makes charitable donations with each transaction. 

Environmental experts have raised concerns about the high amount of electricity used in the mining of Bitcoin and other digital currencies, so if you’re starting an eco-friendly business, Chia Coin offers a green alternative to mining called farming. 

It’s a smart idea to align the crypto your business uses with the identity and vision of your company.

4. Build a business that values privacy.

There are books, videos, and other products that may embarrass buyers. Making purchases by credit card can sometimes broadcast these purchases to banks and their partners. They also create records online that can make buyers less comfortable with their purchases.

With crypto, buyers use a crypto wallet for transactions, but these wallets aren’t connected to personal identity. This means that crypto is great for purchases that customers want to make confidentially. 

5. Accept more than one type of cryptocurrency. 

As of August 2021, there were over 5,800 unique cryptocurrencies, and the number of currencies is in constant flux. Because these currencies are new, the value and policies for each crypto can change quickly. Your business will assume less risk if it isn’t tied to one single form of digital currency.

The more cryptocurrencies your business collects, the more opportunities you will have to enjoy this disruption of traditional finance long term, so hang on to some of your coins, and don’t make exchanges right away.

What To Do Next

You’ve chosen the right crypto business idea and are ready to accept crypto payments. Now you’ll want to nail down the next steps to build your business. 

Accepting crypto is a brave choice, and you should incorporate it into your value proposition. This statement shows your customers that you had them in mind from the moment you created your business. Whether you’re building your first website or choosing the right ecommerce platform, you’ll want to make sure the crypto that’s essential to your brand is easy to use online. 

Accounting software is also crucial for businesses using crypto because of how this currency’s value can fluctuate. The right tools can make it easier to use and track your crypto usage and exchange rates.  

Crypto is a fast-changing industry, so you’ll want to stay in the know. One strategy that can help keep you up-to-date as you grow your business is connecting with a mentor. This guide, How To Connect With Mentors To Build Your Personal Brand, can help you find the right mentor as you build your crypto business.

from Quick Sprout