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6 Reasons To Create Your Own Cryptocurrency
Blockchain and cryptocurrency have become increasingly popular as the technology matures we begin to see more use cases and money being pumped into the sector. There are now thousands of cryptocurrencies and tokens available and several blockchains running as a support structure for these cryptocurrencies.
Bitcoin was the first use case and is seen as a financial tool where other cryptocurrencies are looking to target various niches from gaming, social media, payment, eCommerce and more. Cryptocurrency has been dubbed as the catalyst for building web 3.0 and each business, or digital project will want to use the technology for various means.
So why would someone want to create their own cryptocurrency? Here are the most popular reasons for opting for this new technology.
1. Raising capital
Starting a capital intensive business is not easy and trying to get into the offices of venture capital firms or angel investors to try and pitch them is hard enough for most tech companies. You need to meet plenty of rules and if you're not in their risk portfolio or they cannot see your vision as it won't give them the returns they want in the future such as a community project you may fund this stumbling block far to steep and many projects tend to die at this hurdle. Once can only bootstrap so far before your burn rate eats into your runway.
Instead of looking at selling your equity to traditional investors, you can look at a public capital raise via methods like an ICO or IEO. Using a blockchain to fund your project means you have access to a worldwide pool of investors and you're no longer restricted to your location or even your local currencies exchange rates or geopolitical issues.
2. Rewarding users
In any new tech startup user, the acquisition phase is a pain point that they all have to face. This issue can be alleviated by aggressively marketing your business through channels like Google and Facebook, but it does not green use acquisition and retention. Using a cryptocurrency, you can encourage users to join your platform, log in, use certain services or perform specific actions that could earn them various values of your token. You can use the reward system to encourage users to do multiple things that will make your platform more accessible, like sharing on social media or rewards for referrals.
3. An "in-game" currency
If you're creating a game, you may have some way to earn points, loot, jewels, cards, tools or any digital item that can be used in your game. These items can be digitised on the blockchain and could then be tradeable with other users for value, and your token would be the way they trade. They could buy and sell items with other players as well as with your games shop of items.
Cryptocurrency allows real funds to become in-game funds and vice versa bring value directly into your game without you having to push the purchase of items on users constantly.
Gamers may also be encouraged to know that their efforts and rewards they get can be used for financial rewards down the line and set you apart from similar games which do not reward their users in this manner.
4. A utility token
A utility token digital token or cryptocurrency that is usually issued to fund the development of the currency, but then also used as the natural way to trade inside the platform. Since it can be used later to purchase goods or service offered by the issuer of the cryptocurrency sold utility tokens as a method of fundraising for the start-up with the idea that holders can either sell or redeem it for services they want once launched.
Utility tokens make it easier for you to gauge the amount of user interest in your project as you can tell from the number of active wallets holding your currency. Once your product is live, you can bank on a high percentage of those users will be willing to try out your product or service and makes for an amazing marketing tool and lead qualifier.
5. As a purchasing settlement layer
If you're running an eCommerce based business, you should know all about the pain points of accepting purchases with credit cards, bank deposits, debit cards or even digital transfers such as PayPal. Each payment provider has its own API that requires costly management and often manual intervention, especially when it comes to charge-backs and refunds.
These payment issues can cost startups millions and end up destroying the user experience by no fault of the business. By opting for a cryptocurrency, the payment and settlement layer is all done on the chain with record-keeping all done automatically, and payments are made instantly. Refunds can also be done as simply and can really cut down on costs of running your eCommerce startup.
6. Cut out middlemen
Using a blockchain can also cut out the middleman in various ways such as running your web domain on a blockchain domain, you will no longer need to pay your hosting fee each year or be worried your domain could be taken from you since you now own it outright.
You could store text or asset files on chains like IPFS instead of using cloud service providers, and you can also remove middlemen when it comes to development as open-source tech can be found for all blockchains and can be migrated to yours at a reduced cost, rather than getting someone to create code you need to fit to your central database and tech stack.
Using a blockchain will give you access to a host of free code from the open-source community that can help you build a more affordable and superior product.
Building on the blockchain
As you can tell, this is only the beginning, and there will be more ingenious ways to leverage distributed ledger technology as the industry matures. That being said, even the more established methods of use are no guarantee of success and using a cutting edge technology will come with distinct teething issues and growing pains.
Moving into the blockchain space is not the easiest route, and there are various levels at which it can be used or combined with centralised databases and services. It is up to you and your team to decide how you will integrate blockchain and cryptocurrency into your project to try and provide a superior product.
If you would like to know more about digital assets or would like to market your digital asset company then don’t be shy we’re happy to assist. Simply contact us
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If you require a more detailed guide on how to create your profile or your listing, then we highly recommend you check out the following articles.
If you enjoyed this post and have a little extra time to dive deeper down the rabbit hole, why not check out the following posts on cryptocurrency and blockchain.
- Why Blockchain and Cryptocurrency Is The Future Of Money
- 24 Ways To Earn Cryptocurrency
- How To Pay Tax On Cryptocurrency In South Africa
- How To Buy Bitcoin In South Africa
- Why Does Your Bitcoin Wallet Address Keep Changing?
Disclaimer: This article should not be taken as, and is not intended to provide any investment advice and is for educational purposes only. As of the time posting the writers may or may not have holdings in some of the coins or tokens they cover. Please conduct your own thorough research before investing in any cryptocurrency as all investments contain risk.