9 tips that will help you launch a profitable crypto startup
The number one cryptocurrency experienced a 59 percent growth recently, proving to be the de-facto currency that investors can rely on.
Digital currencies have made many exchanges spring up recently. Unfortunately, most of them don’t know what it takes to the business successfully. As a result, they end up not gaining customers’ trust, while some lost their hard-earned money through them.
Therefore, it is important to know these 9 necessary steps to take before embarking on the cryptocurrency business as the industry continues to grow further.
1. Obtain proper legal counsel
This will help you to ensure that the licensing requirements are met. After formulating your plan, before setting it in motion, seek legal counsel to understand the regulatory demands of the venture, being that it is new.
With proper licensing, you will know the jurisdictions in which the company can operate. One of the challenges the industry is facing is that many cryptocurrency exchanges are operating without significant oversight. So, don’t go against the government and regulation, which will soon cash up with technology.
For instance, in the US, cryptocurrency operators must be licensed Money Transmitter businesses and follow SEC and CFTC rules and regulations.
Therefore, you must get proper legal counsel to help you adhere to Know Your Customer (KYC) regulations as the industry continues to combat money laundering.
2. Get the required funding
Before going into this venture, you must have a deep knowledge of the approximate costs involved.
For instance, to start and develop a cryptocurrency exchange, you need a minimum of $135,000, including the cost of technology, hosting, some initial legal counsel, government registration, and initial advertising.
You might not need all this funding upfront, but it is important to ensure the venture has access to enough capital to allow a proper runway.
So, it is therefore important for you to plan for the future to avoid the same mistake made by many start-ups who landed small initial raises that covered the costs of the development but later left the venture without the critical operational cash.
3. Use a leading technology solution provider
As the venture is technology-driven, you must find a stop technology solution provider. These outfits charge a one-time license fee without royalties or commission structures.
Since there are no ongoing fees, clients will host the exchange themselves and receive the full source code. This is essential for auditing purposes because some regulators will request to inspect the source code.
4. Connect your exchange with other financial ventures
In a bid to have added liquidity, you need to connect your exchange with others. This will make prospective investors want to put their cash and maintain an open order book and trading activity. If you failed to do this, potential customers would view your new venture with skepticism.
To achieve this within the new exchange, connect your exchange into a network of existing exchanges, enhancing its liquidity.
5. Collaborate with an efficient and cost-friendly payment processor
Having lower transaction fees or no fees at all will bring many investors to your exchange. So, it is therefore important to collaborate with top and efficient payment processors.
Note that payment processors vary in terms of fee structures. So, choose the one with a cost-friendly and efficient exchange to be able to compete with others.
Ensure that you avoid the ones that charge hidden fees in their contracts. You need to note here are the settlement time and compliance with PCI DSS, which is a set of best practices to ensure cybersecurity.
For instance, if you are operating in the US, ensure that your payment processor is PCI-compliant to safeguard your new enterprise against cyber threats.
6. Ensure best security practices
One thing that will make you stand out against other exchanges is the implementation of best security practices. Hackers have continued to develop more tricks in hacking people and ripping them of their valuable cash.
So, ensure that your technology provider gives you the best security software to protect you against cyber threats. The safest technology is the one utilizing offline cold storage wallets, two-factor authentication, and encrypted databases.
7. Do beta testing before real work
After building your exchange, set up a contract with a payment processing firm, and all the rules and regulations have been followed; you will need to do beta testing to see if your venture is protected from cybercrime. Doing this will test its full range of capabilities.
8. Commence marketing and PR campaign
Now that all is set, the next thing is marketing and public relations campaign. Doing these once your exchange has launched is meant to connect with crypto news outlets to bring about publicity.
You can then begin planning your marketing activities, along with their costs. To save cost, you can focus on free social media marketing until a critical mass of traders is reached.
9. Provide top-notch customer support
This is what can help your business grow on time and stay long in the industry. Being the last step in making a successful cryptocurrency exchange, you must shine in this area.
So, your company must be attentive and satisfactorily resolve customer complaints and technical issues, and customers should be responded to promptly.
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Nothing on Cryptinus constitutes professional and/or financial advice. Always think for yourself and make sound decisions when investing. Never invest money that you can’t afford to lose.