What Is a Cryptocurrency Startup and How Can You Launch One?

What Is a Cryptocurrency Startup and How Can You Launch One

Make your mark in the booming blockchain industry by launching a crypto startup today. Here’s how!

Last year was a landmark one for the cryptocurrency industry, featuring the NFT boom and new token launches. Funding into crypto and non-fungible token (NFT) startups grew by over 700 percent last year. Investors have poured in about US$28 billion into global crypto and blockchain startups, with US$3 billion being dedicated to NFT companies alone. Everyone wants a piece of the cryptocurrency action—be it through investing in the same or building something of their own. In fact, various people are even leaving their big tech company jobs to join a crypto company. For instance, the New York Times reported that Sandy Carter left her job as the Vice President of Amazon’s cloud computing unit to join a crypto tech company, Unstoppable Domains. She declared, “The momentum we’re seeing in this space is just incredible.” 

Many have taken notice of crypto’s immense growth potential and are not about to let the opportunity slip by.

So, what exactly is a cryptocurrency startup?

A crypto, or (more broadly) blockchain, startup refers to companies built on a blockchain, which is a decentralized and immutable ledger enabling peer-to-peer crypto transactions and networking. This startup has no single leader, as it is based on consensus mechanisms, and can raise funds from around the world, using methods such as initial coin offerings (ICOs), initial DEX offerings (IDOs) and more. 

The rising demand for digital money combined with the excitement of building a blockchain-based future is ushering crypto startups into the limelight. This is evidenced by the venture capital investment boom, which has gone from a few million dollars in 2015 to over US$6 billion in 2021.

Presently, New York houses the most well-funded crypto startups in the U.S., with nearly half of the investments last year being allocated to startups in the region. Coinbase Ventures is the leading investor there. In addition to that, the State of Blockchain 2021 report published by CB Insights found that 1 in 4 dollars around the world are allocated to blockchain projects.  

How can you launch a crypto startup? 

The process of launching your own crypto or blockchain project is similar to that of launching your own cryptocurrency. Here’s how you can get started:

Step 1: Decide the kind of project you want to create

Within the blockchain industry, there are numerous possibilities for aspiring startups. For instance, you can build a crypto exchange, such as Gemini; an NFT art collectibles marketplace, such as OpenSea; or a gaming platform, such as The Sandbox. Do your research and figure out what you want to create.

Step 2: Understand the functionality you require and the associated costs

What purpose will your project serve? Do you want to record patient details on a decentralized, immutable ledger? Do you want to collate property listings and prices for your real estate company? Do you want to track your supply chain process—from documentation to payment? Figure out the ultimate goal of your startup and understand the cost breakdown, including the investment required to build it, the potential revenue and the maintenance costs. 

Step 3: Build a good smart contract

Place your startup’s decentralized logic on a smart contract, which is a self-executing agreement between two parties. The smart contract will perform the befitting tasks when a user utilizes your project. You can choose to build your own contract or opt for one on an existing blockchain, like Ethereum. This way, you can build your project directly on that blockchain. 

Step 4: Create an efficient front and backend

Focusing on building an efficient user interface and a centralized backend can ensure that  users have a seamless experience on your project’s site. Though the concept of blockchain may seem complex, your users shouldn’t have a hard time navigating it. It should be like any other mobile app. 

Step 5: Test and seek feedback

Once your crypto startup is ready and raring to go, it’s time to test it out. This way, you can figure out if there are any glitches or room for improvement. Plus, feedback is very important to understand the viability of your project. The Founder of data management blockchain platform ClinTex, Brendan Mannion, adds, “There is no knowing where the market rally will go from its peak. Will Bitcoin continue to conquer new highs, or will altcoins and tokens follow? Make sure your project is prepared both for a bull market, but also for another dip into bearish territory.”

Step 6: Give due attention to influencer marketing and community

Promoting your crypto startup is integral to your success. That’s why, look to influencer marketing and community building to get the word out and move your project forward.

Crypto startups are a great opportunity for employees, too. In fact, many of them are willing to take a pay cut to join these startups, as they are aware of the growth possibilities. What’s more? The co-Founder and Chief Executive of blockchain startup Mysten Labs, Evan Cheng, expounds, “It’s not necessarily the case that you have to go take one-third of your Big Tech salary anymore, because a lot of these companies are so well capitalized.” All things considered, venturing into the crypto startup ecosystem is beneficial for founders, employees and even investors. So, why wait? Get started now!

Header Image by Freepik

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