It seems like everyone is talking about Bitcoin and Cryptocurrencies nowadays. And in truth, there is more chatter surrounding this industry than ever before. To highlight this, take a look at this Google Trends report. It shows both of these terms at an all-time high for interest and search volume.
And with this rising level of interest, you’re seeing a niche that used to be considered quite fringe become mainstream. And this has a lot of people wondering how they can take advantage of the rise in activity. But especially, I think that entrepreneurs have a golden opportunity to get on board with blockchain technology and cryptocurrencies. Here’s how.
First off, let me quickly explain how cryptocurrencies work and what the blockchain is. In the most basic of terms, a blockchain is a distributed ledger that can record transactions between parties. And it is maintained by a peer-to-peer network, or distributed computing systems all over the world.
Basically, it’s a record of transactions that is stored on many computers and is checked against itself for accuracy. Which means that it’s incredibly secure and resistant to modifications.
Now, Bitcoin and other cryptocurrencies take advantage of blockchain technology by storing and operating on a distributed network. This ensures that data cannot be lost or modified.
Now that we know what the technology is that powers the cryptocurrencies, let’s explain some of the advantages of cryptocurrencies and also some of the commonly raised concerns.
First, let’s address the idea that cryptocurrencies aren’t real money. In today’s digital age, all money is really just numbers on a computer. Yes, you can have cash in your pocket, but most of us use credit cards and online banking for most of our activities. And when you’re making a purchase with a credit card, you’re just moving numbers from one account to another. And at its core, that’s exactly what cryptocurrency does. It moves lines of code from one wallet to another.
But then people will argue that there is nothing backing this currency. Well, in truth, since the US left the gold standard in the 1930’s the only thing backing other currencies is the general consensus created around its value. So, again, the cryptocurrencies have value, just like any other currency, as long as people agree that they have value.
So, the most famous cryptocurrency, Bitcoin, was created in 2009 and it is the most widely used and trusted cryptocurrency on the market. Right now it’s value is roughly $4,500 per coin. And yes, each coin can be broken down into smaller units, so don’t fret that you’d need to come up with $4,500 to invest in bitcoin. You can do that for tiny amounts of money.
There is another activity you need to be aware of, and these are Initial Coin Offerings or ICO’s. Think of them as an IPO for the blockchain. But the term itself is a bit of a misnomer since a lot of the companies performing ICO’s aren’t offering coins, but rather tokens. And tokens and coins are very different things.
As I mentioned earlier, the blockchain is a distributed ledger. And Bitcoin and other currencies are used for transferring value from one party to another. And that’s what they’re best suited for. But blockchain technology itself has endless possibilities. And this is where entrepreneurs need to get excited and start paying attention.
Many new companies are using ICOs to raise funds to launch their companies that will be built on blockchain technology. And while some of these are currencies, most of them are tackling other issues while using the blockchain. And because of this, they’re not currencies but rather tokens.
To help differentiate the two, think of cryptocurrency as a vehicle to store value. Tokens on the other hand, can store complex and multifaceted data streams that can be used for endless functionality.
For instance here are a few groups that are currently in an ICO, have finished their ICO, or are planning an upcoming one. You’ll notice that they’re not currencies, but rather solutions that are using the blockchain tech.
One of the biggest problem in the crypto world is being able to spend your cryptocurrency effortlessly. The Centra Card and Centra Wallet app are one solution. Their Currency Conversion Engine Module (CCE Module) allows real time conversion of all supported cryptocurrencies to give the user the ability to spend their assets in real time anywhere in the world that accepts Visa or Mastercard. At the moment their Centra Card and Centra Wallet App support 8 different cryptocurrencies; Bitcoin, Litecoin, Ethereum, Ripple, Dash, Zcash, Monero, and the ERC20 Token (as well as CTR Q1 of 2018). Their mission is to bring all cryptocurrencies together, making them spendable in real life. Their Centra Cards also offer 0% spending and exchange fees. Their first Titanium Cards are being shipped out next week. You can find out more about them on their YouTube page here.
Substratum’s goal is to bring the free and fair internet to the masses. Using their network of nodes and through decentralized DNS they are able to deliver content in countries like China, Russia, and Iran that other services cannot. Substratum, which literally means "foundation", is designed to be the foundation on which products that will revolutionize the internet going forward will be built including the upcoming CryptoPay and Decentralized Video apps rom Substratum. You can learn more about them on their website here.
SmartRE is a blockchain platform that allows homeowners to liquidate a part of their home equity without accumulating any debt or have any interest rate sensitivity; and buyers to purchase that equity at a very low threshold down to one USD, all assured by a customized insurance policy designed to mitigate risk. It is a win-win for both sides of the transaction, and may induce economic growth as more capital is unlocked into the local economy. The team has startup and research experiences where the CEO has helped taken the previous startup on the NYSE with a market capitalization of over USD 8 billion. You can find out more about SmartRE on their website here.
Internxt is trying to contribute in the creation of a new internet by creating a decentralized cloud infrastructure. Internxt is creating a Peer-To-Peer (P2P) cloud computing network that allows users from all over the globe to cooperate in the creation of a decentralized internet. Users can sell the resources of their machines to those looking to host their data in a more private, secure and efficient way. Internxt's cloud platform will not only offer a superior technology to the one of traditional cloud services, but it will also strive to be competitive in terms of price and user experience. Internxt wants to make sure this new internet is accessible by everyone, regardless of their knowledge, a great focus will be put on providing a seamless transition from traditional services to Internxt, without compromising on features.
Fran Villalba Segarra, Founder and CEO at Internxt has high hopes for their future prospects. "We're improving existing decentralized tech and completely redesigning its user interface to make sure we can build an ultimate cloud platform that is ready for mass market adoption. If you are passionate about something, believe you can achieve it and work extremely hard for it, you very likely will end up making it."
They're now holding an Initial Coin Offering which will close on September 28th, and that seems that it'll help them raise around $1,250,000. Internxt Tokens (INXT) will later be used as a means to pay for Internxt cloud services. You can find out more about them on their website.
The Rivetz Token is one of the main cybersecurity tokens. It has been developed to provide provable cyber security controls directly integrated into transactions for the blockchain. RvT provides both the operational and economic model to engage the hardware security already deployed in tens of millions of devices to protect the private keys and assure transactions are intended. Trusted Execution Environments, that Rivetz will enable, are like having a vault on your device to hold keys and process sensitive data. Rivetz is using the RvT token to help put that technology to work and offer users a simpler and safer experience online.
Steven Sprague, the CEO of Rivetz Corp explains it like this: “the Rivetz token provides one of the critical building blocks for decentralized security. Our goal is to help users have a simpler and safer experience, and enable online providers to engage a more valuable subscriber. “
The RvT token sale provides the foundations for a whole new economic model to deploy cybersecurity controls and assure that compliance, privacy and safety become part of the new decentralized network. You can find out more about them on their website.
These companies are examples of just how broad the applications using the blockchain can be and how wide-open the opportunity is for entrepreneurs.
Now, while Bitcoin and other currencies are valued at what investors or buyers are willing to pay for them, these other tokens will largely derive their value from the usage of their solution and the value created by that solution. So, you’re investing in the company and their idea and not necessarily on investor sentiment.
If you’re wondering how you can evaluate these ICOs (and there are a lot of them), then I’d recommend reading this article by Michael Karnjanaprakorn. He does a great job of breaking things down.
Where Entrepreneurs Fit In
Now comes the part you’ve been waiting to find out: how can you take advantage of all of this as an entrepreneur?
Well, there are several ways. The first and easiest would be to simply invest in upcoming ICO’s or in existing cryptocurrencies. Although this can still be a wild ride as you’re seeing gains and losses in the double digits on a daily basis even for the well-established currencies and tokens.
The other way you can take advantage of this is to use ICOs as a fundraising mechanism. In fact, ICOs have recently surpassed early stage VC funding in the amount of money invested.
And using ICOs as a method of fundraising allows companies to quickly enter a market, if their technology is sound and there is enough interest in their offering.
And finally, the other way that entrepreneurs can take advantage is to build their solutions on the blockchain technology. Many proponents of blockchain technology believe that it is the next major revolution in our everyday lives. Some have even compared the disruption it will cause as akin to the internet in the 90’s and early 2000’s.
Thus, you can imagine that the opportunity for entrepreneurs to stake their claim on this new frontier is still pretty much endless.