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Even though cryptocurrencies have been around for over a decade, they are still new, exciting, and full of growth and opportunity. With so much space and flexibility provided by crypto, now is the best time to explore any ideas you may have about starting a cryptocurrency business. In an exploding digital economy, digital currencies will become more significant than ever.
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Many businesses that deal with traditional fiat currency can also be adapted to deal with cryptocurrency. With that in mind, let us take a look at nine different cryptocurrency business ideas that take advantage of the current needs in a digital currency economy.
1. Start a Cryptocurrency Exchange Business
A cryptocurrency exchange is a business where people can buy and sell various cryptocurrencies in a safe and secure environment. The owner of the exchange charges fees for users to deposit, withdraw, and transfer their cryptocurrencies.
There are several different types of exchanges in the market. Therefore, do your research on what kind you want to run before you launch. The types of exchanges are:
- Centralized exchange
- Decentralized exchange
- Hybrid exchange
- Order book exchange
- Ads-based exchange
- Binary options exchange
Once you have made your choice, you will want to make sure you have proper legal counsel. You will also need funding, a cryptocurrency exchange software supplier, and a payment processor. Additionally, you will need the means to perform all the testing, marketing, and support you will need to run a successful company.
2. Provide Cryptocurrency Payment Gateway Solutions for Other Businesses
Another cryptocurrency business idea is to start up a crypto payment gateway. Cryptocurrency payment gateways are how businesses can accept payment online via various cryptocurrencies. A strong focus on security is needed, as this is the core value that crypto payment gateways provide. Coinbase Commerce is currently the leading payment gateway provider to multiple online stores.
When a customer makes a payment using a digital currency through a business that uses a cryptocurrency payment gateway, the gateway usually converts the crypto to fiat currency to stabilize its value. Then it routes the transaction details from the merchant to the issuing bank. Once the bank approves the transaction, it can settle the amount with the gateway, and the gateway does the same with the merchant.
So how does the payment gateway make money? They do this through transaction discounting rates, transaction charges, support costs, setup fees, and various other services that make their clients’ lives easier.
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3. Start a Crypto Payroll Service
Like a traditional payroll service, a crypto payroll service allows businesses to pay their employees. They can enable a company to fund their payroll account with both cryptocurrencies and fiat currency, thus giving employers the option to pay their employees in either type of currency.
A crypto payroll service makes its money by charging businesses fees per employee paid monthly or annually. Additionally, charging fees for the various ways businesses want to fund their payroll and different wage distribution methods are other income sources.
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4. Start a Bitcoin Mining Business
Mining Bitcoin can be a profitable cryptocurrency business if approached the right way. However, gone are the days when Bitcoin mining could be profitable with just a home computer. At present, specific mining rigs costing $12,000 and up are required to solve most Bitcoin calculations. You can pool resources to get into mining for less, or even mine through the cloud, though these are much less profitable enterprises.
Along with hardware costs are the costs to house and power said hardware. Electricity plays a large role in the profitability of mining. So does heat reduction for the application-specific integrated circuits (ASICs) needed to mine effectively. An estimate on electricity usage alone puts each Bitcoin transaction computed at 215 kilowatts.
The way Bitcoin mining earns you money is by computing hashes to verify Bitcoin transactions. The first miner to correctly audit a transaction earns Bitcoin as well as a transaction fee. If you can make enough money through this to still earn a profit after paying your hardware and electricity fees, then you are in business.
Of course, that is the primary concern. Profit is tied directly to the value of Bitcoin and the cost of electricity. The less Bitcoin is worth, the less it is worth to mine it. If your business is to mine and provide mining services for others, you can charge your customers to offset your costs.
Another avenue is to research and mine other currencies that may have a lower entry barrier when it comes to costs. In the end, mining cryptocurrencies is a risky business that brings with it hefty rewards if you are successful.
5. Provide Crypto Asset Management Services
With a healthy interest and knowledge of cryptocurrencies, another great cryptocurrency business you can get into is asset management. By taking a long-standing business like financial management and turning its eye on the world of cryptocurrency, you can make a living by helping others make the most of their digital investments.
Services you can offer would be similar to ones that any fiat financial advisor provides their clients, including:
- Financial planning
- Investment advice
- Cryptocurrency coaching
- Financial analysis
You could travel to a client’s location or provide your services remotely. By doing so, you would be cutting the overhead of having a physical office space with all the costs associated with it. All you would need to do to get started is register your agency, market yourself, and use your cryptocurrency knowledge to your advantage. To get an idea of how you could put something like this into action, check out this blog post at Crypto Head, where investors can learn all about investing in cryptocurrencies.
6. Provide Legal or Accounting Services to Crypto Investors
Like providing asset management services to cryptocurrency clients, providing legal and accounting services to digital investors would be almost parallel to how you would offer those services to fiat customers. Something many heavily invested in cryptocurrencies need is tax services.
As a CPA for crypto, you could help clients navigate the continually changing legal waters of virtual currency. Helping individuals and businesses that routinely transact or invest in crypto with their bookkeeping and tax filings is an invaluable service.
7. Start Cryptocurrency Lending Services
As an alternative investment firm, you could lend either fiat money or cryptocurrencies to others in exchange for interest. As a lender, you would choose an interest rate, give a borrower assets in exchange for bonds, receive bonds as interest, and then return the bonds when the contract is complete to get crypto in return.
There are multiple crypto exchanges out there that can assist in a cryptocurrency lending contract. Platforms such as Binance or Coinbase act as a middleman in an easy-to-use service that offers both you and the borrower various protections. This protection means that all currency must pass through them and remain in their control until withdrawn.
There is always the option of using Decentralized Finance (DeFi) to lend without going through someone else. Using a smart contract allows transactions to occur automatically with predefined conditions. A smart contract’s security comes from public audit so that everyone can verify it manually. Because DeFi is limited to a single blockchain, options available for crypto lending are limited.
8. Provide Bitcoin Escrow Services
A cryptocurrency business idea that uses the same blockchain technology that powers virtual currencies is starting a Bitcoin escrow service. Currencies whose value is continuously growing are great for escrow services, so it is only natural to get into the crypto escrow industry.
Escrow services act as unbiased middlemen for crypto transactions between two parties. An escrow protects sellers from fraudulent buyers by requiring the purchasing party to place an upfront crypto deposit. It also protects buyers if a seller does not hold up their end by providing their goods or services.
An escrow company makes its money on the fees they charge for their service, making for a relatively straightforward business for those who have the means to make it happen.
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9. Offer Freelance Writing Services for the Crypto Industry
What better way to put your cryptocurrency knowledge to use than by sharing it with the world? Freelancers who can write about crypto for blogs, online research, content marketing, SEO, and more are in popular demand across industries.
A good freelance writer can help a company build a reputable brand by writing quality, well-informed copy. Specialized writers who know how to meet their clients’ needs can increase a company’s brand awareness, search engine rankings, and help with more technical writing such as whitepapers or tutorials.
As a freelancer, you can set your own rates and market yourself quickly on many freelance boards such as Upwork. Current freelance rates for cryptocurrency writing range from $35 an hour to $200 an hour, depending on the expertise and breadth of knowledge the writer has.
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Concluding Thoughts About Cryptocurrency Businesses
Knowing the cryptocurrency industry’s ins and outs allows those in the know to apply that knowledge to other industries in new and exciting ways. As you can see from the information presented above, there is no shortage of cryptocurrency business ideas.
You can adapt just about any business that revolves around fiat currency to work with crypto, sometimes in more profitable ways. All it takes is a solid understanding of how virtual currencies work and how to use that knowledge to your advantage. Whether you currently own any crypto or not, you can start a business around it.
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