There’s a lot to like about the prospect of things such as ICOs and blockchain systems from a technical, legal and operational standpoint. There’s no need to rely on governing or regulatory bodies of any kind to launch or support anything, and you get the benefits of standard business operations without having to face a single point of failure.
But the concepts are still new, and there are some major teething problems to be overcome; problems that have seen a lot of ICOs fail and the concept of cryptocurrency attracts a great deal of negative public perception. There’s a lot of work to be done before the industry settles.
So what will it mean for a business-backed by blockchain and cryptocurrency to flourish well into the future, and how can companies and individuals today achieve sustainable growth? What does will it even look like? Let’s go through it.
Navigating the bubble
There’s one big reason why people are so wary about all things crypto: something that began as an exercise in achieving an independent and private exchange system was turned into an enormous bubble by investors eager to jump on the bandwagon. With so many people simply out to make as much money as possible through exploiting the massively-fluctuating speculative values, it’s easy to tar all cryptocurrency enthusiasts with the same brush.
Though this obviously doesn’t reflect where the cryptocurrency industry will ultimately go, it’s a problem that any business eager to embrace this budding new infrastructure must find a way to endure and overcome. With bubbles forming and bursting on a regular basis, a sustainable business model will have a long-term plan that doesn’t rely on anything as currently-unpredictable as, say, the value of Bitcoin. With regulation changing rapidly as well, ensuring the company is formed in the right way and that al things such as crypto tax are considered from the outset, projects can prevent expensive legal litigation that may destroy the business moving forward. It’s advisable that all projects seek the advice of cryptocurrency accountants for all key company decisions.
Using asset-backed tokens
Anyone eager to see stability reach the cryptocurrency world has their eye on the general viability of tying digital currency to real-world assets. While many world economies have moved away from ‘standards’, this would be a move back in that direction, stabilizing the value of a given token by linking it to a static asset instead of a conventional currency. A business launching with an ICO would be well-served to reassure potential investors that their tokens could be considered more stable than stocks. Another major concern is liquidity of crypto funds post ICO and the inherent negative effect on the entire market as ICO’s cash in crypto for fiat funds. A major option here is affordable crypto lending from the likes of Block bitcoin loans.
In the end, this makes absolutely sense as a destination for cryptocurrencies. Just as there is a certain amount of gold identified in the world and it isn’t typically cost-effective to search for buried treasure, there will always reach a point of diminishing returns in crypto mining.
After all the dust has settled and the speculators have cashed out of the market, what’s left will need to be stable enough to function as an everyday currency, and this is a great way to ensure that we don’t see nigh-arbitrary value alterations.
Achieving mainstream support
Blockchain advocates talk at length about the benefits of having an open system that is essentially processed by a network instead of an overseeing party, but ‘blockchain’ still sounds like a buzzword to the average user, and more often that not the investment it attracts is of the dangerous speculative kind we touched upon earlier.
This view of blockchain methodology as a fad or a gimmick cannot be changed overnight. It’s going to take a lot of time and expert guidance (as well as industrial and technological maturation) to turn it into an accepted, standardized approach to business.
Though some ecommerce platforms already support some cryptocurrencies (Shopify—one of the most popular options for building an inexpensive webstore—has accepted Bitcoin payments since 2014), what will really solidify this technology in the mainstream is more communities finding interesting ways to practically adopt it to their own ends.
As the general public comes to see that blockchain allows them to chart their own destinies to a much greater extent, building self-sufficient independent exchanges, the memories of the initial difficulties will fade — and then we might see some very interesting innovations.
Moving towards efficiency
Blockchain mining draws a lot of power: a massive amount, in fact. This is something that attracts criticism (and for good reason) but it isn’t an unavoidable issue. The problem currently is in the ongoing need to allocate crypto coins, not in the underlying technology, and there are other approaches you can take to make the establishment phase more efficient.
Just look at what Solar Bankers are doing using the Skyledger blockchain. By initially issuing Skycoins to those who support and propagate the network, and subsequently providing them as rewards for people producing more solar electricity than they use, they incentivize the adoption of clean energy and sidestep the problem of requiring coins to be mined.
The key takeaway is that blockchain and the laborious ‘proof of work’ stage are not tied together forever, and we might one day see a host of blockchain networks spread across the globe, using government-independent means to address environmental concerns. It’s an exciting prospect.
Achieving sustainable digital growth is about looking past the present-day turmoil and planning for the future. By making your business model strong enough to endure the daily fluctuations of cryptocurrency values and the varying public perception of blockchain technology, you can give your venture the best possible chance of being among the first companies of its kind to prove truly sustainable.
Kayleigh Alexandra is a content writer for Micro Startups — a site dedicated to supporting startups and small businesses of all shapes and sizes. Visit the blog for the latest entrepreneurial news and side hustle tips. Follow us on Twitter @getmicrostarted.