Blockchain as well as cryptocurrencies are now gaining momentum. Blockchain technology itself is developing at a fast pace and there are now more real-world use cases of the currency than ever. At present, you will find over thousands of cryptocurrencies in the market that are being backed by a number of blockchains. Bitcoin (BTC) is hands down the most popular cryptocurrency that was also the first one to use blockchain technology. Read more about Multibank
Blockchain technology is being looked at as a powerful financial tool through which cryptocurrencies could spread their wings into industries like gaming, social media, eCommerce, finance, and banking among others. Cryptocurrency is also playing an important role in creating Web 3.0. There are also plenty of other digital projects where such technologies are at work.
Here are some top reasons why you should also consider creating a crypto token for your business.
- Rewarding Users
The acquisition phase is without a doubt, the most troublesome period for any startup that is new in the game. To gain more customers, you have to use the right kind of marketing to push your business. This can be done on channels like search engines and social media but it doesn’t necessarily convert into customers. If you have your own crypto token, people will find an incentive to be a part of your platform as they find different services that can boost your coin’s value. You could also encourage them to use a reward system for different activities which will in turn make your platform more user-friendly and approachable.
- Raising Capital
Getting capital investment for your business can be difficult and for a lot of tech companies, just the part of getting to a venture capitalist’s office could seem tricky. There are a number of rules and regulations to meet. Other than this, if you are part of their portfolio, your visions or goals could get sidelined. You can find it tricky to get the returns that meet your expectations or perhaps you and your investor may not always align when it comes to prioritizing tasks and funds for the future.
Therefore, to avoid these conflicts you could consider raising capital through an ICO or an IEO. Through this case, you could use blockchain technology to pump money into your project as you then can access a wide network of investors around the world.
- Utility Token
A utility digital token or cryptocurrency could be typically used when there’s a need to raise funds to develop the cryptocurrency. However, they may even be used in a more natural way to carry out trade within the platforms. Later, these can be exchanged for the services that cryptocurrency issuers offer. It is a popular way to raise funds for a startup which can be further sold by asset holders or be exchanged for a service. Utility tokens simplify the process of piquing interest in your project, especially among the investors who already own your cryptocurrency in their digital wallets.
As soon as the project goes live, you have the option to give the users interested in your services and products a lion’s share of value.
- In-Game Currency
Suppose you are making a game, and you will find several ways to earn points, treasures, or any other form of digital assets that may be used in your game. Such items are easy to digitize on the blockchain and thus can be traded with different users to uplift the value of your token. This will further encourage in-game sales, exchanges, purchases, and trades.
- Use crypto as collateral to secure loans
Cryptocurrencies may also be used as collateral to apply for and secure loans. There are a number of fintech firms around the world that issue personal as well as business loans instantly in fiat currencies after accepting cryptocurrencies as collateral. This implies that your cryptocurrencies could help you pay for the expenses your business incurs without even selling away the tokens. As soon as you pay back the loan, you will be able to receive your crypto.
Startups who are at a very nascent stage and don’t exactly qualify for typical bank loans because of their credit history are going to find this very useful. It is a very impressive way of raising capital without giving away any equity or control over their business which is often the issue with investors.
- Develop a token economy for your company
Businesses are increasingly embracing tokenization now. Though there are multiple ways of doing this, you could create a crypto token for your business by developing a digital token that could be handy to fuel some company operations. A token economy could facilitate cost management and also help in boosting production so you’re able to leverage scale economies. The capital saved can be used for further expansion plans and to reward employees as well as stakeholders. Read more about cryptocurrency exchange
Nonetheless, boosting a token economy comes with its own set of challenges. It could be hard and also have legal as well as regulatory implications but when done right, it could take your business to great heights in the future.
- Save on transaction fees
Payments are one of the most common uses of cryptocurrency in any business. Crypto payments are quick, cost-effective, and safe. Since there are no intermediaries in the picture, businesses could in fact make a lot of savings as there are no transaction fees to be paid. It can be a great plus point for those businesses which have nominal margins or conduct a lot of international trade.
The decentralized nature of cryptocurrencies makes them borderless while also facilitating 24X7 trade. Thus, for users who live abroad and carry out transactions in different time zones, these are near-perfect payment methods.
Cryptocurrencies have numerous benefits for businesses that range from quick transactions, simpler international payments, and the fact that funds can be raised via ICOs as well as secured loans. Other than these use cases, crypto can also be great hedging tools for investments and can help in steering a company’s growth by bringing investment.