It took less than a decade for blockchain to go from a fringe idea to a promising technology embraced by many investors and entrepreneurs. For example, in the first nine months of 2018, nearly $3.9 billion in venture capital (VC) was invested in the sector – a 280 percent increase over 2017. Initial Coin Offerings (ICOs) have been even more successful, giving startups more than $10 billion in 2018 alone. And as the promise of blockchain entices a growing number of startups, it's important to understand the key aspects of this technology and dispel potential misconceptions.

Starting a blockchain-based business is in many ways similar to starting any other business. You need to have a good product, excellent marketing, a skilled founding team and – ideally – investors with deep pockets. But blockchain makes a difference in how you get to all these things. It provides companies with an unconventional way to raise money from investors through ICOs and can improve business operations through efficient smart contracts, improved cyber-security and improved user privacy. These benefits are available not only to blockchain-focused companies, but also to a large range of other businesses such as manufacturers, retailers, and more.

The founding team must have technical expertise 

As a distributed ledger that stores cryptographically secured transactions across thousands of computers, blockchain is both an exciting and complex technology. It's a tech ecosystem where things move fast, and that's why Ali Ayash, founder and CEO of blockchain firm Lumiosa, warns that founding teams "must have technical expertise" in blockchain, and that everyone on the team must "contribute" expertise, and that you can do it quickly. Be able to. It is also important to connect with people who have experience in this field. Applying lessons learned by other companies can prevent costly mistakes like inadequate testing before product launch or losing cryptographic keys needed to access crypto coins. 

Talking to blockchain experts will also help broaden your horizons in terms of the possibilities that blockchain can offer. This technology is not only suitable for handling cryptocurrencies; It has the potential to transform a range of industries. For example, cloud storage company Storj is using blockchain to develop an inexpensive way to store data in the cloud, with millions of users worldwide relying on spare hard drive space. With the traditional cloud market worth nearly $100 billion, it's not hard to see that blockchain cloud services have great potential. Crypto.tickets use blockchain to run its ticketing software, promising better protection against fraud than conventional competitors. However, a good product idea is the first step in building your business. Securing funds is the next important task.

How To Attract Funds When Crypto Markets Are Volatile 

Blockchain startups can approach VC investors like any other company and pitch their ideas to get funding. But if that doesn't work, or if you don't want other people to own your company, an ICO is a possible solution. This is similar to offering shares of a private company to the public through an initial public offering (IPO), except instead of shares, investors receive cryptocurrency tokens. And if the startup they financially back succeeds, those tokens will increase in value and investors can sell them on the crypto exchange market for big profits. This method has been used by many startups to raise billions of dollars, but it is a highly competitive process with investor interest fluctuating depending on the price of cryptocurrencies such as Bitcoin and Ethereum.

However, there are some proven strategies that can increase the chances of a successful ICO in any market situation. A clear and concise white paper that explains the technical aspects of your project and the team behind it is crucial. As entrepreneur Andrew Medell argues, what follows is an integrated marketing approach using "a combination of PR, ICO listing websites, YouTube reviews and perhaps a TV interview". But what really makes the difference, according to him, is an experienced advisor and founding team that gives investors confidence that the business plan can be executed efficiently. And with a little luck and a community of fans on Telegram — a chatting app that crypto companies often use to communicate — your blockchain idea can gain traction and earn the millions of dollars needed to make it a reality.

The benefits of blockchain are accessible to many companies 

It's easy to see how blockchain enables startups to raise cash and fast-track their business plans. But the benefits this technology offers go beyond that, and more importantly, they are available even to non-blockchain-based startups and companies. For example, a smart contract is a self-enforcing contract written in computer code and stored on the blockchain. It is automatically activated when certain conditions are met, such as payment or product delivery. What's more, these contracts are unbreakable and often don't require expensive third parties to create and enforce them. The potential applications of this concept are vast, and one of them was the blockchain-based IoT platform developed by Slack. This company has developed a system that allows users to rent bicycles by unlocking a smart lock once both parties agree to the terms of a smart contract. 

Blockchain can help companies be more transparent about their supply chain. One startup, Provenance, has developed software that allows retailers and other businesses to show how their products were sourced, handled and distributed. Additionally, the immutable and decentralized nature of blockchain increases their defenses against cyber-attacks and prevents data breaches that companies like Facebook, Equifax, HBO, and many others have already suffered. Finally, blockchain-based apps like Bitwage offer businesses the option to pay their international workers with Bitcoin. The company promises lower fees and faster payment processing than banks.

Investors are betting big on blockchain 

Blockchain has the potential to disrupt multiple sectors and investors are betting big on the technology. Billions of dollars invested in hundreds of startups have empowered entrepreneurs to develop more creative applications for this technology. And while starting a blockchain-based business comes with some challenges, you still need to build a good product that customers want to use, and skilled founders know how to impress investors. Blockchain helps startups achieve these things by enabling ICOs, smart contracts, improved cyber-security and more. Fortunately, these benefits can also be enjoyed by non-blockchain companies, allowing customers in many industries to receive better products and services.