Published On: November 23rd, 2020
Today, cryptocurrency is a buzzword that has become a global phenomenon. In 2019, the cryptocurrency market was valued at USD 1.03 billion[efn_note] Cryptocurrency Market Report – Global Forecast to 2024 [/efn_note], and it is projected to grow up to USD 1.40 billion by 2024, which shows how fast it is evolving.
Virtual currency is surging a heated debate in the tech and finance sector and everyone has his own opinion about it. But, in reality, not many people can tell what cryptocurrency is and how it can shift the global currency axis. Thus, if you aren’t closely familiar with cryptocurrencies, this quick startup guide is going to be an eye-opener for you. Let’s start with quick to in-detail cryptocurrency startup guide to help you understand what exactly is a cryptocurrency.
Table of Contents
What is Cryptocurrency?
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“The future of money is a digital currency.”– Bill Gates.
If you mute out all the hype revolving around cryptocurrency[efn_note]Bitcoin Wikipedia[/efn_note], you can find a very simple and clear definition – it is a digital entry in the database that can’t be changed without fulfilling certain conditions. This doesn’t sound interesting, but believe it or not – this how currency is defined.
Let’s take the example of money present in your bank account. It is nothing more than an entry in your bank account that changes under specific conditions – when you spend or earn it. Money is a verified entry in any kind of database. So, cryptocurrency is –
Cryptocurrency is an online medium of exchanging money using cryptographical functionals. Cryptocurrencies utilize the tight-knitted blockchain structure to bring transparency, decentralization, and immutability.
“Paper money is going away.” – Elon Musk.
Evolution of Cryptocurrency
At Colitco, we prefer to tackle a topic from its very beginning, and cryptocurrency had first time knocked at our doors in 2009. When a person named Satoshi Nakomoto launched a peer-to-peer cash system – Bitcoin, it was developed to regulate inflation through secure methods to control the money in the hands of people.
The terms like bitcoin mining and alternative digital currency became popular with the first knock of cryptocurrency. The first bitcoin transaction was dated back in 2010 when two Papa John’s pizzas for ₿10,000 were bought by a programmer named – Laszlo Hanyecz. With this, many cryptocurrency evaluations have been recorded in the last decade like –
• In 2016, Uber in Argentina[efn_note]Uber Thriving in Argentina Once Again Thanks to Bitcoin[/efn_note] started to receive bitcoin payments.
• Microsoft allowed people to buy games using digital currency.
• In Canada, the first bitcoin ATM[efn_note]World’s first bitcoin ATM opens in Vancouver[/efn_note] was installed.
• Japanese government[efn_note]As China cracks down, Japan is fast becoming the powerhouse of the bitcoin market[/efn_note] passed a law to accept bitcoin as a legal payment tender.
• Samsung developed chips to mine bitcoins.
• Many new digital currencies have become part of the mainstream financial transactions, such as – Ethereum, Zcash, Ripple, Litecoin, Dash, and many more.
How Is Cryptocurrency Reshaping Digital Payment System?
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In 2020, over 2,000 cryptocurrencies are available on the internet, so we can’t complete our quick startup guide on cryptocurrencies without discussing the impact of ‘Crypto on Digital Payments.’ The online currency has been accelerating digital payment systems in numerous ways –
• Hassle-Free Structure
Usually, people hesitate to use online payment methods because they have a complicated structure. With the peer-to-peer cryptocurrency structure, the middle layers are resolved, so people can now trail back to their transactions to avoid confusion. It helps in establishing accountability among the two parties involved in the transaction.
In the cash/credit system, the smallest of transactions are subject to a reference document for banks and other federal agencies. The cryptocurrency very cleverly brings discretion between the transactions. This privacy guard prevents your discreet business transactions from being identified or exposed to anyone else besides the two parties involved in the process.
• Transactional Charges
To complete many e-wallet or credit card transactions, users have to sacrifice a portion of their wealth in the name of transactional fees. When you have to perform multiple online payments monthly, it is going to be a big blow to your finances. This shortcoming of digital payment systems has been tackled by cryptocurrency. Since the data miners are remotely located, thus, compensation received through the cryptocurrency network isn’t applicable to transaction fees.
• Easier Global Trade
Due to different exchange rates, transaction charges, and online payment transfer levies imposed by some countries, global trade isn’t possible for small businesses. With the peer to peer payment structure, cross border transactions can be easily conducted without any complications. Furthermore, international trade compliance can be reduced with a fixed monetary term.
• Highly Secure
When you are making digital payment through your bank or any other third party portal, you have to rely upon the security network of the portal. It means your financial safety lies in other people’s hands, which is risky. Since cryptocurrency is based on blockchain’s strong shoulders, breaking the block security is simply impossible. The strong encryption provides safety against account tampering and other online payment frauds.
Top 5 Cryptocurrency Startups to Watch Out For
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Inspiring startup stories often leave you with goosebumps and zeal to try something unique. In the area of cryptocurrency, there are an array of inspiring startup stories available that can simply wow you. The top five cryptocurrency startup stories to take inspiration from are –
Javvy is an innovative cryptocurrency startup that aims to take the place of all the cryptocurrency exchanges and wallets. This startup is working towards developing a universal wallet to manage all cryptocurrencies and decentralized exchanges through one handle.
Funding – Not disclosed[efn_note]Crunchbase -Javvy Technologies Ltd[/efn_note] because it is a privately owned company.
Business Model –It is a universal wallet connected to combine multiple cryptocurrency exchanges. Usually, people have to search hard to find trustworthy exchanges to invest. Therefore, this business model is introduced to make a safe, attractive, and feature-rich crypto wallet for all.
SpectroCoin is targeting the bigger picture by creating a bridge between banks and cryptocurrencies. This wallet enables users to store Ethereum, Bitcoin, Tether, NEM and Dash cryptocurrencies. It also serves the purpose of an exchange.
Funding – SpectroCoin has raised $110K[efn_note]Crunchbase – SpectroCoin[/efn_note] from a round of seed funding.
Business Model –Three brilliant young minds came together in 2013 to set this financial foundation – Vytautas Karalevičius (CEO), Mantas Mockevičius (CFO), and Justas Dobiliauskas (CTO). This platform was developed to encompass different financial services under one roof.
SpectroCoin has today touched many financial sectors as per their business goals like SpectroCoin debit card solution, crypto-backed loans market, contactless SpectroCoin cards. With 1,000,000+ customers, SpectroCoin is slowly turning into a cryptocurrency hub.
This cryptocurrency startup is based on tokening securities structured on blockchain technology. They are trying to develop a portal to easily and quickly buy and sell digital securities. The company is mainly focused on startups and equity, but they are also tokenizing investment funds, real estate, and fine arts.
Funding – Harbor is a new wave of tokenized funding. The company has headquartered in San Francisco, California, United States. It is a funded startup company that has raised $38 million[efn_note]Crunchbase – Harbor[/efn_note] in the three rounds of funding from 15 investors. Navitas Capital and Signia Venture Partners are the two new investors of Harbor.
Business Model – It is a full-fledged technology company. It provides services in different areas such as HTML5, Google Analytics, and Google Fonts. The business model is completely focused on tech. They have used 30 technologies to merely design their website.
Binance was founded in 2017 and in a very short time, it turned out as the largest cryptocurrency exchange. Originally, the company was founded in China, but it was shifted to Japan and later on to Malta due to strict implementation rules.
Funding – A total of 13 investments are made in the company on different occasions. Around $10 million[efn_note]Crunchbase – Binance[/efn_note] has been raised in them all.
Business Model – It is a unicorn business venture that combines digital tech and finance. The firm provides access to digital currency exchange while maintaining a high level of security and liquidity.
It is a US-based startup founded in 2016 to offer open governance and development. The two-hybrid mining system – “proof-of-work” and “proof-of-stake” is used to ensure that a small group doesn’t control transactions flow.
Funding – In one round[efn_note]Crunchbase – Decred[/efn_note] of funding, the company has raised an undisclosed amount of investment from an investor.
Business Model – It is similar to Bitcoin, but it is a hybrid platform to governance open and sustainable funding. Decred uses a unique method to record transactions to prevent fraud. This company is a collective effort of Alex Yocom-Piatt, Dave Collins, David Hill, Jacob Yocom-Piatt, John Vernaleo, and Josh Rickmar.
Cryptocurrency is indeed the future of money. In a short period, cryptocurrency has evolved and multiple tech startups have been launched to take digital currency one step ahead. Already, cryptocurrency has evolved to a great extent and the way new inventions and developments are being made – nobody can deny that cryptocurrency can be the future money model.
We hope that this cryptocurrency quick startup guide has been an eye-opener for you; if you want to read more startup articles like this, do check other posts on our website.