Blockchain for entrepreneurs have changed the way capital is raised, savings are invested and how value is transacted. In some quarters the blockchain technology has been hailed as a breakthrough with regards to innovations in finance. For entrepreneurs, there are many ways they can benefit from the technology.
1. Initial Coin Offerings
One of the things that virtual currencies have disrupted is how capital is raised by early-stage firms. Initial coin offerings have provided startups with a way to raise funds fast and at a low cost from all corners of the globe. Early stage companies have previously had a problem with regards to valuation but with ICOs their value gets reflected by the market almost immediately. With tokens now becoming the new shares, they are tradable early on giving startups the much-needed liquidity.
Courtesy of this new way of raising capital good business ideas have not been held back and blockchain for entrepreneurs have an opportunity to build their firms at fast growth rates. A good example of this is Vitalik Buterin who managed to raise approximately $18 million for his Ethereum project four years ago. At the beginning of this year the market capitalization of Ethereum was at one point more than $100 billion.
Blockchain for entrepreneurs has made it possible for the transaction of value to take place between individuals without having to pass through a centralized authority. Compared to the traditional payment networks transacting value using virtual currencies is faster, cheaper as well as more efficient.
For entrepreneurs accepting payments in the form of digital coins enhances efficiency, increases the speed of settlements and cuts on fees. In the near future, it will be possible for startups to do away with bank accounts that they now need in order to receive and distribute money.
Four years ago online retailer Overstock.com made history as the first e-commerce firm to accept payments in form of Bitcoin (BTC). In the initial 22 hours, the online retailer received more than 800 orders valued at approximately $126,000 in Bitcoin. Currently, Overstock.com has a cryptocurrency portfolio worth around $403,000
Virtual currencies have provided entrepreneurs with a golden investment opportunity as early-stage firms enjoying high growth are now available to retail investors. Previously private angel investors and venture capital firms had a monopoly over these investment opportunities. But digital coins have democratized this and now anyone from any part of the world can invest in firms expected to enjoy high growth.
A good example of this is Erik Finnman who made an investment in Bitcoin seven years ago and by the time he was turning 18, he was already a dollar millionaire. With the traditional methods or vehicles of investing this would not have been possible.
4. Blockchain-based applications
On the blockchain, powerful applications can be built making it possible for entrepreneurs to create business models that are new and innovative leading to the development of new ways in which value is created. Payments firm OmiseGo is, for instance, developing a blockchain-based banking service aimed at the unbanked population in the world.
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