Cryptocurrencies have had a profound impact on the economy. They were invented in 2008. Most people expected that crypto would be a novelty that would only catch on with a small fringe group of techies and criminals. Bitcoin defied all expectations and apparently became far more popular than even its inventor would have predicted.
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A number of mainstream businesses have started accepting bitcoin, including eBay and Expedia. Fewer people discuss the implications of cryptocurrencies for small businesses and new startups. However, the impact for new entrepreneurs may be even larger.
Here are some great ways that new business owners can use bitcoin to subsidize their startup in the early stages. ICOBuffer has some additional resources if you need to learn more.
Use bitcoin mining to supplement your income
In the early days of your startup, you are going to need to live on a more limited income. It is simply going to take time to generate cash flow. This could mean that you will need an additional source of income for months or even years.
During these cash-strapped periods, business owners may need to find other ways to generate income. Bitcoin mining could be the perfect option. How much money can you generate from bitcoin mining? There are a couple of things to consider.
First of all, you need to know the current price of bitcoin. As of right now, bitcoin is selling for $8600 apiece.
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Electricity costs are also going to play a large role in the profitability of your bitcoin mining operation. In regions with low electricity costs, it will cost around $3000 to mine a bitcoin. In more expensive states, the cost is around twice that.
You can still generate a decent profit mining bitcoin even if electricity costs are high. However, it may make more sense to set up a location with a bitcoin mining rig and it area with lower electricity costs to improve your profit.
Finally, you need to consider the processing speed of your computer or bitcoin rig. This will be the biggest factor that you need to consider. It may be necessary to invest in a system with a higher processing speed or more sophisticated break if you want to make a decent amount of money. According to an analysis from Tough Nickel, it isn’t unreasonable to expect to earn $17 a day from bitcoin mining. You can earn more if you invest in a $10,000 rig. However, if you can only invest in a computer or two, this is still a great source of supplemental income, which may prove to be very helpful while you are struggling with limited cash.
Use crypto as a venture capital source
Raising capital for a new startup in 2018 is more difficult than it was a decade ago. The financial crash made most financial institutions much more conservative about issuing loans. The institutions that do offer loans tend to charge much higher interest rates. It is often hopeless for businesses without a cash flow history to get a loan, unless the owner has sufficient collateral or a history of running other successful companies.
If you want to get a cheaper loan, it is a good idea to use a peer-to-peer lending network. You won’t get as large of a sum of money and will need to actively market you’re offering. However, it can be a much cheaper way to fund your business if you need a small sum of money and plan to continue running a bootstrapped business.
A growing number of P2P networks use crypto currency. You should look into using one of them.