For most of the past decade, opportunistic entrepreneurs have watched with great interest in the growing world of cryptocurrencies. If you’re reading this, there’s a good chance you’re one of them.
This means you’ve likely watched with awe as Bitcoin and its siblings made investors and entrepreneurs wealthy. You’ve read all about the never-ending debate over when and how businesses should integrate cryptocurrencies into their payment systems. You’ve also seen the world of startup funding get turned upside-down by initial coin offerings (ICOs).
What you probably haven’t done, though, is go all-in on a cryptocurrency-related venture. For most, it continues to remain something of an enigma to all but the most technically inclined.
But that doesn’t mean you should sit on your hands and be a bystander. To help you, here are three areas of crypto development that have the potential to grow.
Decentralized Finance (DeFi)
You could easily make an argument that decentralized finance (DeFi) is the one area of crypto development with the greatest potential for entrepreneurs.
Right now, money flows through central governments and banks. DeFi, using cryptocurrency, hopes to decentralize it, making a truly global monetary system uninfluenced by any one government entity. Runaway inflation in poor third world countries would no more with DeFi. Essentially, it’s meant to replace much of the traditional banking infrastructure, and to say that it’s booming would be an understatement.
The trouble is, as others have rightly pointed out, DeFi development remains hampered by some technical limitations that are keeping it from having a true, breakthrough moment. However, with all the investment and energy going into the space, it may have a break out moment.
Much of business success is timing, and now might be the good time to start researching opportunities in DeFi. There’s high interest, active technical development, and plenty of room for innovation.
Transaction Privacy Platforms
Perhaps the greatest benefit from the explosion of cryptocurrencies has been the blockchain, or the underlying technology behind cryptocurrencies. It allows the world to share a digital ledger of activity, like a massive shared Google Spreadsheet, that no particular entity owns.
From the beginning, experts across industries have suggested that the blockchain, and not necessarily cryptocurrencies, may lead to a huge wave of innovation given its potential for both transparency and privacy.
So far, though, there has been no breakout use of blockchain technology. That means though you can pick up on the failed lessons of others.
Moreover, there are open sourced platforms you can build on. For example, in mid-2019, Ernst & Young introduced the open-sourced Nightfall platform, which is their solution to facilitate private transactions on the Ethereum blockchain.
Using Nightfall, you could build a privacy-focused transaction system. You’d face a short product development cycle, no licensing fees, and little in the way of competition. You could, for example, create a platform that gives the consumer control of the credit score information.
In a world where privacy is increasingly important, blockchain offers unique opportunities to capitalize on this trend.
Alternative Investment Systems
As you might know, the most widely known applications of cryptocurrencies are as investment vehicles. Cryptocurrencies are an asset class, and depending on your investment philosophy and risk appetite, it can be a way to diversify your portfolio or improve your returns. Bitcoin, for example, through the first half of this year outperformed many major asset classes.
Still, the gains in the crypto markets haven’t been shared by the vast majority of investors. Why you might wonder? It’s because most investors still look at cryptocurrencies as a poorly-understood, under-regulated marketplace that’s riddled with scams and fraud.
And in many ways, that’s true.
But where there’s uncertainty, there’s opportunity. Consider Axion, for example. It’s a crypto-alternative to a traditional certificate of deposit (CD) account that promises to offer a steady 8% inflation-based return. It’s an idea that bridges the gap between mainstream investors and the world of cryptocurrency.
Similarly, how can you bridge the wave of new asset classes from legal financing to artwork to the world of crypto? We’re still in the early innings.
Opportunities Await. Start Learning
Needless to say, in emerging spaces like blockchain and cryptocurrencies, there are no shortage of opportunities. Don’t let any lack of in-depth knowledge on the subject prevent you from learning more. You can take free college level courses to learn the about the block chain, and by networking and reading current news, any entrepreneur can find a way to innovate in the space. As the world continues to evolve, you just might be in the right place at the right time.