Read This Before Starting A Crypto-Business | Hacker Noon

Kirill Hacker Noon profile picture


Blockchain enthusiast developer and writer. My telegram: ksshilov

The crypto space has very few barriers to entry when it comes to building a team and launching a product. Both developers and the community flock to new projects, even if they are competitive. 

But beyond the initial concept, launch, and successful token trades, there is a series of steps that ensures a project will thrive for years. 

Choosing the Development Stack

Tools to deploy crypto projects are already abundant, and there are several well-established options on how to manage your project. Whatever development stack in crypto you choose will hinge on several leading networks, each with its own underlying asset, block production rules, and programming language for smart contracts. 

Selecting a development stack has implications for multiple aspects of a crypto business. The choice of a platform affects: 

  • The available pool of developers 
  • The potential community of supporters 
  • Access to exchanges 
  • Credibility 
  • Institutional clarity and regulations 
  • Technological requirements

The competition and development pressures for crypto projects revealed several clear leaders that attract the most business in terms of development, distributed apps, financial solutions, and distributed computing. The leading platforms include: 

  • Ethereum 
  • Binance Chain/Binance Smart Chain 
  • EOS 
  • TRON 

Beyond these primary blockchains, there are several other platforms growing their adoption, albeit at a slower pace. These include Polkadot, NEO, IOST, Ontology, VeChain, among others. There are also platforms that are still in the early stages and host a few apps, such as Tezos and Cardano. 

There are also several great resources users can become acquainted with to track the development efforts of various projects, such as DappRadar and CryptoMiso. 

I talked with Anton Dziatkovskii, co-founder of Platinum – a  dApp and crosschain solutions developer for Polkadot, Kusama, Ethereum, etc –  about how the market has changed since 2020. Here are his thoughts:

“The main trend of 2020 was yield farming. The trend of 2021 is NFT. But the core value of the project lies in the simplicity for the user. It’s too early to write off DEX, AMM, aggregators, and fully move to NFT. DeFi should be like an ecosystem of different services which allow the user to solve most of his tasks.” 

How to Hire and Pay Employees

Working arrangements in the world of crypto are a paragon of flexibility. The work itself comes in many forms, from hired developers to voluntary calls for code improvements. In the early days, crypto projects were either a one-man effort or open-source and reliant on voluntary contributions. The latter option, however, did not work out quite so well in some cases. For instance, one Bitcoin Gold contributor on GitHub injected a tainted wallet and used it to steal user funds. 

Other projects restrict access to their GitHub code repository, thus limiting contributions to pre-screened developers. 

But a modern crypto business requires much more than merely running blockchain code. Projects also need marketing experts, communications and social media expertise, as well as legal counsel and regulator outreach. While developers often wear many hats, there are also multiple avenues for hiring additional team members. 

Social media and the Bitcointalk forum have been staples in calling for project engagement. Other projects, like Binance, organize theme-based hackathons to attract new talent. 

Hiring may be ad-hoc, but platforms are already starting to aggregate the demand for crypto-related jobs. offers not only a resource for job searchers, but also for projects to tap into the talent pool.

The Gitcoin project takes the best of both worlds, combining contributions to GitHub with mentoring and rewarding the best contributors with Gitcoin. 

How to Lock In Crypto Earnings

In the end, a crypto startup has to be profitable. Yet, the community rarely looks kindly on projects that rush to cash out. In fact, selling too early can make a project look like an exit scam. And as such, treasuries and developer bounties tend to be locked for periods of a few months to a few years. 

Projects like Lisk are very upfront about the sales from their ICO treasury, recently announcing the OTC sale of 300 BTC to finance operations. A general idea of how projects cash out their initial financing, and whether they hold onto their crypto balance, can be found through Diar research

In 2021, there are multiple tools to avoid cashing out all of the proceeds while still making gains. While risky, projects can use some of their crypto treasuries to supply liquidity for their token on decentralized algorithmic trading exchanges, like Uniswap. 

Cashing out through the banking system poses its own array of problems, as startups may be hard-pressed to learn all the limitations and regulations or negotiate with a banking partner successfully. 

Who Makes Money in the Blockchain World?

There are many other business models in the blockchain world that do not center on a software product or a platform. Some of the cash cows in this space include centralized exchanges as well as data and service companies like ConsenSys or Glassnodes.

Miners make up a significant part of the crypto ecosystem, with an economic logic of their own. Decentralized and algorithmic exchanges also make earnings by supplying some of the most important infrastructures in the space. 

Mining BTC is currently one of the highly competitive but profitable operations, and the pools that manage to gain block rewards are breaking even at around $10,000 per BTC, even including hardware and electricity costs. 

How to Tackle the Main Crypto Startup Problems

We already touched upon the chief challenges of building a crypto business. For most startups, each step involved ad-hoc solutions and an element of luck when it came to the skill and even goodwill of developers. 

While some projects like Lisk and Cardano allow Javascript for their distributed apps, other platforms rely on lesser-known programming languages. Solidity is one of the must-have skills for Ethereum developers and one where the competition for talent is the biggest. 

Other chains, such as Polkadot, rely on Substrate, a modular open-source language. The other alternative is Vyper, a programming language that also communicates with the Ethereum virtual machine, but in a more intuitive, readable way. The Parity wallet team uses RUST to communicate with Ethereum, due to its capability of creating asynchronous smart contracts to make calls to the blockchain. 

To make sense of this complexity, a curated business launch is one option. While launching a smart contract is easy on the surface, it can have hidden flaws and lead to significant losses. The Polkadot project is highly aware of this, as most of its ICO funds ended up locked forever due to an unaware user making a call to a smart contract. 

High skill levels in all programming languages of choice mean a lower opportunity for mistakes in smart contracts. 

For projects with a more bottom-up approach, there are other talent aggregators.

The Gitcoin project, for instance, rewards open-source contributors to the Ethereum network. Participation is voluntary, but the developers get vetted and mentored while expanding their skills with Ethereum’s functionalities. 

The Big Question: How to Cash Out? 

It is possible to keep crypto coins and even multiply them within the ecosystem of exchanges and other projects. However, this exposes a business to unpredictable risks and wild market fluctuations. At some point, covering costs with fiat becomes a necessity. 

Unfortunately, banks have shown reluctance to work with crypto projects. This is mostly due to the difficulty of proving the origin of funds to satisfy anti-money-laundering regulations and anti-terrorism finance rules. 

Brokerages will offer somewhat limited opportunities to cash out, with hefty fees and market rates that may not be the most favorable. Then comes the question of moving the funds between banks, where limitations on large transfers may apply. 

The best approach is to use the record-keeping capabilities of wallets, as well as exchange trading histories when this applies. Services like Chainalysis may offer a clearer view of a wallet’s interaction.

This way, there may be evidence that the wallet owner has not used coin mixers and has not contacted blacklisted addresses. Communication with banking and finance institutions is essential, as they may be behind on crypto novelty, but are quickly catching up.

Cashing out may require communication with banks, as well as strict recordkeeping. Crypto income comes from many directions, including fees, mining block rewards, developer bounties, or other incentives. Exchanges between coins, if profitable, may also be a taxable event that needs to be documented. 

Building a successful crypto business is a multi-step project. In 2021, the rule is for most new startups to strike up partnerships so that no part of this project is re-discovered anew. Specialization is beginning to create expert projects with very specific blockchain uses, going beyond digital cash or simple financials.

The drive to apply blockchain and decentralized networks to Web 3.0 applications continues, requiring high-level distributed app building. Launching a crypto business is a mix between highly local legislation and an international talent pool with both a competitive spirit and multiple opportunities for cooperation. 

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