How to Build a Utility Coin for Your Business

Many people who run a business find it challenging to achieve their objectives. Recently, many business owners have discovered that a utility coin – creating a blockchain-based coin for use in your business – can help them achieve their goals. This new mechanism for investment allows the free exchange and distribution of value, with minimal regulation, providing businesses owners with unparalleled freedom.

Understanding Utility Coins

Creating a utility coin is similar to creating a securities coin (like Bitcoin or Ethereum) which you intend to trade as a currency on the open market. With both, you’ll create an Initial Coin Offering (ICO), by scheduling a Token Generation Event (TGE). ICOs, with their unregulated and open space, provide a wide range of opportunities to fund business ventures; however, it’s important to recognize the difference between a security and a utility coin. This distinction is particularly important if you intend to sell your coin to customers in the United States since it’s the federal US Securities and Exchange Commission (SEC) which has set the ‘Howie Test’, which defines whether a coin is considered a security or a utility coin. The Howie Test is applied at the time of your TGE.

A utility coin functions using blockchain technology. However, such a coin may not be legally traded as a currency on the global open market. Instead, companies can use coins to directly map what they do or create. For example, Bananacoin, which uses a utility coin to allow a Laos-based producer of organic bananas to fund their operations by offering a certain weight of bananas in exchange for one Bananacoin. In this sense, ICOs that create utility coins are a secure means of crowdfunding, with a solid basis in tradable commodities.

Utility Coin Tip 1: Make Sure You Have a Product

The first step in building a utility coin is making sure that the coin reflects an offer of unique service. If you want the coin to make a splash globally, you should have a product or project that has the potential to attract investors, with all the benefits outlined for easy understanding. As with all successful business ventures, the product or project needs to be able to solve a problem that people are currently facing.

Utility Coin Tip 2: Release a Whitepaper

Your white paper is one of the most important indicators of utility coin value to potentially interested parties. A white paper is like a prospectus that describes your platform and outlines its roadmap and work process for success. It helps people understand the service your coin is offering and how to best use it to achieve their goals. Whitepapers are also invaluable resources for investors unfamiliar with blockchain technology but need to know how it works.

Utility Coin Tip 3: Have a Community Behind Your Coin

Community engagement is one of the important elements of a successful utility coin. Your coin needs to have clear value to a defined group, with whom you develop a deliberate and clear relationship. You need to make sure that you keep your community active and engaged by:

  • Producing reports regularly
  • Having discussions and conversations with the community
  • Answering questions when they come
  • Providing support

Building a utility coin will take time and you will need to test your coin. In the end, ICOs represent a powerful way of funding your activities and building communities around secure blockchain technology.

0 comments on “How to Build a Utility Coin for Your BusinessAdd yours →

Leave a Reply

Your email address will not be published. Required fields are marked *