The cryptocurrency industry is one of the most difficult to operate in. It is a brand-new industry that is constantly evolving by the day. This makes for a very exciting but incredibly challenging business. We have faced various external challenges relating to the banking industry, gaining trust from consumers, regulation and more. We would say the top challenges bitcoin exchanges face are:
The biggest challenge we face as a business operating in the cryptocurrency space is probably access to banking.
Banking services are essential to the survival of any business – you can’t run a successful business without a business bank account – but unfortunately, most UK banks are reluctant to work with any company operating within the cryptocurrency industry, meaning most have to look further afield for a banking partner, such as Europe or Asia.
Unfortunately in this industry, having a business bank account is something that provides a competitive advantage, something that most businesses/industries take for granted.
In the early days, Bitcoin was the payment method of choice on Silk Road – an online black market and the first modern darknet market, best known for illicit activity.
Silk Road has since been shut down and Bitcoin has gone on to do a lot of great things in it’s 10 short years, but the stigma remains, so one of the challenges we face as a business in the space is helping to improve the reputation of Bitcoin and the industry through education.
Focusing on education, we have introduced helpful tools and resources, like our Learning Centre – a section on our site where we cover the basics of Bitcoin (and other cryptocurrencies) – as well as hosting regular Bitcoin talks for people from all walks of life. Businesses, students, the general public – our talks have become quite popular here on the Isle of Man!
The part we play in the helping to educate people about Bitcoin may be small, but small steps help lead to big changes and over time, the reputation of Bitcoin has slowly begun to change for the better.
The Bitcoin industry is still very much in its infancy, which means that things like regulation are still not a common occurrence.
When we launched CoinCorner, we had regulation in mind as we knew it would come in to play sooner or later. We made sure to follow best practices from day one, which meant that if and when regulation was finally brought in, we would not face the enormous task of having to go back and getting to know our customers.
However, this did mean that we were faced with extra overheads in the beginning, which was challenging, not only to predict the level required but also the extra costs while operating on a shoestring budget.
Over the years, we have worked closely with the Isle of Man Government to help advise and educate on how cryptocurrency works and the best way to approach writing the regulatory guidelines for the industry. Again, this was another overhead (one that was particularly time consuming), but it was worth it to help bring in enough oversight so that the government felt comfortable, but with enough leeway that they didn’t stifle any innovation.
Another “given” for most businesses/industries is marketing. As an online business we focus a lot of our time, effort and spend in to online marketing in order to drive sales (e.g. Google Adwords, social media, banner advertising etc). However, earlier this year, Google announced a blanket ban on all crypto-related adverts on its advertising platform, Adwords, as a result of a rise of fraudulent crypto advertisers. The announcement created a ripple effect across the world of digital advertising, with other big names like Facebook and Twitter quickly following suit to ban crypto-related ads
With our key marketing channels cut off, we were forced to think outside the box and look at ways to advertise our online business, offline. We explored the area of traditional advertising, including outdoor (or out of home) advertising channels such as on the London Underground and in Flybe’s Flight Time magazine. We selected these mediums from a range of opportunities as they allowed us to reach significant numbers of our target audiences and bring Bitcoin into the public eye in a big way.
Speed of the Industry
From one day to the next, our business deals with changes in the Bitcoin industry. Currently in an emerging phase, the Bitcoin and cryptocurrency industry is experiencing a huge period of growth in adoption, especially following on from the Bitcoin bull run of late 2017, where the price of Bitcoin reached nearly $20,000 – an increase of 2000% in less than 12 months
As the technology develops quickly, exchanges operating in the industry are challenged with a number of issues. Over the years, we’ve had to adopt some major changes such as altcoins, regulation, Blockchain concepts, network upgrades, hard forks, ICO’s and more. Because this is a piece of technology that is always being developed and improved, we are constantly at the forefront of the innovation and although this is exciting, it is unbelievably time consuming – not only are we trying to run a business, but we are also trying to keep up with things changing (literally overnight) and having to learn new things along the way
CoinCorner Ltd is an Isle of Man based crypto exchange and wallet provider, whose aim is to increase the global adoption of cryptocurrency by providing easy to use technological solutions.
They are one of the most compliant exchange in the world, licensed by the Isle of man financial services authority and must therefore comply with its anti-money laundering laws and regulations.