It‘s a known fact that business is about making money. The procedure is a rather simple one – people trade their time and skills for money, in our case, fiat currencies or digital currency. The new and emerging blockchain technology and cryptocurrencies have introduced a new way of money making. They have been growing in popularity; quite a number of companies are exploring the endless possibilities of the blockchain technology while other startups try their best at launching an ICO. If cryptocurrencies are so great, should a business start accepting them as payment?
First, we should specify what is what.
Fiat currencies are your regular US dollar bills (or any other currency) issued by central banks. Yes, fiat currencies have a central authority and bills are printed in thousands every second. In general, it’s money without intrinsic value but has been established as money.
Where do you use fiat money?
Pay your bills, taxes, take your spouse out for dinner, buy the thing you need! Also, you get paid in fiat (or directly to your bank account).
What about crypto?
“Cryptocurrencies” is the buzzword of today’s society and digital money. The most popular cryptocurrency is Bitcoin. Thanks to this guy, we were introduced to the blockchain technology that is set to change or even revolutionize the industry by making sure that cryptocurrencies are decentralized and distributed. So, unlike fiat money, cryptocurrencies are decentralized, distributed, they don’t have a central authority looking over them, and in most cases, it’s anonymous.
What are the reasons businesses should accept cryptocurrencies?
1. Pay less for transactions
When businesses accept credit cards, you pay around $0,10 per transaction and an additional 2% fee for a low-tire merchant. Now let’s compare this to a fee of $0,01 using Litecoin or even $0,00004 using XLM. Of course, everything depends on the cryptocurrency you are using; some have higher or lower fees.
2. Transfer money instantly
Cryptocurrency transactions are fast – you can receive money the same minute they are sent out or in a timeframe of 10 minutes. If you use a credit or debit card it usually takes 1 to 3 business days to transfer. Moreover, banks or credit/debit card companies vouch that the funds are transferred, and this leads to trust building. Businesses are assured that the money will be transferred in a few days.
3. Convenience – you have it anywhere you go
With cryptocurrency businesses can make transactions using a QR code. There is no need to buy expensive sales equipment. On the other hand, they would need to invest in an API to connect their business to the blockchain and automate internal systems.
Also, you can convert digital currency into dollars with just a couple of clicks on your phone once you get the funds. You can even automate the process so the funds get converted to dollars as soon as they are received making losses due to volatility less likely.
And the best thing – there is no need to look for an ATM or carry cash around with you.
4. Cryptocurrency is anonymous
Debit and credit card transfers are seen by banks and anyone else who works with your account. On the other hand, cryptocurrency transactions are anonymous – you only have the public key and the amount transferred. So if the need arises to stay anonymous when purchasing something, crypto could be the best solution.
5. Competitive advantage
Since the words “cryptocurrency” and “blockchain” have become the buzzwords on the internet, they could actually mean more revenue for the company, for example, a cryptocurrency ATM in Amsterdam’s Airport. If businesses targeted people who invest in crypto or are interested in the industry, they would have a competitive advantage over their competitors who don’t accept crypto.
6. Cryptocurrency is transparent
Cryptocurrency transactions are recorded on a blockchain – a digital, decentralized ledger. Fiat money transactions are kept on business records or centralized bank ledgers. The cryptocurrency blockchain is a distributed network, meaning that every person has a copy of the blockchain, as well as a copy of a particular transaction. Also, blockchain assures that it’s not possible to tamper with transaction data.
7. Volatility will make it or break it
While fiat currencies have a set value, cryptocurrencies are volatile. Just before Christmas Bitcoin reached an all-time high of $20,000 – if businesses were accepting Bitcoin before the price jump, they would have made a profit. In contrast, the volatility has its risks. Bitcoin price plummeted just as fast as it reached its peak, sitting at around $6,620. For example, 2 large pizzas bought for 10,000 Bitcoin in 2010 were worth around $30 at the time, today the same amount of Bitcoin equals $66 million.
8. Worldwide availability
Fiat currencies and regular transactions have high foreign transaction fees or exchange rates. Bitcoin and other cryptocurrencies work all over the world and the fees are the same for every transaction. It would save businesses a lot of money by cutting down on transaction fees.
9. Paper will slowly turn digital
At one point in the future, we will see a decline in paper money, well, paper in general. Not only paper money is wasteful, but it’s also inconvenient. Digital wallets and cryptocurrencies have been growing in popularity for the last few years. More and more people start to recognize cryptocurrencies and create their own digital wallets.
10. Cryptocurrency is secure
Cryptocurrency transactions use cryptography algorithms for security. It’s impossible for other people to access your digital wallet without your permission unless you give away your information. Also, the identity of individuals and businesses is protected from copy-cats. There is little to no risk of getting someone to know your private key. Transaction history can also be found only using the public key.
Sounds great, right?
It does. Cryptocurrencies still have a long way to go before achieving security level of banks and other credit/debit related companies. The biggest problem lies with cryptocurrency exchanges. The most popular crypto exchanges have their security in control while smaller and startup-based exchanges often neglect their code and leave loopholes. For example, Bancor exchange was hacked and $13 million were stolen. Find out how crypto exchange accounts get hacked.
11. Early adoption
The Internet offers a whole new medium to develop business and use innovative tools. Anyone can access and use cryptocurrencies – there is no need to set up business accounts and buy hardware or software for sales. Currently, there is a huge gap between developing countries and the ones using traditional market systems so cryptocurrency opens up a new way to businesses. Also, those who enter the market and contribute to the developing industry will likely see huge benefits compared to those who resist the changes.
These are the main 11 reasons why businesses should use cryptocurrency. Also, blockchain is the underlying cryptocurrency technology that will power lots of new systems in the future – what blockchain use cases can you expect from blockchain companies?
Currently, cryptocurrencies and other types of digital currency are still young, Bitcoin Adoption will take years before it reaches maturity, but once it does, it will be seen as a trustworthy currency and a payment mechanism. Also, security issues often arise on cryptocurrency exchanges when developers overlook their code and leave loopholes that hackers can exploit. It will take time for better, more secure and robust crypto exchanges to arise.
Do you know more reasons why businesses should use cryptocurrencies? Let us know in the comments below!
Images by: Dash Force News, BlockAdopter, Coherentnews, finder.com.au
Visit Tokenlion
Join Our Telegram Group!
Follow us on Twitter and Facebook!
Don’t forget to join our Facebook Group!
Tags: #cryptocurrency #news #bitcoin #ethereum #blockchain #cryptocurrencynews
