Cryptocurrency has the potential to make exciting changes to the business landscape. Even small businesses can take advantage of its features and ensure their success. Financial businesses are poised to reap the benefits of cryptocurrency, enhancing the transparency and privacy of their transactions. Saleh Stevens, a tech and blockchain expert, describes the ways in which cryptocurrency will change the worlds of finance and business.
Investment Potential
While cryptocurrencies such as Bitcoin have fallen from their dizzying heights of late 2017 into 2018, these currencies can still be important investments for a small business. Diversifying your portfolio by investing in cryptocurrency means that you will have an easily liquidated investment. Cryptocurrencies are highly private in nature and take security seriously.
Quick and Secure Transactions
Bank-to-bank transfers take time. Using cryptocurrency, transfers can be instant. Blockchains are distributed ledgers that are stored across thousands of nodes, or machines connected to the network. The security comes from the method in which “blocks” are stored and transferred along the “chain”. Since there is no central bank or entity involved in managing transactions, the potential for hacking is next to none.
Businesses should be aware that their cryptocurrency is only accessible with the original alphanumeric key. In the past, there have been instances when a cryptocurrency investment has been lost because the key was lost. This is one instance where cryptocurrency does not measure up to traditional banking methods where there are a number of different ways to access the accounts.
Smart Contracts
With blockchain technologies, companies can create robust and secure computer networks. Smart contracts are one of the best features of cryptocurrency. This feature can speed up transactions and make them less expensive. It can help to reduce business management errors since it is an automated system. The risk of fraud is reduced, and the parties assigned to the contract can trust one another.
Cutting Out the Middlemen
Another lesser-known advantage of blockchain and cryptocurrency is that it can cut down on the costs associated with intermediaries like real estate firms, lawyers, banks, and merchant networks. It will be necessary to hire blockchain-savvy employees to handle these functions, but overall, the personnel and funding needed will be lower.
Banks are not eager to see cryptocurrencies take a more prominent place in the business world. They make a great deal of their money from fees and expenses that are incurred when money changes hands. It may be that banks are slowing their adoption of cryptocurrency because they are aware that their market position will be diminished when cryptocurrency succeeds.
Making Online Shopping More Secure
Crypto can help online transactions become quicker and more secure. While credit card information is sometimes hacked, leaving customers and businesses vulnerable, cryptocurrency is secure. It can also protect a user’s personal information, lessening the likelihood of identity fraud.
Easier International Transactions
The process of converting currency can be tiresome. With blockchain, the same currency can be accepted around the world with no need to convert it. This also means fewer rules and regulations can be applied to the currency, speeding things up and removing barriers to success.
Anonymous Transactions
One of the most exciting aspects of crypto is that transactions can be completely anonymous. This means that a financial trail is much harder to create, giving users privacy. This could be misused, with cryptocurrency used to pay for illegal activities, but it has great potential to be used for the general public as well. Many people enjoy the convenience of digital payments but are disturbed by the potential of someone following their financial trail.
Stabilizing Local Economies
Many developing nations have difficulties with unstable currency. If these nations moved to a blockchain system, they would find that they had a much greater ability to control the movement of their currency. It is hoped that cryptocurrency will be more stable than currencies from developing or distressed nations. This will help to keep inflation down and protect people from the whims of local government.
Balancing Risk with Reward
Businesses need to be aware of the risks of using cryptocurrencies. The markets can be unstable, and large investments can be lost quickly. Businesses should treat crypto as a high-risk investment. Another risk comes from the possibility of coins being removed from the market. There are few mechanisms available to cash out these coins and to give the money back to the original investor. Businesses must also be aware of the potential risk to their reputation that comes from using blockchain.
As the years go by, blockchain will continue to take its place in the financial and business worlds. Saleh Stevens encourages all business owners to follow cryptocurrency news and to decide how to incorporate this technology into their daily lives.
