Can cryptocurrencies be used in business?

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Credits: Fintechzoo.com. available on Internet: (online, 01/16/2020)

Modern technology allows us to pay without having money physically with us. However, all processes are managed by banks and often limit our flexibility in business due to inefficiency. Cryptocurrencies are a revolution in how we conduct transactions, invest and expand capital. What does bitcoin and other cryptocurrencies mean to the world we live in and how can you use them for your benefit?

Here´s a summary of what you'll find in this article:

  1. What are cryptocurrencies?
  2. How can you use them in your business?
  3. What are the benefits for your business?
  4. What does the future of cryptocurrencies look like?

What is a cryptocurrency?

There are many articles about cryptocurrencies on the Internet, many of which have outdated or inaccurate information. Let's summarize the basic things you need to know about cryptography.

How cryptocurrencies work

Crypto currencies are basically silent agreements that serve as contracts between buyer and seller. They provide an alternative to traditional currencies such as the US dollar or the euro.

The biggest attraction is that the flow of money is not influenced by the government and cryptocurrencies are not issued by banks. Every company can create its own cryptocurrency similar to programming language. The agreement of both parties is important and the bank does not interfere within the process.

3 in 1 package

It is often said that bitcoin represents three things packed in one.

It is a warehouse that has value in itself. We can easily convert a regular government-issued currency (such as a dollar) into the corresponding amount of bitcoin.

This is how transactions are managed. Bitcoin can be used as an exchange tool for goods and services where it is accepted.

And third, it's a record of transactions. Each bitcoin comes from the operation of computers that control the total flow of bitcoin transactions through digital ledger software called blockchain.

"Crypto something"

Bitcoin and things that are called "crypto" are so called because in the core of the global blockchain software system, there is a cryptographic function that transforms data into an unique order that no computer can reverse the process. It is this transformation that serves as an authority and ensures that both parties honestly execute the transaction.

Benefits for your business

1. Less charges

Cryptocurrencies are decentralized. Businesses can benefit from fewer fees, which are usually very low. Responsibility for charges is usually taken by the business that sells the service or product, which can improve customer relationship.

2. Simple foreign transactions

The cryptocurrency is currently considered a global currency, which means that there are no geographical restrictions. This also minimizes problems with foreign fees and currency conversion problems.

3. Waiting time is significantly reduced

Due to the absence of a centralized institution to manage transactions, waiting times for transfers are significantly reduced. This improves not only business efficiency, but also overall customer safety and has a major impact on the company's investments.

4. Rewarding of employees

If you do not want to use cryptocurrencies in bulk, you can start small. Try asking a few employees if they want to be paid at least in part in the cryptocurrency and gradually test different platforms and types of cryptocurrencies.

What about security?

There are different risks with each new technology. It's just like investing in stocks. It is best to start small and gradually test new opportunities.

Best practices

First of all, it is good to mention that you face a great danger with wallets and cash money and debit cards in it. Of course, we do not want to say that to avoid a danger of being robbed, you need to give all the money up for cryptocurrencies. The question here to ask is where am i now in my business? Do I want to take that risk and invest in cryptocurrencies?  Once you decide to give cryptocurrencies a real chance, it is important that you get used to some best practices that will help you work efficiently and safely with cryptocurrencies. Most of the problems with cryptocurrencies come from things that are common in the software world. These are mainly cracked passwords and backdoor software installations. Many people try to get into the crypto world as quickly as possible, but they forget basic security. Try to behave responsibly and especially avoid FOMO (Fear of Missing out).

The future of alternative money

The chaos that occurred after the collapse of the cryptocurrencies in 2018, and many subsequent cyberattacks, have severely damaged the confidence of entrepreneurs and investors. Fortunately, the market has stabilized and today the situation is different. Companies have become accustomed and new investors are investing heavily in startups with cryptocurrencies.

To sum up, today, we can say reliably how individual cryptocurrencies work, how stable they are, and whether it pays off to invest in them. The total value of bitcoins on the market is close to 135 billion USD  (December 2019). If we have a look at large companies like Facebook, they even make their own cryptocurrencies. So now is the time to think about taking part in this crypto market.

Author BIO:

Tereza Cervena is a graduate of Sales Management and European Studies. Works as Research Assistant in Euro-Atlantic Council of Macedonia.