What are the Business Benefits of Cryptocurrencies?

By July 24, 2020July 30th, 2020No Comments
what are the business benefits of cryptocurrencies?

Apart from their surging popularity as attractive investable assets, cryptocurrency(ies) can also help businesses grow and scale up tremendously.

Businesses must evolve with time. They must incorporate the best practices to reduce costs, accelerate payments, and maximize profits.

But it so happens that current commercial setups hinder the progress of firms. Especially those that are small and medium in size.

Even self-employed professionals (read freelancers) who work alone to cover daily costs and expenditures have a tough time getting their work’s worth due to undue interference by third party ‘payment processing’ companies.

In such a scenario, cryptocurrencies can greatly prove beneficial for individuals and companies.

Their decentralized nature guarantees the smooth operation of businesses without many roadblocks.

So, without further ado, let’s dive in and examine the business benefits of digital currencies!

Low Transaction Fees

Business transactions involve multiple money transfers done throughout the month, and even during the day (in some cases).

The transaction fees in such transactions need to be lowest for firms and individuals to realize their appropriate worth ( profits + operational costs).

Generally, that’s not possible due to intermediary payment companies deducting their commissions for ‘processing transactions’. Cryptocurrencies eliminate the need for middle-man payment processing.

Their underlying distributed peer-to-peer technology (also called blockchain) ensures low transaction costs and direct and transparent exchange of funds between two transacting parties.

Global Acceptance

By their very design, cryptocurrencies have a global presence. Bitcoin (BTC) and many other cryptocurrencies have strong communities backing them across the world.

That’s because of their underlying mathematics and algorithm-driven protocols.

One doesn’t need an elaborate setup to send and receive crypto funds. Just a simple wallet, that’s all. Every transaction can take place from that particular wallet.

Another way to access cryptocurrency assets in India is by buying/trading them on WazirX. To know more about that in detail, check out the video below:

Complete Ownership of Funds

Often product sellers and service providers have their accounts frozen by banks or their business accounts shut down by centralized payment companies.

Bitcoin (BTC) or any other cryptocurrency solves this. Due to the decentralized nature of crypto-asset networks, there are no hold-ups. Fund transfers happen after consensus is achieved between network participants.

This also eliminates the risk of ‘double spending’. Double spending is a situation where fraudulent folks can duplicate a certain transaction and extract the same amount as that involved in the exchange.

What is Double Spending?

With cryptocurrencies, your payments and your funds remain your own.

Investment Benefit

Cryptocurrencies can be accepted as payments but unlike usual state-backed currencies, they can double up as investments too. And why?

Because over a period of 11 years since the inception, the cryptocurrency market cap has grown from absolutely nothing to $300 billion.

During the famous 2017 rally, cryptocurrencies had a combined valuation of around $850 billion!

Cryptocurrency market rally to $850 billion
Cryptocurrency market rally to $850 billion, Source: CoinGecko

Investors have reaped a six-figure return on their bitcoin (BTC) investment from 2010 to date.

New Customers, New Business Prospects

For small or medium-sized firms, accepting cryptocurrencies can open up new business opportunities. Early cryptocurrency adopters/users can become prospective customers for purchasing goods or services.

This, in turn, will accelerate the process of acceptance of innovation as per the graph below:

diffusion of ideas
Law of Diffusion of Ideas, Source: Cornell University Blog

As of date, companies and organizations have already joined the ‘businesses adopting crypto’ bandwagon. Some of the notable names include:

  • Microsoft – Global IT giant, Microsoft accepts bitcoin (BTC) payments for Xbox games, music, purchasable content from the Windows store. Bitcoin can be added as a balance to the Microsoft Account which in turn can be used to make payments later. However, Office 365 subscriptions cannot be purchased with bitcoin.
  • WordPress – One of the largest blogging websites in the world, WordPress permits users to conduct BTC transactions. Various plugins can be integrated with the option of bitcoin. WordPress.com grants complete flexibility for BTC payments, which makes it a prominent supporter of the first virtual currency.

Other Business Partnerships

Organizations like Samsung are amongst the first multinational corporations in the world to expose blockchain-based solutions to users.

Recently, the Korean electronics giant partnered with the Stellar Development Foundation to allow blockchain developers to produce Stellar based apps for Galaxy Smartphone users.

Apart from the Samsung Blockchain Keystore also supports apps built on TRON, Ethereum, and Klaytn.

Ripple is a payments company that has onboarded over 200 banks and financial institutions to conduct cross-border financial settlements on its proprietary payments network, RippleNet.

RippleNet uses the cryptocurrency XRP to process transactions.

The business applications for cryptocurrencies and blockchain technology are manifold. The world is slowly warming up to the idea of crypto assets pervading the current financial and industrial systems.

It’s only a matter of time before digital currencies become a way of life just like email and the internet.

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