Why Should Small Businesses Adapt Cryptocurrency?
The closest that the concept of “Novo Ordo Seclorum” has impacted the world of finances is cryptocurrency. It did sound utopic a couple of decades ago when the concept of a completely digital and decentralized global currency that resides on an immutable digital ledger – the blockchain – would surpass the value of the dollar.
It was all blown to smithereens when the bitcoin – the first and the most prominent crypto coin – hit the valuation mark of close to $20,000. Today, crypto is in consideration by major financial companies like JP Morgan, big technology companies like IBM and Facebook, and even governments like China, Switzerland, and Malta.
It might not be an exaggeration to say that the world is slowly moving towards accepting cryptocurrency as a mainstream form of payment, and it might not be long before it becomes the order of the day. In fact, it has become so common to create a new currency on the blockchain that there is an increased demand for cryptocurrency development service and cryptocurrency developers.
Any business that does not embrace new technology is bound to sunset into oblivion, and crypto is one such technology. As we have seen, a lot of big brands are associated with this new technology. However, for a technology to become mainstream, it has to be accepted by all businesses at the grass-root level.
A strong use case has to be built for small businesses to accept cryptocurrency. For a small business, it all comes down to profit and cost-effective transactions – both of which can be guaranteed by cryptocurrency.
What are the chances?
The same question could have been put forward regarding digital forms of payments about a decade and a half ago… But today, it is quite unlikely that you will find a small business that does not accept digital payments! The same way, crypto also would face its share of hiccups and deterrence but it is quite likely that crypto will be the order of the future, especially when the entire world is talking about the concept of a ‘global village.’
Accepting crypto presents a wide array of advantages.
The benefits of cryptocurrency
Cryptocurrency is bound to attract new customers. It removes quite a lot of barriers that hold back a small business from growing big. It has been observed that about 39% of people would prefer the addition of the bitcoin as one of the payment methods for general purchases.
What is the greatest disadvantage when it comes to traditional currency is the costs involved in the transaction. The transaction fee is a result of the centralized body involved in establishing trust between the transacting parties. However, since the crypto operates on the blockchain, and since cryptocurrency would have its inherent smart contracts to establish trust, there is no need for a regulatory authority. In effect, it brings the transaction fees almost down to 0. The savings are not only in terms of cost but also in terms of time – transactions are far quicker than regular bank transactions.
With blockchain being the epicenter of cryptocurrency, transactions are final and cannot be reversed. The transactions cannot be overridden and it reduces the possibilities of fraud and offers chargeback protection. Cryptocurrency is not alone or debt like the classic currency. It is impossible to spend what you do not have, and even this factor contributes to the prevention of fraud and chargebacks.
The reason why small businesses remain small is there restrictions in accessing new markets. By adding cryptocurrency, they open up their business to a worldwide market. Since cryptocurrencies are decentralized, they do not have to care about geographic and legal boundaries and transaction fees in line with the exchange rates.
Today, cryptocurrency is a fad, and just like how having a website was a marketing message in itself in the early nineties, accepting crypto is a marketing message in itself! Today, it is quite likely that accepting crypto will enhance your brand visibility.
The risks involved
It isn’t all a better process when it comes to accepting crypto. Cryptocurrency development has its own limits and there are certain spaces where small businesses might not be able to risk these.
One of the greatest risks when it comes to cryptocurrency is its wavering legal status. The regulatory landscape of many jurisdictions around the world hasn’t matured to accept or accommodate crypto.
Since all the records are stored on a universally accessible immutable ledger, it means that all transactions will have to be accounted for and should have taxes paid.
The blockchain, as a stand-alone technology, might be secure from cyber threats. However, when it comes to its manifestation as cryptocurrency, there are external factors like wallets that come into play. These wallets might be vulnerable to cyber-attacks. Since cryptocurrencies are not insured or backed, any compromise on the security of your cryptocurrency ecosystem might result in heavy losses.
Cryptocurrencies are heavily volatile. Today, one bitcoin might buy you a car, and the very next day, it might not even be enough to buy you a meal from McDonald’s. Although there are a few stable coins, the bitcoin still remains the poster boy for crypto, and it is extremely volatile. Small businesses cannot take such chances as every penny of profit or loss accounts for them.
Maybe today, cryptocurrency is not what small businesses might want because of the volatility and the uncertainties in its legal status. However, when this new technology is backed by some of the biggest names in different domains, it is only likely to become mainstream sooner than later.
Under such circumstances, the first one to embrace this new technology is quite likely to emerge profitable and victorious. As we have discussed earlier, cryptocurrency unlocks the portal to global business which has always been considered an inaccessible avenue for small and medium businesses ‘ birthday in some corner of the country.
In the case of technology, it is always the early bird that gets the worm. If you are a small business and if you would like to become future-ready to globalize the reach of your business, all you need to do is get in touch with the company that offers cryptocurrency development services. Although it might not be about creating a new cryptocurrency, they will understand your business requirements and at least create the ecosystem it takes for your business to transact in mainstream crypto coins. With how fast the world of crypto and the wealth of technology is moving, it is only profitable and prefers that you are prepared today to accommodate the technology of tomorrow!