Digital currencies often have a fixed supply limit which makes them somewhat similar to commodities like gold and silver. Yet, they also store value and can be exchanged at certain rates like any other fiat currency.
In essence, they share the best of both worlds. What’s more, they are purely digital.
As a result, in recent years, digital currencies have been steadily growing in popularity with more and more customers opening their eWallet accounts.
The demand has certainly been growing and bigger corporations such as Amazon and Microsoft have already followed suit.
But, what does this all mean for small businesses, startups, and the business scene as a whole?
Read the full article below and find out!
1. More payment options for customers
Having more payment options will make it a lot easier for customers to purchase your goods and services, boosting your overall customer experience as well as your profit margins; the more the better.
Yet, since cryptocurrencies are still a relatively new invention, some small businesses are somewhat skeptical of its use.
However, according to the Global Payments Report, in 2018 wallets accounted for an estimated 36 percent of all online payment methods across the globe and some 16 percent of all point-of-sale payment methods.
What’s more, by 2022 these numbers are expected to rise to 47 percent and 28 percent respectively.
Accepting cryptocurrency will not only attract a much wider audience but will also increase the convenience of the whole payment process. Just take a look at what PayPal and apps such as Cash or Venmo did for fiat money.
Hence, it shouldn’t come as a surprise that companies such as Amazon and Microsoft already accept bitcoin — the cryptocurrency flagship.
2. Faster transactions
As the age-old axiom implies, time is money. Businesses nowadays have to wait for a couple of days for banks to process their money transfers. With cryptocurrency, this will be a thing of the past.
Businesses that integrate cryptocurrency into their payment methods will enjoy lightning-fast and near-instantaneous transactions, making trade both faster and easier.
Moreover, setting this up is also relatively simple. All you need is a merchant wallet and you can successfully implement the option of digital currency into your accounting software.
Overall, the growth potential of startups and small businesses using this innovative payment method is simply enormous.
Customer satisfaction plays a huge role in retaining existing clients and customers, and cryptocurrency offers the optimal customer experience with its easy-to-use and fast transactions.
3. Decentralized trade for digital currencies
Unlike fiat money, digital currencies are not made by the government and they are not regulated by banks via treasuries and centralized ledgers. They are created purely by “miners.”
These tech-savvy individuals use specialized crypto-mining tools and hardware to compete with other crypto miners in order to solve complicated algorithms upon which they are awarded small amounts of cryptocurrency.
In the process, they keep a decentralized ledger of transactions alive and create new coins out of blocks that businesses and consumers can use for trade.
Hence, digital currencies are regulated by the community itself which successfully cut out the middleman in the form of centralized banks and sovereign governments, making trade more fluid and instantaneous.
4. No processing fees
One of the main advantages of not using an intermediary is the complete absence of processing fees.
Cryptocurrencies are purely digital. And, as such, there’s no one to facilitate the process and get all the gravy.
This is nothing to sneeze at as credit card transactions can cost companies some three percent of the whole transaction in charges.
In essence, all transactions are made directly peer-to-peer in real-time.
As a result, startups and small business owners can eliminate their cash flow issues and save on costs by implementing cryptocurrency into their payment options.
In addition, this will also help them compete with other brands as they will be able to lower their prices (somewhat) due to the lack of processing fees.
5. Less credit card fraud
The Internet is plagued with various scams and credit card frauds, which has a profound effect on business.
As a result, a lot of people shy away from online shopping and e-commerce, in general, fearing that they too will be a victim of such unscrupulous acts.
However, when it comes to cryptocurrency, coins cannot be counterfeited. Due to the specific nature of how they are created and stored on the digital ledger via blockchain technology, digital currencies are effectively scam-proof.
What’s more, there is also the fact that bitcoin transactions cannot be undone once they are made, removing credit card fraud out of the equation as well.
If anything, digital currencies will make the Internet a safer place; at least when your money is concerned.
6. Improved security
Digital currencies all come with an ace up their sleeves, blockchain technology.
Now, the reason why this innovative technology makes transactions safer is twofold.
First of all, it encrypts each block on which data is stored making them almost impossible for hackers to decipher.
Secondly, it has an embedded “consensus protocol”; meaning, all the adjacent blocks in a network have to agree on a shared history.
To erase data, you would need to remove the whole chain, thus making it impervious to modification or manipulation of any kind.
Additionally, as previously mentioned, data is not stored in a centralized location but on a shared network between the various users. Therefore, it cannot be attacked directly.
This technology can be of great help to startups that are currently one of the major targets of cyber-attacks.
Yet, this does not mean that eWallets cannot be hacked or breached. They work just like any other account or profile on the Internet.
Companies, big and small, still need to pay attention to their safety protocols and security standards, if they wish to guard their business data and secrets.
At the end of the day, digital currencies are still a relatively recent concept.
It will take some time for people to truly get acquainted with the term, and even more time before we see its full impact on the business sphere.
Nobody knows for sure what the future may hold for cryptocurrency; that’s why it’s all so exciting.
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Diana Smith is a full-time mom of two beautiful girls interested in the latest SEO and social media news.