5 Ways Businesses Can Get Into Cryptocurrency

When it comes to cryptocurrency, the decision to get involved is often easier for individuals than businesses

When individuals decide to get into cryptocurrency they only have to think about their personal financial goals and risk, as well as a few technical details like which type of wallet to use. However, businesses have a lot more at stake. There are more people involved and if the investment fails the entire business could be at risk. At the same time, companies have a lot more options for getting involved in cryptocurrency or blockchain technologies than private individuals.

1. Use Cryptocurrency for Transactions

Accepting payments in cryptocurrency is one of the most obvious use cases for businesses. For those who sell a product or service, there is an increasing number of e-commerce and point of sale options, like PundiX, to take a payment in Bitcoin or other cryptocurrencies. These new technologies can also convert these payments immediately into traditional currency to avoid the price volatility of cryptocurrency.

Businesses can also pay their workers in cryptocurrency. However, because of price volatility and limited liquidity, this is still uncommon. Nonetheless, there are some cases where is being done. For example, many blockchain startups pay for marketing campaigns using cryptocurrency.

In general, employees who are already cryptocurrency users themselves are more open to getting paid in Bitcoin. In one recent survey, 65% of cryptocurrency enthusiasts said they would accept being paid in cryptocurrency. 80% said they would be happy to receive bonuses in cryptocurrency. In comparison, a survey of people who are not cryptocurrency users found only 31% were open to being paid in cryptocurrency.

For a company to pay employees in cryptocurrency it would have to track exact rates of exchange for tax purposes, making the process complicated and time-consuming at this time.

2. Acquire a Cryptocurrency or Blockchain Company

Established businesses that are serious about getting into the blockchain and cryptocurrency sectors can look to either acquire or develop a startup or acquire complementary technologies that offer benefits to their existing operations. For example, a bank might acquire a startup developing blockchain technology for payments infrastructure.

3. Join a Consortium or Project

The finance and banking sector is an early adopter of blockchain technology due to the benefits it can offer as a transactional infrastructure. To investigate the technology, lots of banks have joined consortiums to develop blockchains they can use in their daily operations. One example is a collaboration between the National Bank of Canada and JP Morgan. The two banks worked together on a Quorum blockchain project to test debt issuance transactions using the blockchain.

Joining a consortium is an option for businesses in any sector. Cryptocurrency and blockchain groups are being established in every industry from finance, to waste management, delivery services, healthcare to supply chain and logistics. For example, the Toronto-based Blockchain Research Institute (BRI) is working with over 60 companies to find and develop real-world applications for blockchain technology.

4. Develop a Cryptocurrency Product or Service

Businesses with extra funds to invest in growth have the opportunity to develop a cryptocurrency product or service. For example, Deloitte has developed Blockchain Labs, which work with clients to turn blockchain ideas into commercial applications. So far, Deloitte has developed over 30 blockchain-related prototypes in everything from identity verification and payments to loyalty and reward programs. Canadian Jewelry brand Birks recently partnered with BitPay to accept Bitcoin payments.

Financial advisors and fund managers are also learning about cryptocurrency to advise their clients and offer new crypto-based investment products. For example, the Chartered Financial Analyst Institute added blockchain and cryptocurrency courses to its curriculum last summer.

5. Raise Capital Through an ICO or Launch a New Token

Initial coin offerings (ICOs) are alternatives to crowdfunding or equity fundraising through a venture capitalist or an IPO. New businesses can use an ICO to raise capital. Equally, established companies use ICOs to develop new markets and encourage investment.

ICOs also offer a way for companies to create their own “currencies” that can be used for their products and services. Toronto-based startup Polymath specializes in helping companies negotiate regulatory hurdles and launch their own blockchain-based tokens and services.

Learn More About Cryptocurrency or Blockchain Technology

The best way to start using cryptocurrency and blockchain technology depends on the type of business in question, as well as the funds and resources it has available. At the same time, new methods of payment and emerging blockchain technologies are applicable to all industries. Thus, there really are options for any business.

One way for any business to learn more about what blockchain can do for it is to join a blockchain group or community or attend a meetup. As the sector continues to mature these opportunities will grow and many businesses may find they need to get involved or risk being left behind.

Subscribe to my channels Medium and Twitter if you like my articles and want to learn more about blockchain and cryptocurrency projects. If you have any questions about this article, please comment in the section below. Thank you!