Nischal Shetty is the Founder, CEO of WazirX, India’s largest cryptocurrency exchange.
Ever since Bitcoin, the very first cryptocurrency, was released by the mysterious Satoshi Nakamoto back in 2009, cryptocurrencies have been taking the financial world by storm. Even amidst the pandemic of 2020, as the financial industry took a hit and crashed down all over the globe, cryptocurrencies not only persisted but also showed significant growth.
In the past year, cryptocurrencies have indeed pulled a notable number of traders and investors from fiat money to crypto, proving themselves a perfectly good and stable alternative investment.
In a world where everything is gradually adapting to the virtual space to become more accessible to the consumers, businesses need to either go digital or go home. Cryptocurrencies and the technologies behind them are more than suitable to help them achieve that and stay ahead of the rest of the pack.
The benefits of crypto are varied and extensive in number, so there’s more use of cryptocurrencies other than just as a mode of payment.
In this post, we’ve given you a look at how businesses can reap the benefits of crypto, but first, let’s see some primary attributes of cryptocurrency that can help businesses.
There are some basic qualities of cryptocurrency that can suit the many needs of businesses perfectly, namely-
1. Cryptographically Secured: Cryptocurrencies are secured by cryptography, and all information stored on the underlying blockchain behind cryptocurrencies is the same. Therefore, cryptocurrencies give you the maximized security.
2. Decentralized: Most cryptocurrencies are decentralized, as in a network of nodes from varied geographical locations is in charge of network administration, not some centralized authority figure. Plus, there’s also no central storage of information, which makes the job of hackers infinitely more difficult.
3. Immutability: Any transactions, once made with cryptocurrencies, usually cannot be erased or altered, and the records are kept on blockchain ledgers forever. This is because blockchains are inherently immutable.
4. Anonymity: Crypto users operating on blockchains are given a special address, and they can participate in crypto trades with their digital signatures (like social media usernames). This serves to keep them anonymous and protect their personal and financial information.
5. Cost-effectiveness: Various operational costs are almost zero when you use cryptocurrencies since there are no centralized institutions/ intermediaries to pay.
6. Smart Contracts: Now, this is one of the truly unique benefits of crypto. Smart contracts are self-executing contracts stored on top of blockchains that execute when all the terms and conditions preset by the counterparties are met. This is another reason why cryptocurrencies can prove to be incredibly secure.
Now that we’ve got that out of the way, let’s get into the many benefits crypto businesses can reap, shall we?
As we’ve already mentioned before, there are countless benefits of crypto for businesses. Below, we have mentioned only a few, but it’s by no means a comprehensive list, of course.
Forming an Internet of Money
Cryptocurrencies enable businesses to have all payments and financial transactions be done through the internet. Now, you might argue, credit cards and similar payment methods let you do something similar.
So why crypto? Well, credit cards come with some issues. A credit card might need to be processed often, and besides, there’s a financial institution sanctioning the transaction.
With cryptocurrencies, businesses can be in control of their transactions and funds without having to defer to a centralized organization. Customers will have a far more convenient way to pay for various services and products, and transactions don’t need to get past any credit clearances either in this case.
Cryptocurrencies allow the swift processing of payments without the need to pay high fees for it, for both the customers and the businesses.
Cryptocurrencies can allow businesses to receive payments for products and services provided to customers in seconds, and this way, they can gather the revenues they require for funding operations, expanding, etc., quite swiftly.
There’s also the fact that the improved payment processing system also allows businesses to attract more consumers since they would be allowing quicker transactions than their peers.
Maintain Anonymity of All Involved Parties
As mentioned before, cryptocurrencies can help keep privacy intact for all users. With other digital payment methods, the businesses and the government itself can track the users’ movements on the world wide web.
However, while making purchases, customers wouldn’t need to reveal their identities with cryptocurrencies, and neither can anyone track the purchases one has made. Therefore, the benefits of crypto include enhancing consumer security and maintaining customer confidentiality in an online universe.
With credit card payments, hackers and fraudsters often use the chargeback feature to reverse them. However, with the immutability of cryptocurrencies, fraud reduction is also one of the benefits of crypto businesses that can profit off.
The Demolishment of Barriers
Cryptocurrencies make transactions easier - both within the borders and international. With crypto, the many barriers and restrictions of international trading are removed, and even accepting payments in different currencies is made easier.
Whether the transaction is made within the borders or outside of it, they are processed and executed with the same alacrity.
Therefore, with cryptocurrencies, businesses can forego dealing with the complexities of traditional finance, while also being capable of processing payments from global customers. Again, this way businesses can maximize their revenue, plus expand into international territories.
Deft Capital Raising
The underlying blockchain technology for cryptos can give businesses an alternative, more efficient way of raising capital through a process known as the ITOs, or the Initial Token Offerings.
For ITOs, tokens are made available for potential investors that are equivalent to equity or a revenue share in the business holding the ITO. ITOs can prove to be far better suited to this purpose than traditional banks, lenders, private equity firms, or crowdfunding sites, with the transparency and traceability of cryptocurrencies.
The tokens businesses offer on an ITO may have further utility in association with the product or service a company has on offer, aside from just representing a stake in the business.
More Secure And Cost-Effective Cloud Storage
This is yet another of the benefits of crypto. Blockchain storage applications give businesses a convenient way to store information with utmost safety and at a reasonable fee.
Stay One Step Ahead of the Competition
Last but not the least, by adopting cryptocurrency before their peers, businesses can get ahead of them, and gain an advantage over them.
Cryptocurrencies are on the cusp of revolutionizing the global financial markets, and with the aforementioned benefits of crypto and more, businesses have a wide range of innovative and exciting new opportunities on the horizon, should they choose to adopt the technology.