July 17, 2021
6 minutes to read
Opinions expressed by Contractor the contributors are theirs.
The growth of blockchain and cryptocurrency has been skyrocketing for several years now, and the hype surrounding it is not expected to end anytime soon. More and more people are invest in cryptocurrency every day, and the industry has seen innovations like cross-border payments, real-time IoT operating systems, NFT markets, decentralized finance (DeFi), identity management systems and more.
True, cryptocurrencies are expected to become the future of money in the years to come, but the blockchain technology behind them is already changing the way businesses operate. Because blockchain provides a secure ledger for all transactions, it can be used to make businesses more efficient. From decentralized security to efficient data management and improved transparency, blockchain has many advantages and is used for various applications in various industries.
Walmart and other big companies are already using blockchain to track their supply chains. British Airways is another notable company that has embraced blockchain technology. They used blockchain technology to coordinate data thefts between airports in London, Geneva and Miami.
They are also putting to the test a new blockchain-based VChain verification service, which could totally revolutionize the registration process if successful. E-commerce giant Alibaba is also using a blockchain-based solution to track luxury goods sold on its various websites. Today, the power of blockchain is being tested in a variety of fields including education, healthcare, and almost everything in between.
Here are some major benefits of blockchain and cryptocurrency that could potentially revolutionize businesses around the world.
Fast and secure transactions
Blockchain and cryptocurrencies make transactions fast, easy, and secure, which can help businesses run more efficiently. Credit or debit cards can sometimes take a day or more for transactions to complete and reflect in your account, but crypto transactions can be completed instantly. In addition, these transactions will remain confidential.
Your transaction will not be recorded by financial intermediaries such as banks. You also do not have to provide your personal information or any other identifying source such as a driver’s license and government issued identification. As a result, your identity and financial data will be protected.
Related: How to Identify and Avoid “Shitcoins” in Cryptocurrency
Low transaction fees
Businesses often perform hundreds of thousands of transactions every day. While Bitcoin and other crypto payments are just becoming mainstream, credit card payments are already widely accepted, but come with high transaction fees. Adopting cryptocurrency for these transactions means that you will pay significantly lower transaction costs than you would have if you used credit cards or other means from banks or other financial institutions.
Since blockchain-enabled crypto transactions do not require a third party or central authority, this paves the way for decentralization of business transactions. Therefore, no one will monitor your information. Only the sender and the recipient will be involved.
Related: 8 Benefits of Blockchain for Industries Beyond Cryptocurrency
Reduced risk of fraud
Unlike traditional card payments, which can be canceled using the chargeback feature, payments in Bitcoin and other cryptocurrencies cannot be canceled. Since every transaction is securely recorded, there is a long-term audit trail that can be used to track transactions and verify their authenticity. As a result, every transaction has greater audibility and accountability, greatly reducing the likelihood of fraudulent transactions.
This audibility feature can also be used to track other assets, allowing businesses to maintain a database of various types of information about those assets.
Increased supply chain traceability
The use of blockchain-based applications makes it easier to track products and goods as they move through the various stages of the supply chain. The ability to monitor suppliers in real time, eliminate human errors in updating data, and use smart contracts for payments is expected to transform the global supply chain industry.
As the supply chain becomes more efficient, organizations can focus on reducing other costs and more efficiently streamlining other processes, including production.
Cryptocurrencies facilitate cross-border payments and thus reduce barriers to international trade for various businesses. As a result, businesses can accept cryptocurrency payments from customers in any part of the world. Not only does this improve a company’s global outlook, but it also gives a significant competitive advantage.
Improve your basic abilities
Because business adoption of cryptocurrencies is still a new concept, businesses can improve their core capabilities and improve their prospects among their competitors by implementing them early on. By offering crypto payments, they can also attract new customers interested in the crypto field.
With cryptocurrencies having the potential to overthrow even central currencies, and even governments now planning to offer their own central bank digital currency, this will certainly put businesses well ahead of the competition.
New sources of capital
Adopting cryptocurrency can give businesses greater access to capital and liquidity pools, thereby significantly increasing their investment options. Initial coin offerings (ICOs) are one of the most common ways for businesses, especially startups, to raise capital through cryptocurrency.
Similar to the traditional method of Initial Public Offerings (IPOS), through this method, companies that raise funds through ICOs typically give back to investors through cryptocurrency tokens like Bitcoin and Ethereum.
Potential hedge against inflation
Even though cryptocurrencies often come with high volatility, the market is currently experiencing strong growth and companies can undoubtedly use cryptocurrencies as a hedge against inflation in difficult market and economic conditions. Bitcoin is one of the most important cryptocurrencies that several investors and companies have invested in to use as a hedge against inflation and the ever-changing dynamics of the market.
Although Bitcoin is one of the more volatile cryptocurrencies, most people choose Bitcoin as an inflation hedge primarily because of its limited supply and its appeal when its actual returns approach zero.
Improved treasury function and operations
In addition to simply facilitating crypto payments, businesses can also move away from the payments realm and implement cryptocurrency and blockchain technologies in their operations and treasury functions.
Companies certainly have a lot of potential to improve and maximize profits once they seriously embrace cryptocurrencies and blockchain technologies. By considering stakeholder needs, overall strategy, and short- and long-term goals, companies can create the right crypto adoption strategy and then work towards its implementation.
Related: 5 Things To Consider Before Investing In Cryptocurrency