How to Use Cryptocurrency in Your Business
Over the past few years, cryptocurrencies have infiltrated our lives. For better or worse, Bitcoin often reminds us of the early days in the dot-com bubble, a trend that eventually created the digital world we access daily from our smartphones.
With history in mind, cryptocurrencies offer many opportunities that we can once again use to our benefit. And there is no audience more prone to this than the average business owner and institution.
While retail chooses to buy Bitcoin as a long-term investment, businesses can do so much more. This is exactly why we wrote this article, and we will analyze some of Bitcoin’s best use cases, whether you are a merchant, corporate, or institutional investor alike.
Ready to delve in? Let’s get into it!
1st Use Case: Paying for goods and services
Paying for goods and services overseas can be a real hurdle. Suppliers from other continents, or partners from other countries; you name it. We all know the complexities linked with payments of this type.
Bank transfers often require a manual authorization, take several days to process and fees take a huge bite out of your profits. The inefficiency of the legacy system requires an alternative, one that we might find in Bitcoin.
The popular cryptocurrency proposes several improvements over fiat currencies, all of which constitute it as a better means of exchange. Let’s take a look at some of the top features:
- Instant transactions that are processed within an hour (6 confirmations), no matter where you are, who you are sending it to, or what day of the week it happens to be.
- Fees are extremely low, as the only expense comes from paying miners a minuscule amount to confirm a transaction. For reference, 7 to 8 figure transactions will usually require an approximate fee of 3 to 5 dollars.
- Transactions are transparent, as they are displayed publicly on the blockchain. This helps merchants and other businesses to confirm the delivery of a transfer, avoiding potential misunderstandings or legal action.
- Bitcoin grows in value over time while the US dollar decreases in value over time. This is because of Bitcoin’s fixed market cap at 21 million compared to the ever-increasing supply of US dollars.
2nd Use Case: Allocate (part of) your cash reserves
Due to the recent economic uncertainty, many institutions choose to invest (part of) their cash reserves and treasuries into Bitcoin. To cut a long story short, they are slowly coming to realize that the endless QE packages on a global scale will increase inflation rates, which in turn decreases the value of their money.
Bitcoin is, as Christine Lagarde of the European Central Bank puts it, an exit valve from the system. It helps users protect the value of their money over time, acting almost like a battery of value.
MicroStrategy, Square, PayPal, Cash App, Tesla, and many other companies are now coming to realize this advantage. We see the supply on exchanges drastically decrease over time while the price of Bitcoin continues to grow. Not all institutions are required to disclose their holdings, but it is safe to assume that many large investors are currently stocking up. And you can do the same. At the moment, it is still easy to access an exchange and purchase Bitcoin. In the future, however, it is nearly inevitable that we will see a massive supply “shock”, making Bitcoin unavailable.
3rd Use Case - Start accepting Bitcoin
For smaller-scale merchants, accepting Bitcoin for goods and services may be a smart idea. Not only is it as easy as implementing a payment widget on a website (BitPay or Coinbase Commerce, for example), but it also opens up the store to a completely new target audience.
Many merchants that chose to do so in the past are currently listed in several digital lists of “companies that accept Bitcoin” and they don’t even need to store Bitcoin themselves. The widgets simply take a crypto payment, exchange it to your fiat currency of choice, and deposit it in your bank account.
That said, you can always choose to place a QR code within your store, depicting your cryptocurrency wallet, in order to accept direct Bitcoin payments.
4th Use Case - Build your own cryptocurrency
Finally, and this is more oriented towards blockchain-related startups, you can also create a brand new cryptocurrency to support a digital platform or virtual product. Nowadays, creating a new cryptocurrency is relatively easy when doing so on the Ethereum blockchain, and many entrepreneurs have found creative ways to solve industry problems and monetize their ideas.
Closing, remember that it is important to adapt. Businesses will eventually operate on the basis of digital currency, and you have the chance to become a pioneer on a local level. We therefore recommend doing more research and staying up to date with the latest developments.
5th Use Case - Protect your business from inflation
Aside from the obvious benefits of Bitcoin acting as an appreciating store of value, it also acts as a protection layer against global economic instability. With inflation rising rapidly over the past year, many businesses now see Bitcoin as a reliable yet volatile option to maintain the value of their money over time. While the general public has not yet been exposed to the after effects of these issues, many are afraid that the US dollar is doomed to suffer the same fate as the Venezuelan Bolivar, which is where cryptocurrencies come in by providing an exit from the government-based monetary system.
Note that Bitcoin’s use for business is not limited by transactional benefits, but also offers a plethora of additional opportunities. These are linked with the creation of projects in a brand new, decentralized industry, which is slowly growing into the much-awaited Metaverse, a concept that you should certainly explore in further detail.
As always, however, keep in mind that this content is aimed to educate readers, and does not constitute financial advice.
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About the Author
Santa is a Latvia-based cryptocurrency journalist with a passion for covering the latest happenings in the cryptocurrency and tech world. In addition to being the analytics specialist of Paybis, Santa is also into consulting, reading, and investigative journalism.