Isn’t it hard to imagine the world without all things digital? Over the last 20 years, the pervasiveness and ubiquity of digital technologies have grown exponentially, and it remains to do so even as we write.
Undoubtedly, digital technologies such as the Internet, PC, TV, smartphones, and various other handy gadgets are becoming extensively intertwined in our daily lives.
Whether its education, entertainment, social interactions, healthcare, or financial management, every aspect of global societies is becoming digitally-dependent.
Since the developments in digital technologies are ever-growing and take place at the speed of light, we are now and then exposed to new and improved digital innovations that transform our lives profoundly.
Apart from filling our lives with unlimited entertainment such as Spectrum 4K and giving us numerous online platforms to connect to the world, digitalization has also facilitated the exchange of value.
This means that strong digital links between people allow them to buy and sell goods and services to each other and make commercial transactions.
Digital platforms have boomed connectivity and revolutionized businesses and trade to a great extent.
From enabling us to receive and transfer money virtually via online banking to the evolution of cryptocurrency that is the talk-of-town these days, assets can now be built and traded entirely digitally.
But wait for another, what exactly is a “cryptocurrency”? Is it related to some underworld banking system? Is it something shady? How can I use it? Does it even exist?!
If you are an entrepreneur or a small-scale business owner who’s on a quest to solve the mystery of cryptocurrencies, then stick with us till the end to get all the answers!
1. What is Cryptocurrency? – A Definition for Dummies
In simple words, a cryptocurrency is a virtual currency that is a hybrid of money and digital assets. That determines that it can be used to pay for goods and services, and you can also invest in it to generate long-term profits. Some real-life examples of cryptocurrency include Bitcoin and Ethereum.
Before we go every further, let us give you a quick insight into cryptocurrencies.
2. How Cryptocurrency Works?
Cryptocurrencies are an utterly internet-driven medium of exchange that is powered by blockchain technology and cryptographic protocols that ensure that all transactions are decentralized, secure, transparent, and unaltered.
The distinguishing feature of cryptocurrencies is that they are not controlled or regulated by any central authority such as the state bank or government.
Two parties can directly send and receive cryptocurrency by using public and private keys.
The transactions are processed swiftly by paying just a minimal fee that is nothing as compared to the hefty processing charges that are imposed by the traditional financial systems.
Now that we are pretty clear on the fact that cryptocurrencies do exist and what they are, without further ado, let’s shed some light on how small businesses can benefit from cryptocurrency in today’s high-tech age.
3. The Benefits of Cryptocurrency for your Small-scale Business
A handful of businesses have started accepting online payments via Apple Pay or Paypal.
However, with over 5000 cryptocurrencies existing across 20,000+ markets, the option to use them as a payment option has emerged over the horizon.
The reason behind this could be that in 2019 there were over 44 million cryptocurrency users, and the many are expected to increase further.
Here are some ways small businesses can leverage from cryptocurrencies.
4. Attract New Customers and Increase Brand Visibility
Cash, credit cards, and bank transfers –the most commonly used payment options by businesses around the world.
Due to the general availability and usage of high-speed internets such as that provided by Wave internet service, smartphones, and e-shopping platforms, the number of digital shoppers in the US has skyrocketed to 227.5 million in 2020.
Since small businesses face various market-penetration challenges, adding cryptocurrency such as the Bitcoin as one of the payment methods can help them widen their customer base.
Imagine the number of customers and sales you will attract by targeting the 2.3 million users who make payments via Bitcoin! Massive, isn’t it?
Being a small business, incurring various operating expenses such as rent, bills, inventory, licenses and taxes, marketing budgets, and much more, can be stressful.
Cryptocurrency transactions are borderless and timely, which means that payments can be sent and received in real-time irrespective of their geo-location.
The promptness of cryptocurrency transactions can give peace of mind to small enterprises as they won’t have to dread late payments and to pile up unpaid invoices.
Digital currency transactions involve no paperwork and have minimal to none processing fees. This can benefit small businesses by saving their time, energy, and money as compared to using traditional payment methods.
6. Safer and Sounder Transactions
As we all know that the cyber-world isn’t free of thieves! Credit card payments are backed with an elaborate transaction history that can be leveraged by hackers for malicious gains that can put you and customers at a loss.
When it comes to secure payments, cryptocurrency is a game-changer for small businesses that are in a weak position and cannot afford chargebacks and frauds.
Cryptocurrency transactions are backed by a foolproof blockchain technology that ensures that all money transfers are final and irreversible, i.e., they cannot bounce-back or get canceled.
Moreover, since transactions cannot be annulled or overridden, the payments made by the customers using cryptocurrencies are straightaway added to the blockchain digital ledger via a process called “mining.”
Another best part about cryptocurrencies is that they don’t offer debt or loans. This means that a person cannot spend more than they have, which in turn helps in keeping chargebacks and unwelcome financial constraints at bay.
This top-notch reliability and security of payments that come with the use of cryptocurrency give small businesses a more clear-cut and more straightforward mode of payment as compared to the traditional banking system.
7. Boost Sales with Worldwide Outreach
Cryptocurrencies have a massive potential to become a global currency in the coming future as the system is growing more and more digitalized with passing the time.
A handful of countries, including the UK, Singapore, Japan, Germany, and many more, have legalized cryptocurrencies.
The decentralized nature of this epic digital mode of transactions can allow your business to target a more significant customer base globally without facing any cashflow issues or geographical obstacles.
Introducing cryptocurrency as a payment option will let you sell your products to international buyers smoothly and help you generate higher profits by accessing new global markets.
Cryptocurrency ensures smooth cashflow by removing traditional banking obstacles such as incurring high international transaction costs, worrying about exchange rates, and long global scale-waiting time as payments are instant.
9. Is Cryptocurrency a Good Option for Small Businesses?
While cryptocurrency can be a huge cost saver for small enterprises with smaller margins, they should be prepared to pivot around timely changes that might come around soon.
Since more countries are standardizing crypto-transactions due to unforeseen market events such as the COVID-19 pandemic, this might impact the regulatory landscape of the cryptocurrencies in the future as laws and taxes might get imposed on them.
Moreover, as there is no such thing as water-tight security in the cyber-world as hackers keep getting more robust, the fact that cryptocurrencies and digital wallets are not insured might put yours at risk of loss.
Additionally, if you are a small-scale entrepreneur or business willing to accept crypto-payments, then getting yourself familiar with the digital wallet software might take some time or extra effort if you’re not tech-savvy.
10. The Final Word
Despite having a few barriers that can be easily mitigated with keeping an open eye and mind, cryptocurrency can be quite potent for your small business.
If you learn to overcome the few crypto-obstacles were coming your way, and once you obtain that hang of it, blank can stop you from taking your small-enterprise to the next level if you manage to hit the nail in the head!