Cryptocurrency Opens the World For Small Businesses | The whole idea of cryptocurrency simultaneously inspires reluctance and curiosity. This curiosity comes from an apparently limitless ability of companies and individuals who use cryptocurrencies to conduct business around the world with great ease. Indeed, as discussed below, a business’s ability to engage in international commerce from anywhere to anywhere around the globe is only the first of several significant benefits. The reluctance often expressed is a result of unfamiliarity with the whole notion of a currency that is not based on the American dollar.
Volatility is also an issue with would-be users, as news reports occasionally feature stories of cryptocurrencies rising and falling rapidly in their valuations. The purpose of this article is to alleviate some of the distrust of cryptocurrencies by removing some of the mystery about what they are and how they can be a huge boon, especially for small businesses.
The Key to Successfully Using Cryptocurrency
Whether the changing valuation or the general acceptance of cryptocurrency is your concern, the solution likely resides, first of all, in making certain you are able to monitor the flow of your business in your preferred currency. This is actually important regardless of whether you are basing your finances—and even individual transactions—on traditional forms of payment or on cryptocurrencies. Monitoring your corporate interactions is actually less time-consuming and troublesome than you might imagine. Software platforms have been developed in the last decade making it possible for you to maintain real-time oversight of your transactions regardless of the size of your operation. For peace of mind, you are probably well served to engage in prometheus monitoring for all your systems.
The Business Advantages
While using cryptocurrency does have certain potential drawbacks—for instance, there are places where using cryptocurrency is proscribed—there are undeniably a number of distinct benefits available to the users of cryptocurrencies. As you consider these, you may recognize that a decentralized form of currency can be a boon for small businesses, in particular for those doing business internationally.
- Cryptocurrencies can often be transferred simply via a cellphone or computer. Yes, you can use your smartphone to move dollars as well, but only because your request is routed through a financial institution.
- Minimal fees are charged for the transfer of cryptocurrency. Both for national and international business transactions, the cost of using cryptocurrency is minimal.
- Privacy and confidentiality are more easily maintained with cryptocurrency dealings. In this sense, these currencies operate like cash transactions.
Current Popular Cryptocurrency Forms
Alternative forms of currency have been around throughout the course of civilization. Cryptocurrency, however, could not have existed prior to the advent of the internet. While there are certain decentralized currencies you may recognize immediately, there have been more than 5000 cryptocurrencies founded in recent years. Obviously, the most recognized is Bitcoin, the original cryptocurrency that still has more than twice the valuation of its nearest competitor with a market cap of $641 billion. Next is Ethereum, which is the darling of developers because its platform is malleable enough to be written into the automatic functions of business programs. It has a market cap of $307 billion. Sixth on the list, but rising steadily because it has been so heavily promoted by celebrities like Elon Musk, is Dogecoin with a market cap of $44 billion.
Legal Acceptance of Cryptocurrencies
Because cryptocurrencies are not issued by a particular country but rather are “peer to peer,” national governments are leery of their use because they cannot be fully regulated. For this reason, some nations like Russia and China, have outlawed their use for all transactions that begin or terminate within their national borders. More developed societies, like the United States, Canada and the European Union, have found ways to allow cryptocurrencies to operate—most often by saying that they are not really forms of currency, but rather are MSBs (money services businesses). This means you are free to conduct business in cryptocurrencies, but remember your profits will also be taxed.