You’ve probably heard the word cryptocurrency. Regardless of where you live or what you do, so long as you’ve got an internet connection, chances are you’ve come across this word. Crypto is all the rage right now, although it’s not quite a new trend nor can you call it a fad.
Cryptocurrency has existed for a while now. The whole movement began in 2008 with the online publication of “Bitcoin: A Peer to Peer Electronic Cash System,” written by a certain Satoshi Nakamoto. These days, crypto enthusiasts associate the pseudonym to Australian entrepreneur Craig White.
As the father of the revolutionary financial system, Satoshi, or Craig for that matter, introduced Bitcoin, the trailblazing cryptocurrency. Since its inception, other types of cryptocurrencies have cropped up. And the whole movement’s gaining more and more adherents for understandable reasons. Even small businesses are in on it. As to why that is, here are the reasons.
You built a business from scratch. You worked hard to gain ROI in the shortest time possible from the moment you parted with capital. Wouldn’t it be frustrating for the profit you’ve gained to be subjected to the whims of inflation?
Circumvent that all-too-real possibility by funneling business profits into cryptocurrency. Even if the government prints more money to make up for a lagging economy, your assets are spared from decreasing in value. You get to maximize the hard-earned rewards from your entrepreneurial efforts despite foreign exchange fluctuations.
If you participate in e-commerce, it’s in your best interest to offer customers different payment methods. That way, you don’t lose transactions from those who favor one payment system over another. On top of wire transfers, allow digital wallets. Take it a step further with cryptocurrency.
Follow Tesla’s lead. The company recently announced it will be accepting payments using Bitcoin. Such a decision coming from a well-respected electric-car maker is a testament to the viability of cryptocurrency as a payment method. Whether or not you’re a fan of Elon Musk, there’s no denying that he makes clever business decisions.
Once you open the floodgate of crypto payments, expect new customers to come your way. You will have a captive audience among crypto enthusiasts. They might even give your small business free marketing through word of mouth.
Cheaper cloud storage
Cloud storage services rake in $20 billion every year from business and personal subscribers. As a small business owner, you likely have a share in that gargantuan pie. After all, you require safe storage of data—one that won’t compromise sensitive information belonging to your business and your customers. So you pay up thinking there’s no getting around it.
What if we tell you that if you get into cryptocurrency, you’re afforded a cheaper and safer alternative for storing data? That is thanks to blockchain technology, which is essentially the backbone of cryptocurrency. With blockchain storage, you reduce operational costs as you no longer have to contract third-party cloud storage services.
Reduced transaction fees
Banks charge customers for using their credit cards. They charge businesses, too, for every transaction. Fees can get as high as 4% for each transaction. Banks win. You, on the other hand, narrow your profit margin.
With cryptocurrency payments, the middleman—meaning banks—is removed from the equation. That allows for transaction fees to be considerably reduced, which is a welcome change for both customers and business owners.
Tapping “unbanked” consumers
There are 1.7 billion people globally without access to banking products, such as a savings account. They are called the “unbanked” population. In due time, they will discover alternatives to traditional financial options if they haven’t already. That’s where cryptocurrency comes in. And your small business better be prepared for when this market segment gains considerable consumer power.
Access to capital
At some point, you will think it’s time to expand your small business. By then, you’ll require additional capital. Here, blockchain technology becomes even more beneficial. Consider Initial Token Offerings (ITOs), which are similar to corporate shares.
Here’s how it works. You offer interested investors ITOs in exchange for disposable funds. These transactions happen without bank intermediaries. That means you have more freedom on how to manage these shares. So long as you’re on the same page with your ITO holders, you’re good.
As to whether small businesses can benefit from cryptocurrency, the short and precise answer is yes. And the reasons listed above suffice to support that claim.
While the jury’s still out on the prognosis that cryptocurrency will be the future of financial transactions, it’s safe to place your bet on it. After all, once something revolutionary gains steam, there’s no stopping it. And that’s exactly what cryptocurrency is— revolutionary.
So, as an operator of a small business, you might as well ride the proverbial bandwagon. Or risk getting left behind.