Cryptocurrency has come a long way. From its humble beginnings as a novel idea to revolutionize the financial sector, the concept has come to fruition. It’s even safe to say that it has penetrated the public imagination. As such, the terms crypto and blockchain technology are now as familiar to most people as your favorite Hollywood celebrities or the most talked-about Netflix shows.
With the level of popularity that cryptocurrency and blockchain currently enjoy, credit should go to their earliest proponents. Those include the author Wei Dai whose B-Money is arguably cryptocurrency’s earliest conception. And then there’s Satoshi Nakamoto’s Bitcoin: A Peer-to-Peer Electronic Cash System, which became the blueprint of cryptocurrency as we know it today.
In the not-so-distant past, those behind cryptocurrency were purely hobbyists with enough technological know-how to understand the system. However, these days, this alternative financial method welcomes everyone. And everyone in this context includes business entities.
Why Go Crypto?
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Payments via cryptocurrency are efficient and reliable. Transferring digital funds takes a shorter time compared to fiat currency exchanged through banks. You also do away with transfer fees and credit card charges. While those may seem inconsequential for single transactions, they quickly add up if you consider repeat transfers.
- Better cash flow management
Cash flow bottlenecks are challenging to manage and can easily cause a business to fail. By embedding cryptocurrency and blockchain technology into your business paradigm, you become better at managing customer demand alongside rising costs. Plus, chargebacks and refunds are fewer, given how cryptocurrency transactions are virtually irreversible.
- Attract more customers
Customers prefer diverse payment methods from a single merchant. It allows them to use whatever resources they are most able and willing to dispense at a given time. Including cryptocurrency in your current payment methods will introduce you to new customers who are already ardent followers of blockchain technology.
How to Utilize Cryptocurrency and Blockchain Technology in Your Business
Cryptocurrency and its underlying foundation—blockchain—promise practical business applications, such as the following.
- Employee compensation
Argentinian citizens are among the most avid cryptocurrency enthusiasts. In fact, the country has the highest number of employees accepting cryptocurrency as a mode of salary. The reason behind this is inflation mitigation and forex flux management.
It also helps that a local law allows organizations to pay their employees as much as 20% of their compensation in cryptocurrency. For businesses around the world, this should be an optimistic scenario. It shows an increasing percentage of workers willing to accept cryptocurrency as payment for their services.
- Customer payment
This aspect is perhaps cryptocurrency and blockchain technology’s most obvious business application.
With e-commerce at its peak and showing no signs of slowing down, it’s best to appeal to customers’ whims. And one of those pervasive demands is the ease of payment for transactions. So adding cryptocurrency to your accepted payment methods shows your willingness to reach out to diverse types of online shoppers.
- Storage of customer information
We now live in an age where data is a commodity. If you haven’t taken to collecting customer data, it’s high time you did.
However, make sure you do it right lest you get caught up in a situation you can’t handle, such as a data breach. A single event of that nature can easily destroy the name you built from scratch, on top of costing significant money in paying settlements. With blockchain technology, you can collect and store data safely.
- Loyalty program
A business will not be sustainable if it exclusively relies on new customers. A more foolproof approach is taking care of existing ones enough for them to be considered loyal patrons who will go out of their way to ensure repeat transactions and, more importantly, vouch for your business.
This is where blockchain technology comes in. It can synergize customer retention efforts via a centralized interface offering immediate rewards. The system also becomes simple for all stakeholders, including your business and customers.
- Portfolio diversification
Businesses typically get revenues from customer payments. Net profits account for the asset you have remaining sans operating costs. With the cost of doing business rising consistently, net profit is at risk of getting slimmer and slimmer.
But what if you can diversify revenue streams from a single business? You can get privy to that opportunity if you receive crypto payments and hold on to them as investments. Then, wait for their value to peak before trading and see your business profits double.
- Smart contracts
Smart contracts, compared to traditional contracts, are more business-friendly. For starters, these agreements can automatically greenlight the release of resources once a specific contract agreement is met.
Again, this is made possible by blockchain technology. Gone are the days when you have to pay in advance and in full for orders you have yet to receive. Nowadays, you have the option to enable a staggered mode of payment that responds to a contract milestone.
Tips for Businesses
Before jumping into the crypto and blockchain tech wagon, ensure you have covered all the bases. Here are a few tips.
- Know what you need
Partaking in a cryptocurrency transaction, whether as a sender or receiver, requires a cryptocurrency wallet. Think of it as a virtual piggybank, which, ideally, accommodates different types of cryptocurrencies.
Alongside your wallet is a unique crypto address comprising numbers and letters. This address may be rendered into a QR code for easy sharing. Lastly, you need a private key stored in a safety device such as a USB to access your crypto wallet.
- Explore existing technologies
For those looking to accept crypto payments, consider point-of-sale (POS) systems that are already compatible with the technology, such as Stripe, Square, and PayPal. Alternatively, if you want to stick with a trusted POS system that does not support crypto, you can integrate a processor into your business, such as Coinbase, CoinGate, and BitPay.
- Mind the risks
Cryptocurrency is not a perfect financial system. Therefore, it pays to know the risks associated with the system, such as the lack of robust legal protections for transactions and the potential disclosure of confidential information due to blockchain technology’s public nature.
Also Read, Cryptocurrency Revolutionizing Business
Businesses have to continually level up their game if they are to compete adequately in their field. With the advent of e-commerce, for instance, the competition has become stiffer, regardless of the customer niche you’ve chosen.
With that in mind, it pays to always look for novel strategies that will elevate how you do business. Doing so will make your target market see that you’re willing to go out of your way to serve them better.
One such strategy is introducing cryptocurrency into your business model. You can do so purely as an internal customer-facing effort—think employees’ compensation—or an exclusively external customer-facing service inclusion like payment management. Or better yet, do both. After all, happy customers, both internal and external, make for a happy business.
Do not get limited by what’s readily available to you, either. Instead, learn to explore other ways to incorporate cryptocurrency into your business and become a blockchain technology trailblazer in your own right.