It seems like nearly everyone has heard of cryptocurrency by now. Ask them what exactly cryptocurrency is, however, and you might get little more than a blank stare. Unfortunately, cryptocurrency education is not as widespread as it could be, and that’s especially true for businesses.
For many businesses, the risks associated with cryptocurrency have made it not worth thinking about, but it doesn’t make sense to dismiss it out of hand. By seeking out education on cryptocurrency and blockchain technology, business owners can get a better sense of how cryptocurrency or blockchain technology can help their organization grow. You can get a better sense of what the competition is doing with blockchain technology, and begin educating your staff about cryptocurrency as well.
What are the Immediate Benefits?
Lower Transaction Fees
One of the immediate benefits for businesses is that cryptocurrency transactions come at a lower cost. Bitcoin, in particular, may even be sent with no transaction fees at all since the fees are calculated based on the amount of data sent.
In comparison, credit card transaction fees can be much higher. Not only do credit card transactions involve fixed fees that a business needs to pay, but some will charge a fee per transaction on top. By accepting cryptocurrency, businesses both large and small can immediately cut down on this cost.
Protection From Fraud
Businesses can sometimes be hit with fraudulent chargebacks on credit card transactions. Solving these fraudulent transactions can be time-consuming, a luxury that most businesses don’t have. You may have to involve multiple people within your organization, the credit card company, the bank, and even the authorities.
With cryptocurrency, fraud is much harder to pull off. With blockchain technology, each transaction that a particular cryptocurrency was used for is recorded, like it would be in a ledger. If someone tries to wrongfully dispute a transaction, blockchain allows for a business to easily verify the transaction, cutting down on losses due to fraud.
Another immediate benefit for businesses that accept cryptocurrency is the faster transaction times. Since transactions occur directly between two parties, with no third party involved, transactions go through almost instantly. This is especially beneficial for businesses that deal with transactions where large amounts of money are at stake.
Tesla is an example of a company that takes full advantage of this. Tesla now accepts Bitcoin in exchange for their electric cars, and when you consider the cost of a Tesla, the implications are enormous. Tesla’s cars usually cost somewhere between $37,990 and $124,000 before taxes. By accepting Bitcoin, Tesla now gets that money almost immediately, without having to worry about a third party having to approve the transaction first.
Reaching More Customers
Accepting cryptocurrency immediately gives a business access to customers on a global scale. By accepting cryptocurrency, businesses can avoid having to exchange their currency, and they can avoid currency exchange fees. Furthermore, a business that accepts cryptocurrency gains access to a universal currency. This makes it easier for customers to decide on whether they want to pay for your product or service.
Several companies are using cryptocurrency’s global reach to gain more customers. Yum Brands, which operates KFC, Taco Bell, and Pizza Hut, has adopted cryptocurrency, which allows them to bypass currency exchanges. It also means they cater to customers in countries where cryptocurrency is more widely accepted. In the same vein, PayPal also accepts cryptocurrency, which strengthens its grip on the international market.
Initial Coin Offerings
If you’re looking for an alternative to crowdfunding or raising venture capital for your new business, ICOs may be the answer. ICOs, or Initial Coin Offerings, allow new businesses to raise capital by creating their own digital currency that can be used for their products or service. For businesses that can’t or don’t want to raise capital through traditional means, ICOs are a viable option.
Benefits from Blockchain Technology
Even if you don’t want to accept cryptocurrency, learning about blockchain technology, which is linked closely to cryptocurrency, can open up a whole world of opportunities for your business. Blockchain technology isn’t just used to record information on cryptocurrency transactions, after all. The technology can be used to record all types of transactions in near-real-time, and many businesses and industries are taking advantage of this.
Banks are now looking towards blockchain technology as a way to enhance the services they can provide. While not all banks are quite ready to take on cryptocurrency itself, adopting blockchain technology has its own set of advantages.
Blockchain technology can allow a bank to facilitate international payment transactions. Implementing blockchain technology on a global scale allows banks to reach more international customers. Blockchain technology can also allow banking institutions to facilitate transactions more securely.
Currently, around 21% of banks are using blockchain technology in one way or another. These banks include JPMorgan, Citi, Wells Fargo, Signature Bank, and more. Some of these institutions use blockchain technology to secure personal information, prevent money laundering, and allow for the faster transfer of funds between accounts.
Supply Chain Management
Blockchain technology can reduce the number of intermediaries within a supply chain, increasing both transparency and efficiency. Goods are more easily tracked, and it cuts down on the amount of physical documentation needed since everything can be stored electronically. Furthermore, since information is stored together in one place, it becomes easier for everyone on the supply chain to collaborate.
An example of a business that uses blockchain technology is De Beers. De Beers track the origin of all their diamonds using blockchain technology, meaning they know exactly which mine their diamonds come from and who handled it. This allows De Beers to avoid selling “blood diamonds” to consumers, and De Beers can ensure that their entire supply chain is an ethical one.
The healthcare industry has also been utilizing blockchain technology, even though they don’t have much use for cryptocurrency itself. In the healthcare industry, the blockchain can be used to store data securely, allowing them to digitally manage patient information. This can even be done while respecting HIPAA regulations.
A recent, if controversial example of the healthcare industry making use of blockchain technology is through vaccine passports. The idea is that patients can securely download their health records onto their phones in order to prove their vaccinated status. While the ethics of this is still being debated, there’s no doubt that the technology itself has huge implications that can change the face of the healthcare industry.
How Do I Begin Educating Myself?
Clearly, there’s a lot about cryptocurrency that a business needs to consider before it decides on whether to accept cryptocurrency or the technology associated with it. Either way, it’s still important to learn about cryptocurrency, and what it can mean for your business. So here are some questions a business should ask itself about cryptocurrency.
How Do I Make Use of the Technology?
At the moment, cryptocurrency is not widespread enough that every business needs to accept it. That gives businesses some leeway. However, this does mean that you need to know your target market well. Are they looking to pay with cryptocurrency? Do they expect you to accept cryptocurrency? How will this affect your company’s image? Answering these questions correctly will allow you to tailor cryptocurrency to your business practices.
The same questions can apply to the adoption of blockchain technology as well. In that regard, a business will need to think about how blockchain technology can be leveraged to its advantage. For example, blockchain technology is an excellent way to facilitate collaboration, but that may not be a strategic priority for you. If that’s the case, adopting blockchain technology may not make sense for your business.
Should I Just Wait and See?
Some businesses may decide to wait and see, but competitors who take the initiative to educate themselves on blockchain technology may end up adopting it first and utilizing it effectively. This means that your business may run into the danger of falling behind. Even if you decide to immediately follow in the footsteps of your competitors and adopt blockchain technology, implementation takes time. It makes more sense for businesses to keep themselves educated on the pros and cons of cryptocurrency and blockchain technology, rather than relying on a wait-and-see approach.
Shell is an example of a company that adopted blockchain technology early. Shell’s blockchain team began plans as early as 2017, and have since come out miles ahead of the competition in terms of enhancing their business practices with blockchain technology. Blockchain technology is now adopted into their supply chain, their global non-profit organization, solutions for buying and selling locally produced energy, and more. Through continued education, Shell was able to adopt blockchain technology early and become leaders in their industry.
What if I Want to Begin Accepting Cryptocurrency?
If you decide to begin accepting cryptocurrency at your place of business, you need to get your staff on board. The best way to do so is through education. Education, clear communication, and a plan of action will make it easier for your staff to buy in to the idea of cryptocurrency. So, what does your staff need to know?
How to Mitigate Risk
Your frontline workers are likely going to be the ones handling cryptocurrency transactions the most, so they need to understand how to mitigate risks like payment spoofing, hacking, and crypto-jacking. This can be as simple as reminding staff not to open suspicious emails. They should also never give away passwords under any circumstances. Educating your staff on basic cybersecurity tactics will allow them to feel more comfortable around cryptocurrency technology.
Your frontline workers will also need to learn how to accept cryptocurrency payments. The methods can vary depending on the payment provider your business decides to work with. The crypto wallet used will also affect the transaction. It’s important to decide on these factors early on so that you can effectively prepare your staff.
As a business owner, you’ll have to become a leader of cryptocurrency education and be ready to update and pass on your cryptocurrency knowledge to your staff. This will make your staff feel secure. You’ll be able to gain their support, and you’ll be able to utilize cryptocurrency in a way that best supports your business.
How to Keep Up with Regulations
Regulations surrounding cryptocurrency are still not set in stone, so changes are always happening. This means businesses need to have a degree of flexibility. This doesn’t mean wildly changing your cryptocurrency policy, of course. What it does mean is that it’s important to update your knowledge about cryptocurrency regulations and make measured changes to your policy as needed. When you back policy changes with knowledge, your staff will be more likely to understand and support these changes.
Luckily, it seems that clearer regulations around cryptocurrency are just around the corner. In America, the Office of the Comptroller of the Currency began taking steps back in 2020 to clarify legal grey areas regarding cryptocurrency banking activities. The Security and Exchange Commission began to expand legal parameters around initial coin offerings.
As cryptocurrency regulations become more stable, businesses will be able to set more permanent policies. Until then, cryptocurrency education is an absolute necessity.
Cryptocurrency Education is Useful, Whether You Use Cryptocurrency or Not
You may decide that your business has no use for cryptocurrency or blockchain technology. Still, it’s important to keep yourself informed. There are immediate benefits to adopting cryptocurrency that should be considered. Take blockchain technology benefits into account too. At the very least, it will allow you to keep an eye on the competition.
If you do decide to adopt cryptocurrency, education is the best tool to gain support from your staff. Educated staff will be more likely to buy in and support your cryptocurrency policy. They’ll be more likely to understand and accept policy changes.
One of the best ways to learn more about cryptocurrency is through websites like ours at unBanked. Read some of our other articles to round out your cryptocurrency education.