Looking closely at the history of the cryptocurrency industry, as short as it may be, and analyzing its evolution over the years, it’s safe to say that digital currencies have come a long way since they were first introduced to the general population.
It has obviously moves far away from the outskirts of the financial sector and inched closer to mainstream adoption with each passing day.
Crypto has grown increasingly more popular with individual and institutional investors, despite the market’s contentious volatility and instability that has made many pundits draw a parallel between crypto investing and gambling.
The constant swings in Ethereum price or the shifting Bitcoin value haven’t dissuaded people from investing in digital assets. Not even the crypto winter was able to burst the crypto bubble, as some forecasted.
If digital currencies have been able to push through all these challenges and still attract such a huge amount of interest, should businesses align with the trend and integrate them within their systems? We will consider some factors in this article to help you make an informed decision about this.
Cryptocurrency is Still Standing
It is already known that a growing number of companies and organizations from all over the world have readjusted their financial infrastructures to accommodate digital currencies.
But just as many businesses choose to steer clear of crypto owing to their unpredictability and volatile nature. So, should the rest follow in the footsteps of early adopters or should they take a more cautious approach and wait some more before taking the leap?
While it’s up to each business to analyze their individual needs, weigh the pros and the cons, and decide what is the best course of action for themselves, there are general advantages and disadvantages that can help guide their decision. So, here are the main aspects to consider.
The Pros of Cryptocurrency
Decentralization
Starting with the advantages, the most notable perk of using cryptocurrency in business has to do with its decentralized nature. As you may know, digital currencies are not issued or controlled by a central entity like a bank or a government body. They reside on a digital decentralized blockchain network that validates and records transactions, which allows them to cut out middlemen.
Therefore, transactions can be conducted directly between stakeholders, which greatly reduces wait times, fees, and all the paperwork associated with using a third party to oversee the payment process.
Reduced transaction cost
Most payment processors are known for charging huge fees for their services, while crypto has gained praise for its low transactional fees. Switching to crypto can potentially give companies more control over their financial infrastructure and ensure more streamlined management of their assets.
Faster and safer transactions
When it comes to international business transactions using fiat, the wheels of the traditional financial system tend to turn slowly, making the process quite cumbersome. Things look completely different for international crypto transfers.
Not only are blockchain-based transactions processed a lot faster, but they’re also much safer given they’re secured through cryptography, and far less expensive compared to conventional money transfers.
This gives companies that engage in frequent international trades a good reason to resort to crypto payments in the future as an alternative to fiat.
An additional payment option
Let’s not forget that customers appreciate when companies provide them with a wider range of payment options, so they can choose the one that best suits their needs. And since more and more people have started using digital currencies as a method of payment lately, it makes sense for businesses to include them in their payment system.
That’s one way to attract more customers to your business and gain a competitive advantage in a crowded market.
It is the future of finance
Many experts believe that crypto represents the future of finance. Digital currencies may not be a mainstream form of finance just yet, but if their past development is any indicator of what’s about to come, they’re bound to reach this status soon enough.
And when that happens, the businesses that were smart enough to include them in their structures early on will be better positioned for growth.
The Cons of Cryptocurrency
It’s often said that one needs to look at the half-full part of the glass but in the business world, ignoring the half-empty part can spell disaster. So, despite all the amazing benefits that crypto can provide for business, one needs to take note of the disadvantages as well.
Crypto is still relatively new
We first need to address the elephant in the room and remind everyone that digital currencies are still a novel and insufficiently developed technology. And as with all things new and exciting, mistakes are bound to happen and more time needs to pass for the industry to reach maturity.
At the moment, crypto is brimming with potential and promise, but potential alone is not a strong enough foundation for an asset with such far-reaching implications.
High volatility
For the time being, no one was able to find a solution to counter the market’s extreme volatility or come up with a unified regulatory framework.
While investors might thrive on this volatility and use the sharp price swings to their advantage, most companies are not comfortable with the risks it involves.
Hacks and cyberattacks
As a business owner, you also need to be aware that crypto is not immune to hacks and cyberattacks, as many have professed. Security is your responsibility, so you need to learn about the risks you expose yourself to and the best security practices to employ.
Adoption is still relatively low
Apart from that, you need to keep in mind that not everyone has fallen beneath the crypto spell. Before you decide to include crypto payments into your business, it’s important to make sure your target audience is keen on the idea and would benefit from this service.
Otherwise, you’ll be wasting a lot of effort and money on something that doesn’t add any value to your business.
Bottom Line
It’s pretty obvious that the use of crypto in business comes with many perks and just as many drawbacks. Whether implementing crypto solutions in a company is a good idea or not should be decided on a case by cases basis and after a thorough analysis of both pros and cons.
