Cryptocurrency has been big news for a few years now, although it is still something a lot of people outside of the tech and finance industries aren’t too well-versed in. Most people have heard of major cryptocurrencies like Bitcoin and Ethereum, and the media often follow Bitcoin press releases because the growth of crypto is very much in the public interest. However, what you may be less familiar with are the very real and practical ways small businesses can take advantage of Bitcoin and other blockchain based technologies to reduce costs, improve efficiency, and increase convenience. Here, we are going to explore four of these:
Almost Instant Financial Transactions
Bank to bank transfers are complex things, and can take days to complete. When you are dealing with payments going to and coming from other countries, things can get even more complicated, and delays even longer. However, with a cryptocurrency, it is possible for transactions to be made almost instantly, depending on how busy the network handling them is. Blockchain has massive computational power, and removes the middle man of a financial institution and their technologies in between the payer and recipient. This means that at the very most, you can receive funds in a cryptocurrency within a few hours, and it is usually much faster. This can remove cashflow problems and significantly boost efficiency.
Smart Strong Contracts
When a business is using a blockchain system and cryptocurrency, it is possible to implement what are called smart strong contracts between themselves and other parties like suppliers. These are simple contracts that can be accessed at any time, are digitally signed, and cannot be modified after they have been agreed. They generally take the form of logical statements (‘if’ statements to those with a programming background), and are enacted when the conditions are met. For instance, when an agreed product is delivered on an agreed date, payment is automatically enacted. This not only increases speed and reduces the steps involved in paying for goods and services, but also cuts out the need for a lot of the legal steps usually involved in a contract. There is no need for a business to pay for lawyers or notaries, or to take the time going through all of those stages, to implement a contract that serves the purposes both parties want it to.
Paying for Overheads
Overheads like utility bills for your business location can often now be paid using a crypto currency wallet. This is good in a number of ways. On the one hand it makes getting these basic things paid for completely hassle free, but on the other it incentivizes accepting payment via cryptocurrency. The digital assets that a small business has in the form of crypto payments can be used to pay for the things they actually need on an operational basis, making them more useful and tangible.
Easier International Transactions
We have already touched upon the fact that blockchain makes international money transactions much faster, but it offers other benefits too when you want to deal with customers, suppliers and other parties in foreign countries. Cryptocurrencies are not tied to any government, and so while their value does fluctuate like any other currency, you don’t have to pay exchange rates when you send money to users in a country that uses a different currency than your own. Of course, there are different regulations on cryptocurrencies in different countries, and so it is important to be aware of where things stand in the countries you deal with most if you want to make greater use of crypto for international business.
These are just some of the ways crypto can make life easier for small business owners, and with greater adoption of blockchain, it is a good thing to start looking into using if you are a small business owner who hasn’t yet investigated it.