Small Business Benefits of Blockchain and Cryptocurrency
How much have you heard about Bitcoin?
While the mainstream media has not mentioned it much over the past few months, Bitcoin and other cryptocurrencies were all over the news in December 2017 when its value peaked at $20,000 per coin, and then tumbled over 50% in a very short period of time, and since then seems to be on its way to an overall 90% correction.
This volatile asset has been around for over 10 years and has been called a “scam” and worthless by many traditional financial experts. But those same experts have begun to change their tune and have filed patents for blockchain technology, launching their own cryptocurrency wallets, investment funds, and other financial tools, to take advantage of borderless, nearly instantaneous currencies with transactions that cost much less than credit cards.
Benefit 1: Low-Cost Alternative to Credit Cards
As a small business selling products or services, accepting credit cards is almost expected by customers. What the customers don’t realize, however, is that you’re paying for their rewards with those 2% transaction fees. That 2% adds up over time and can make a huge difference to your bottom line.
This is one considerable reason to start accepting cryptocurrency as a form of payment.
While Bitcoin is the most well-known name, it is considered a “store of value”, “digital gold” and is relatively slow and expensive for small purchases compared to other options (though still cheaper than credit cards). The cryptocurrencies that are built for every-day or smaller transactions such as Litecoin, Stellar, and Ripple, offer transaction fees well under 1% in most cases.
If you’re concerned about volatility, there are tools available to convert the coins into US dollars right away.
Benefit 2: No More Fraudulent Transactions
Credit card fraud is becoming more common, especially with more business being done remotely overseas. If your company has been a victim of this, or you are interested in working with other countries without worry, payments done using blockchain tech, simply by the way it is programmed, cannot be reversed or changed. Plus there are no middleman fees.
Benefit 3: Track Logistics Without Error
IBM rolled out a suite of blockchain supply chain management tools that, for example, allow you to add any documents to a transaction without worrying about whether they will be deleted or modified. This is a “trustless” system. The who process becomes transparent to find and solve all inefficiencies within your supply chain while keeping a closer eye on inventory.
Benefit 4: Streamline Contracts for Any Business Transaction
Smart contracts written onto a blockchain, such as Ethereum, is a very affordable method for creating and enforcing contracts between your merchants, clients, and employees whether it’s for invoices, payroll, or other bills. It is even used to create insurance policies and close new deals.
The contracts are irrefutable and universally enforceable, so you will not have to spend time and money on filing and verifying information, or legal support.
Bonus: other overhead costs that can be decreased include security, Know Your Customer (KYC) protocols, data storage, and more, allowing your business to compete with competitors of all sizes more easily. Another significant benefit includes being paid on time all the time. This point alone solves one of the largest issues with small businesses – consistent cash flow.