When the pioneering cryptocurrency was first developed back in 1990 by a company named DigiCash, few people probably predicted the extent to which it would take off in the years to come.
While that first cryptocurrency fizzled out, followed by several others in the ensuing years, the creation of Bitcoin by a shadowy figure known as Satoshi Nakamoto made a lasting impression. So much so that Bitcoin rose to become an influential player in the digital currency market, with the likes of Elon Musk eagerly acquiring holdings.
Building on the expertise of previous cryptocurrencies – none of which are still in use today – the success of Satoshi’s Bitcoin triggered the creation of a wide range of cryptocurrencies.
Over the course of the last ten years, crypto fortunes have experienced significant peaks and troughs. Despite the onset of more than one ‘crypto winter, these digital currencies have become more widespread, prompting an increasing number of companies to incorporate them into their business models.
If you are considering using Bitcoin and other cryptocurrencies as part of your business, read on for some helpful tips and important factors to consider to help make your crypto venture as seamless as possible.
Why You May Be Keen To Implement Crypto
Despite cryptocurrency’s volatility and the tumultuous events of recent months, many companies are eager to embrace crypto due to the various benefits it can bring. These include:
- Attracting new customers from previously untapped demographics.
- Allowing secure, streamlined, and speedy transactions with lower fees.
- Cryptocurrency transactions are not subject to differing national laws as crypto is decentralised, unlike fiat currencies.
- Providing more robust control over your company’s capital.
- Offering new and exciting opportunities for investment.
Of course, there are also a number of thorny issues to be aware of, which we will explore below.
Which Crypto Route Will You Choose?
While you may be keen to embrace the various advantages of cryptocurrency detailed above, actually implementing crypto in your business model will take some careful thought and planning.
For example, you will need to decide exactly to what extent you will implement cryptocurrencies; will you include them on your balance sheet, or will you focus solely on allowing payments using cryptocurrency?
Whichever route you decide to follow, there will be various changes that have to be made across your organisation to ensure the safe and effective implementation of crypto.
You should also be aware that not all cryptocurrencies are the same, so it’s important that you do your homework and familiarise yourself with the pros and cons of individual digital currencies, as there may be some that are better suited for your particular business. For example, if your company is heavily invested in promoting sustainability, then Bitcoin would not be the appropriate choice as this cryptocurrency has a sizeable energy footprint that is unlikely to be reduced anytime soon.
Things To Consider As You Embrace Cryptocurrency In Business
There are a number of important factors to take into account as you transition to a business model that includes the use of cryptocurrency, to whatever extent.
Security is a major issue. While cryptocurrency transactions are generally more secure than fiat transactions, there is still a risk of hacking. You may wish to consider conducting a risk assessment and acquiring the services of a reputable UK IT support company to ensure you have taken all of the appropriate measures to ensure high levels of cybersecurity. They can also evaluate and repair any issues with your IT network in general, to help make sure your crypto transactions go as smoothly and quickly as possible.
To gain the highest levels of cybersecurity, you may also want to consider using blockchain technology, which encrypts sensitive data to make it even tougher for hackers to access it. Other benefits of blockchain technology include its low-fee transactions and the level of transparency it provides.
When setting up as a crypto-friendly business you will also, of course, need to create your own e-wallet where you can store your cryptocurrency payments. There are several different types of e-wallet to choose from, so make sure you do your research and select the one that suits your requirements.
Assess The Market
Finally, before you hop on board the crypto bandwagon, it may be a good idea to evaluate the current state of the market.
As of late 2021, cryptocurrencies had plunged into another ‘crypto winter’, viewed by some experts to be the worst to date, and recovery could take a long time. As a result, you may decide it is not the best time to transition to using digital currencies, as their value will be lower, and you could potentially lose out.
The volatility of cryptocurrency is arguably the biggest downside of investing in this type of technology. It should be seriously considered before you move to incorporate Bitcoin and other cryptocurrencies into your daily business practices.