The Impacts of Cryptocurrency on Businesses

Cryptocurrency is a decentralized digital currency technology changing the business landscape for the better. According to Zippia, approximately 15,174 businesses worldwide have adopted Bitcoin and other digital assets, and the number is expected to grow. 

While crypto is volatile, its potential impact on untapped markets cannot be ignored. From fraud elimination to transaction transparency, here are the impacts of cryptocurrency on businesses. 

Benefits of Adopting Cryptocurrency

If you are contemplating accepting cryptocurrency payments, here are some of the benefits you may enjoy:

1. Attract New Customers and Demographic Groups

Unlike fiat currency, cryptocurrency has low transaction costs, and not all businesses accept crypto payments. By taking advantage of this gap, a business can attract customers looking to escape the hefty charges of traditional payment methods. 

The online gaming industry has already accepted crypto assets. Gamers receive non-fungible tokens (NFTs) or crypto coins like Bitcoin as rewards for winning a match. Major eCommerce stores are also accepting crypto payments. Casinos, too, are shifting to digital currency payments to remain competitive. For example, Kahuna Casino accepts Bitcoin, Bitcoin Cash, and Ethereum deposits. If you love increasing your bankroll without investing a lot, here are the best $10 deposit online casinos in Australia. The casinos have varied games and lucrative bonuses.

2. Lower Transactional Fees

Businesses find cryptocurrency advantageous over traditional money because transaction fees are low or sometimes zero. Sending, receiving, or converting cryptocurrency at little or no cost allows businesses to maximize profits. Businesses that transact large volumes of money can benefit from cryptocurrency—they may cut up to 100% of transactional expenses.

3. Extra Layer of Transparency and Privacy

Cryptocurrency is built on blockchain technology. Any cryptocurrency transaction on the blockchain is recorded in an immutable ledger that cannot be altered. The blockchain explorer allows blockchain users to view live transfer of digital assets from one account to another. This makes it easy for businesses to track and audit transactions. 

Crypto transactions rely on cryptographic keys, eliminating the need for personal details to complete a transaction. This adds an extra layer of privacy.

4. Reduced Risk of Chargeback Fraud

Another advantage of adopting crypto payments is that it reduces the risk of chargeback fraud. Unlike fiat currencies, cryptocurrency transactions recorded on blockchain’s immutable ledger are irreversible and permanent. So, once a customer has completed a transaction, they cannot initiate a chargeback. 

5. Cross-Border Transactions

Despite the new era of commerce, fiat currency has limitations. Businesses may encounter cross-border payment barriers when selling products or services to worldwide clients. 

Cryptocurrency offers an alternative gateway. Businesses can receive payments via cryptocurrency from any client across the globe at little or no transaction cost. 

6. Access to New Liquidity and Capital 

Access to new liquidity and capital is among the reasons small businesses should consider accepting cryptocurrency. Businesses can be loaned cryptocurrency to improve and scale their product lines without encountering the limitations associated with traditional lenders. 

Additionally, crypto is based on decentralized finance. This means businesses can readily access their cryptocurrency balance and convert it into cash anytime. 

7. Fast Transactional Speed 

Traditional payment methods may take up to five working days to transfer assets from one account to another. Customers must incur extra costs for an instant or under-24-hour money transfer. With cryptocurrency, transactions are completed within minutes, making it attractive to many businesses. 

8. A Hedge Against Inflation 

Crypto assets have a defined cap that can be minted in a lifetime and cannot be exceeded. On the contrary, fiat currency has not limited supply, making it vulnerable to inflation. 

With the growing supply of money and limited cap of cryptocurrency, the value of fiat currency will decrease. A decrease in fiat currency value increases the value of crypto assets, making them a hedge against inflation. 

Risks of Accepting Cryptocurrency

While accepting cryptocurrency is appealing to any business, you must be prepared for some of its downsides: 

1. Cybersecurity 

Where money is involved, scams abound, and crypto assets are no exception. While crypto offers advanced data security and privacy, cyber-attacks are becoming prominent. One report indicates that in the first half of 2023, crypto hackers have stolen $2.8 billion. However, it’s possible to avoid digital deception and reclaim money from crypto scams. 

2. Volatility

Cryptocurrency is highly volatile, and prices of many digital assets fluctuate widely. For example, the value of Bitcoin reached its all-time high ($68,789.63) in November 2021. In 2022, the price of Bitcoin dropped by 64% from its highest point of sale ever. After a big jump in 2023, the price of BTC is now around $25,000 again.

3. Irreversible Transactions

Unlike traditional currencies, cryptocurrency transactions are irreversible and permanent. If you send a crypto asset to the wrong address, there’s no chance of refund or cancellation. This increases the risk of losing your crypto assets permanently if you send them to the wrong wallet. 

Cryptocurrency is the Future of Business 

Cryptocurrency is undoubtedly becoming the mainstream payment alternative to fiat money. The benefits cryptocurrency offers are long-term and must be noticed. From attracting new customers to reduced transaction costs to cross-border transactions, cryptocurrency is the future of business.