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What Could Bitcoins Future Mean for Your Business


bitcoin

 

The bitcoin discussion has been a driving conversation amongst financial and commerce professionals for a while now due to one giant factor, indefinite possibility. Everyone however, is not in the dark concerning future projections of the currently unregulated digital currency system as IBM has predicted that by 2020 two-thirds of banking organizations will be participating the in the close to $70 billion dollar internet-based economy. (Source: Forbes, 2017)

But what does that mean for the average business? What are some of the determining factors you should consider before investing in the next big wave of technological advancement for your business?

To quickly go over some of the basics, bitcoin is a “cryptocurrency” that can be used as a medium of exchange to make payments and facilitate consumer business transactions.

  1. To make a payment, a person uses his or her cryptographic credentials to sign a transaction transferring some amount of bitcoin to another person and submits it to the block chain.
  2. The miners perform the mathematic calculations necessary to verify the transaction, and if it is deemed authentic, they update the block chain to indicate the transfer of ownership.
  3. The whole process takes a couple of minutes maximum. Once written to the block chain, the transaction is not reversible.
    (Source: AmericanBar, 2014)

 

Why Integrate Block Chain Technology in My Business?

  • Bitcoin “transactions” allow for person to person business to take place, promoting an increase in speedy purchases by eliminating the fees that are regularly associated with banking institutions.
  • You can limit the amount of cash you have to manage on the premises of your company, and reduce the amount of time you would ordinarily spend on accounting and book-keeping of cash transactions.
  • Block-chain technology can seem appealing to customers who are interested in doing business with a company that is on the cutting edge of payment technology, or international consumers who want to reduce tax liabilities and international processing fees.

 

Additional Things to Consider

  • This system is currently unregulated and digital, so chances of it being hacked or computer theft are possible.
  • Bitcoins are not associated with a specific value like US currency and are used as “placeholders” until a transaction is complete through a hard currency.
  • There are requirements for licensing and registration for businesses that choose to partake in bitcoin-related business.
  • Some ways to mitigate risks include incorporating a system that converts bitcoins at the close of day to an official currency, as well as employing a bitcoin storage provider that offers insurance such as Elliptic Vault. (Source: NortonRoseFullbright, 2014)

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