Cryptocurrency has made a strong name for itself in the last decade, so much in fact that businesses have begun to lean into the advantages as well. Even a few years ago, the thought of using crypto in a business setting was out of touch with reality. However, this has all changed rapidly and people are successfully completing whole transactions on the blockchain and transforming the financial landscape in ways that have never been done before. How reliable is cryptocurrency for business purposes? This guide aims to find out.
The Perks
To establish a fair picture, the perks will be discussed first. Advantages such as accountability, transparency, fairer fees, and increased security all play a role here.
Facilitating Superior International Business Models
All of these advantages lead to superior international relationships, primarily in a B2B capacity. With payment platforms like Topper by Uphold, businesses can offer fiat-to-crypto conversions and rapid crypto transactions overseas with ease. This is not something that can be easily dismissed because it is changing the way that business is conducted in the grand scheme of things.
Decreased Fraudulent Infiltration
Another major concern for all industries has always been falling victim to fraud. This type of crime can be severe enough to shut down a companyand destroy reputations, things that are incredibly difficult to bounce back from. Finding a way to mitigate this, therefore, has been necessary for a long time, and the blockchain may be the answer everyone has been searching for. The heightened encryption and other features such as mining, inaccessible transaction data, and more, mean it is all adding up to a platform that performs at the top of its class when it comes to safety.
The Downsides
The downsides are the same things that are frequently associated with crypto-purchases and investment in any format.
Market Volatility
When people think of digital currency, one of the first things that springs to mind is how volatile the market has been since it first began. This means there can (and often are) extreme price fluctuations, which leads to losses and a general participation reluctance. This happens in a high frequency, which may just feel too precarious for a business venture.
Closures
Crypto markets are always closing. However, as long as you make a smart choice in this area, for example, leaning on the more reliable and established (well-reviewed) crypto exchanges, it should be less of a problem. The risk comes when you have invested heavily in a platform, as if it were to close, it would be difficult to reclaim funds, and so on.
Accounting Concerns
There is also the question of how to properly conduct accounting with regard to cryptocurrencies. How are the records supposed to be kept when it is brand new? What are the tax implications? These are all questions that need answering to retain legality and integrity.
So, while there are clear advantages for any business looking to dive into cryptocurrency, it is difficult to dive in with care when there are big risks to navigate as well.
