Could cryptocurrencies save your small business money?
Technology is transforming every aspect of our lives, and the business world is no different. For small business owners, advances in financial technology such as blockchain – and the cryptocurrencies it enables – are potentially revolutionary.
At the very least, it seems that cryptocurrencies could offer small business owners a number of different ways to save money. So, with that in mind, here is our guide to just a few of the different ways in which cryptocurrencies might help you and your small business to operate more cost effectively.
1. Using cryptocurrencies reduces fees
The secure blockchain technology that powers cryptocurrencies allows for direct, and almost instant transactions between two parties. There is no central bank regulating the way that cryptocurrencies are used (yet) and also no brokers to pay. By taking out all of these unnecessary barriers to a smooth transaction and instead having a direct transfer of digital coins, you can reduce your costs by a considerable amount. When you consider that some credit card companies will charge up to four per cent or higher for the pleasure of using their service, it is clear that substantial savings are possible thanks to no-fee transactions.
2. Cryptocurrency transactions are quick and seamless
Because of the secure nature of the underlying blockchain technology, every party can be sure that their funds are being transferred safely and securely. Small businesses can quickly make cryptocurrency transactions on slick, user friendly online systems. The huge advantage here is that you no longer need to wait for payments to clear or to go through an opaque ‘processing’ period at the bank. Your funds are quickly available, often within 20 minutes or so – meaning you can make the essential purchases you need for your business to operate smoothly.
3. Safer and more secure transactions
Cryptocurrencies rely on blockchain technology to work. This is essentially a vast ‘shared ledger’ system which is incredibly difficult to hack into. It means that, as a small business, you can transfer money, make payments and receive money from customers in the knowledge that your funds are secured within your company’s unique digital wallet. And, because there are fewer stages between you and the person you are dealing with, the chances of administrative mistakes is reduced.
So, those are just a few of the potential advantages of using cryptocurrencies for small businesses. The technology represents a secure, low cost and efficient way to handle funds online. But it is also worth pointing out that many of the advantages – a lack of central control or regulation for one – could also be potential weaknesses if things go wrong.
We recommend using cryptocurrencies as a way to save your business money by all means, but – as with all new technology – always do your due diligence and go carefully.
Jürg Widmer Probst