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Expert Answers to Biz Questions
Listen in! Pick up some expert advice to a reader's question that we selected from CyberSchmooz.
This Is How Small Companies Can Profit From Bitcoin Fever
There's a lot of talk these days about crypto coins. Beyond having a purely speculative approach, such as investment, the truth is that bitcoin in the company can be a very interesting financial tool to streamline certain transactions. In fact, the technology behind bitcoin, called blockchain, is allowing large financial institutions (but not just them) to explore how they can take advantage of these new currencies.
In any case, before deciding to use bitcoins or any other crypto currency, the ideal is to seek good financial advice. It has many advantages that can help us, especially if our company works in sectors such as e-commerce or exports in different countries, but can also pose a financial risk to take into account.
Agility in transactions with the use of bitcoin in the company
When a company works in different markets and operates in several countries, one of the drawbacks it needs to solve is how to move money from one place to another quickly. Financial transfers take time. We can't move money from one country to another immediately, we have to wait two days or more for the money to be available in the destination country. And this is not the case with bitcoin, which is a global currency and is immediately available.
Therefore, the companies that can make the most of this or other crypto currencies are those that export or import products and need to use their financial resources in different continents. But also those that have their business model on the Internet, since payments through bitcoin have a very important security component.
While in a bank someone can make a payment and then revoke it or say that he has not done so, with bitcoin you do not have that problem. In addition, you cannot issue a payment if there are not enough bitcoins in your account. Companies have the guarantee that they will collect the payments they make with the crypto currencies says https://coinsspent.com/
In addition, transaction errors are reduced. This means that we do not have to be prepared for any eventuality, that the money does not arrive or that we have to repeat the operation because it has not happened. With crypto currencies, all transactions are recorded and your decentralized network is prepared to maintain a stable structure that does not depend on four or five important nodes.
Lower commission costs
For the financial directors of the companies, the costs of carrying out an operation are very important. Moving money from one country to another, converting it from one currency to another can lead to significant commission or financial costs. With bitcoin and crypto currencies, the cost is zero.
This makes many companies consider working with this type of global currency, which can move freely from one country to another, which can be used anywhere, which is increasingly accepted to make payments in more places and facilitates the international growth of the company.
Attract new customers
But it can also help attract new customers. We're experiencing a bitcoin fever, as evidenced by media coverage of it or by more than one conversation during past Christmas meals revolving around its possibilities. It is a fact that more and more people are buying crypto coins and that our company accepts payments in bitcoins can be a way to win new customers.
Also to be ahead of the competition or associate the image of our company to a technology, an image of innovation that nowadays can be a good solution to capture clients or to be able to offer better prices, being more competitive.
Volatility, the risk of cryptomoney
But the use of bitcoin in the company also has its risks. The volatility of the currency, with very important rises but also vertiginous falls, can be a problem. The truth is that bitcoin has risen by 1,400% in one year and that the shadow of the bubble has long hovered over the cryptomedas.
This means that, in many cases, cost savings, agility or security take second place, especially for companies that do not want to risk part of their capital. In addition, while in a traditional exchange transaction you can take out exchange hedge insurance, with the cryptomime, its volatility is a brake on this type of insurance.
Finally, it should be noted that bitcoin transactions are anonymous transactions. This is an advantage for many companies, as the identity of the parties involved in a transaction is not revealed. In fact, central banks do not regulate bitcoin, which can pose a risk for many companies.
Now it is up to each of them to decide whether they operate with these currencies and how much of their financial resources they allocate to it. An investment at the right time can be very successful. However, if money is needed in the short term, losses can result from the volatility of its value.
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