Cryptocurrencies As A Means Of Payment: Should Companies Seriously Consider It?
Over the years, cryptocurrency has become a popular payment method. However, some companies are still skeptical about its use. This may be because they do not understand how cryptocurrency works and thus increase the fear of the unknown.
It has many advantages that a company can benefit from when used properly. Payments through Bitcoin, Litecoin, and Ethereum are now accepted by many companies. This means that those who do not adapt their business model to the new payment system may lose market share. Many people are going digital, and so cryptocurrency should be included in revenue growth.
What is cryptocurrency?
Cryptocurrency is a currency created using blockchain technology. Although there is no physical currency, blockchain technology (a type of distributed laser technology) can maintain the uniqueness of each cryptocurrency without doing everything possible. Anti-counterfeiting, and network accounting. The key to its accounting is “mining”, which uses the functionality of a computer’s graphics card to create cryptocurrencies. Thus, the production of cryptocurrencies is not without “costs”. Power consumption, graphics card, and computer performance production costs.
To grow a company and get more value out of it, it has to move forward over time. To expand their market, companies need to expand their payment options. The cost of transactions is significantly lower when using cryptocurrency without any third-party involvement. This means that entrepreneurs can reduce their selling price and provide benefits to consumers.
There is an opportunity to trade internationally without hindrance as there is no risk of chargeback fraud. With unchanged payments, business owners can operate without fear of fraud. Customer privacy is highly protected and it allows companies to expand their offerings and sell other sensitive (legal) products that customers may want.
Reasons why consumers are choosing crypto for payments
Consumers enjoy a high level of privacy and want to make sure their transactions are secure. Since cryptocurrencies are stored in blockchains, it is not easy for anyone to hack them. In the case of cryptocurrencies, we can say that it is almost impossible to counterfeit these currencies.
It’s easy to send and receive cryptocurrencies using a smartphone app or wallet. With so many currencies available, customers can quickly pay for business products and services. Also buying cryptocurrencies is as easy as going to an ATM and exchanging your money for coins that you can transfer to your wallet.
You can also get bonuses in cryptocurrency when you play online casino games online. A casino can offer a welcome bonus of up to 5 BTC if you sign up for cryptocurrency. This payment method is popular because it offers benefits like “Free Money”. There are many more companies that entice customers to use cryptocurrency. This is an advantage that works well for both consumers and businesses.
3 Major reasons to invest in cryptocurrencies in 2022
● Large companies continue to rely on cryptocurrencies as a means of financing.
● Cryptocurrency exchanges are evolving to enhance security and better meet user needs.
● Cryptocurrencies are very volatile, and 2022 is unlikely to change.
As you can see from the sidelines, cryptocurrencies have risen and fallen dramatically over the past year. But now that Bitcoin (BTC), the most popular cryptocurrency, is 35% lower than its November 2021 high, you may be wondering if there is a chance behind this volatility.
2022 is the year to go to cryptocurrency? This is a question only you can answer. There are good reasons to invest in cryptocurrency right now — and good reasons not to. Here are five positive and negative factors to consider when considering what role cryptocurrencies can play in your portfolio this year.
Cryptocurrency prices can rise and fall only based on the needs of investors. However, the greater promise of cryptocurrencies is that they will become a widely accepted payment for products and services.
The transition from a speculative object to a functional currency is already in full swing. The list of companies accepting Bitcoin and other cryptocurrencies is constantly growing. Pioneers Microsoft, Overstock.com, and e-commerce company Amazon gifts have been accepting bitcoin for years. More recently, PayPal, Whole Foods Market (part of Amazon), Visa, and Starbucks have joined these companies.
Exchanges that facilitate cryptocurrency trading can be centralized, decentralized, or a combination of both. Centralized exchanges are third parties that offer traditional money-to-crypto or crypto-to-crypto transactions. Coinbase (COC), one of the most well-known crypto exchanges, is a centralized exchange.
With a decentralized exchange, there is no intermediary — the transaction is settled directly between the participants through automatic code.
Each method has its advantages and disadvantages. Centralized exchanges provide customer support but are riskier for hacking. Decentralized exchanges are safe because they do not have a single point of failure. Unfortunately, decentralized exchanges are more difficult to use.
Experienced crypto users support decentralized models, but newcomers still need a user-friendly model. Exchanges are being set up to meet all these needs. Centralized exchanges are being decentralized, security is improving and a new generation of hybrid exchanges is being created.
This trend should benefit users and the industry’s reputation is moving forward.
Another cryptocurrency that has evolved is Stablecoin — a cryptocurrency supported by a reserve to keep prices stable. While Bitcoin’s trend line looks like the most terrifying roller coaster in the world, stablecoins are designed to hold their purchasing power.
You are not going to buy and sell in a stable currency, but that is not the point. Crypto investors use Stablecoin for their liquidity. You can save the price in Stablecoin knowing that it will not be worthless tomorrow or next week. When they need money to send payments or buy other crypto assets, they can quickly access the value of Stablecoin.
PayPal is creating a stable currency with the US dollar. This can be an easy entry point for new crypto investors, especially if PayPal offers interest on stablecoin deposits.
Optimistic investors are seeing an opportunity in the stock market downturn. The rationale is that when stock prices fall across the board, you can buy quality stocks at lower prices — even if companies’ ability to create value has not fundamentally changed.
Unfortunately, applying this view to cryptocurrencies is risky. Yes, the value of bitcoin increased to almost $70,000 last year. And yes, Bitcoin’s current value is in the low $40,000s. But you should not take it to mean that Bitcoin is being sold. This means that Bitcoin has lost value since November last year. Whether Bitcoin will be recovered is unknown.
Control for cryptocurrency can be good or bad. Puritans argue that over-regulation suppresses innovation and isolates those who value the privacy of the crypto economy. Others say the regulation legitimizes cryptocurrency and thus encourages adoption.
Regardless of your views on this spectrum, the future of crypto control — and its implications — has yet to be seen. Another risk to consider is whether you decide to invest in cryptocurrency in 2022.
Investing in cryptocurrencies in 2022
The acceptance of cryptocurrency is increasing, which is good for crypto users and investors. But there are also inefficiencies that could exacerbate the already high volatility of cryptocurrencies.
If you want to move to cryptocurrency in 2022, you should review your expectations — and get ready for a roller coaster ride. Take your own decision. Try not to deal with the middleman. Your own privacy should count as your own responsibility.