Bitcoin is the first digital currency that doesn’t need a third party to process transactions. Instead, it makes use of blockchain innovation, which is an open database of all Bitcoin activities. It means that anyone can see how much bitcoin someone has, but they don’t know who owns it. If you want to start bitcoin trading check the legal risk involved in cryptocurrency for investors
Bitcoin is slowly becoming more popular, and as it does, more businesses are starting to accept it as a form of payment. It includes Cognizant, a significant global IT services company.
Cognizant has begun accepting bitcoin as a transaction method for its operations. It is a big deal because Cognizant is a massive company with clients worldwide.
It might lead to an increase in the number of companies accepting bitcoin as a means of payment.
7 Ways how bitcoin can affect Cognizant:
1. Cognizant will be able to accept bitcoin payments from its customers:
It would be a significant advantage for the company, as it would allow them to expand their customer base and attract new business.
2. Bitcoin could help Cognizant reduce its dependence on banks:
Banks have been known to charge high fees for international transactions. With bitcoin, these fees would be eliminated, saving the company money.
3. Bitcoin could make it easier for Cognizant to do business in emerging markets:
Emerging markets can be challenging to do business in due to restrictions on currency convertibility. These limitations, however, would not be a concern with bitcoin.
4. Bitcoin could help Cognizant speed up payments:
Bitcoin payments are processed quickly, which could help Cognizant reduce the time it takes to receive payments from its customers.
5. Bitcoin could help Cognizant reduce its credit card processing costs:
Credit card processors typically charge high fees for their services. By accepting bitcoin payments, Cognizant could avoid these fees and save money.
6. Bitcoin could help Cognizant protect its customers’ privacy:
Bitcoin payments are made anonymously, which would protect the identities of Cognizant’s customers.
7. Bitcoin could help Cognizant reduce fraud:
Since Bitcoin payments are irreversible, they would eliminate the risk of chargebacks, which often lead to fraud.
7 Negatives of bitcoin that can affect Cognizant
1. Lack of Pervasion
As of September 2017, just 24 out of 500 most prominent organizations accepted bitcoin as a type of installment (down from 29 in 2016).
Numerous organizations have not yet understood how to manage digital currency exchanges or are uncertain of its future. For Cognizant, this could mean lost business opportunities with vendors and customers who only want to transact in bitcoin.
2. Limited use cases:
Bitcoin is mainly used as a digital currency for buying and selling goods and services. However, there are limited use cases for bitcoin beyond this. Therefore, it may hinder cognizant’s future ability to utilize bitcoin for payments.
3. Lack of regulation:
There is no official or banking agency that regulates Bitcoin. This lack of regulation creates a risky environment for investing in bitcoin.
4. Security concerns:
Due to bitcoin’s decentralized nature, it is difficult to protect against fraud and theft. For example, Mt. Gox, a bitcoin marketplace, declared bankruptcy in 2014 after being scammed and losing $450 million in bitcoins. It could mean that cognizant could lose money if it invests in bitcoin.
5. Limited acceptance:
Many merchants do not accept Bitcoin, limiting cognizant’s ability to use it for transactions. For example, as of September 2017, only 24 out of the 500 most prominent organizations accepted bitcoin.
6. High fees:
The fees associated with bitcoin can be high. For example, the average transaction fee for a bitcoin transaction was $4.19 in December 2017. Therefore, it could make it costly for cognizant of using bitcoin for transactions.
7. Environmental concerns:
The mining of bitcoin requires a lot of energy, which can have negative environmental consequences. For example, it is estimated that the annual electricity consumption of bitcoin mining is equivalent to the yearly electricity consumption of Denmark.
It could mean that cognizant’s investment in bitcoin could have negative environmental impacts.
There are equal benefits and downsides to consider regarding bitcoin and Cognizant. Overall, the positives seem to outweigh the negatives, but it is essential to weigh the risks and benefits of investing in bitcoin before deciding.