The introduction of cryptocurrency in the market saw mixed reactions from people. The majority of the people saw crypto as a big scam and an avenue for illegal black-market activities. Present-day, crypto acceptability has grown to levels that no one expected. People do not see it as a black-market transaction avenue but have now understood the numerous advantages that come with the use of cryptocurrency.
At the inception of cryptocurrency, businesses also did not accept it as a transactional method since it was a new form of digital currency. Present-day, most of the prestigious business institutions have greatly embraced crypto and added it as a way of conducting business transactions.
Crypto Application in Business
Crypto is basically a digital form of money that uses blockchain technology. Blockchain technology, on the other hand, is an unalterable public ledger of recording transactions. This is because blockchain technology keeps a continuous record of all transactions in the network. The data is then distributed across thousands of computers, making it impossible for hackers to hack.
This makes crypto an interesting alternative to handling business transactions that surpasses the traditional transaction methods. Crypto and blockchain are set to disrupt how we do various activities. Sportsbooks are already banking on the transparency of blockchain to help gather data that people can use to develop a betting strategy. Here are applications on how crypto will change day to day business:
The term ‘Smart Contract’ was initially developed in 1993. However, it was not a term understood by many at the time. Smart Contract became popular in 2013 following the release of a project dubbed, The Ethereum Project. A Smart Contract is a computer program for a transaction that is automated to control and execute relevant action based on the terms and conditions of a contract or agreement.
The main advantage of using a Smart Contract is that it removes third-party interferences. This means that there are no fraud, censorship, enforcement costs, and arbitration costs that would arise from the third parties. Financial experts have defined Smart Contract as Escrow-held financial security using a network connection to recipients based on future occurrences that run on a computer code.
The application of Smart Contract to business is a big advantage as it lowers the cost of the most common day-to-day transactions by bypassing the set rules and regulations. The other big advantage of using Smart Contract in business is that it offers high levels of security. This is because Smart Contracts are unbreakable.
One of the greatest successes in companies using smart contracts is Slock. The bicycle renting company applies Smart Contract in their day-to-day business. The company uses an internet of things platform that is based on Ethereum, where they agree on the terms of the contract of renting a bicycle then afterward release the bicycles. Smart Contracts will surely change how business is done in the future
Improved Security and Privacy
One of the biggest advantages of using cryptocurrency is that it runs on blockchain technology. Blockchain technology greatly improves how day-to-day business transactions are carried out. This is because blockchain offers unmatched security on all financial data of the business entity. Blockchain technology is secured with many security measures, including an end to end encryption which completely removes hackers or any unauthorized people from the financial information.
Normal financial data is stored in computers that use servers that are prone to hacking. On the other hand, Crypto information is stored in blocks distributed across a network of many computers, making it impossible to be hacked. The use of crypto also enhances the issue of privacy as the information does not have to go through a third party. When using crypto, it is easy to anonymize financial data, as special permission is required to access any crypto transaction.
During the inception of cryptocurrency, many companies were skeptical about the adoption of cryptocurrency. However, most companies and business entities embrace cryptocurrency and are even using it to pay their employees. This is mainly because cryptocurrency runs on blockchain technology which ensures maximum security for crypto data.
One of the popular cryptocurrencies used in the payment of employee wages and salaries is Bitcoin. Recently, research is being done to develop crypto payroll applications that can be used to pay salaries to employees. Bitwage is among the first inventions towards a crypto payroll. The app is set to enable companies to register their employees on the platform such that salaries are converted to bitcoin and automatically sent to the employees. This is going to save on costs that would otherwise be incurred in bank transfers and time that would be taken to process the payments
Even though many people are yet to understand how blockchain works, crypto will surely change how business transactions are handled in the future.