What is cryptocurrency and what does it mean for businesses?

November 28, 2017

Cryptocurrency couldn’t be hotter right now. The digital currency is growing at a phenomenal rate, consistently defying reports that the bubble is set to burst. Probably the most famous name amongst digital currencies, Bitcoin, is proving so popular that prices for it have hit a new record, surpassing $7,000 for the first time.

Many believe that cryptocurrency is set to become a mainstream financial asset on the scale of gold or oil, but still, that means so little to so many people who remain in the dark about the financial revolutions happening in the digital world.

So, what is cryptocurrency? Should it be something your business needs to look at as part of its overall growth strategy? Are your customers using it and should you be worried about your traditional payment methods being eclipsed by its phenomenal growth?

Get educated by working with a payments provider

All relevant questions, and ones that can be answered by partnering with an experienced payments services provider proficient in the workings of both off- and online currencies.

When talking about cryptocurrency it’s worth starting at the beginning with Bitcoin. Created in 2009, there are now over 900 different digital currencies available for people to dabble in. Digital currencies such as Bitcoin are designed to be secure and anonymous, using cryptography measures to turn data into incredibly hard-to-crack code.

For users, it allows them to make secure payments and store their money without having to go through a bank or using explicitly identifiable information. It can also help them to avoid banking charges. That degree of anonymity has found legions of fans in the internet age where social media and other technologies have become such an intrusive part of people’s lives.

There are other benefits too. Cryptocurrency transactions can’t be faked or reversed, and fees tend to be lower than when using conventional currency. Markets are growing at a fast rate too; the first adopters of Bitcoin are now said to be worth millions despite there still being some market uncertainty around the practice.

Should your business be using digital currency?

With close to 17 million Bitcoins in circulation, what many perceived as a cult service under a decade ago has grown into something that hundreds of thousands of people are using, spawning cryptographic wallets and more.

Banks are also said to want to start using the currency, too, to better integrate with the Internet of Things and increase their relevance to tech-savvy markets who are fast adopting digital currencies alongside other disruptive financial technology solutions.

The question of whether you should be using it for your business is something of a personal one though and one that demands greater research. Talk to your customers and identify the ways they’re paying for goods and services. If they’re investing their own efforts into digital currencies then maybe it’s something you should look at yourself.

What you perhaps shouldn’t be doing is investing everything into Bitcoin in the hope of increasing brand relevance. Working with a payment services provider with knowledge of the market will not only help you keep in line with the payment solutions your markets are using, but futureproof you too and advise you of the next steps to take in an increasingly fast-paced and complicated marketplace.

Find out more about cryptocurrency and what it could potentially do for your business by speaking to Fibonatix’s payment service specialists today.