Blockchain technology continues to gain respectability across the business world. It is now used for a variety of reasons, however, became well known for its involvement with the cryptocurrency giant, Bitcoin. Many business have now introduced cryptocurrencies like Bitcoin investments in their business operations and day-to-day transactions therefore relying on the application of blockchain technology.
So, if you are looking at using the adoption of blockchain technology, you will be joining the ranks of big-name corporations like Starbucks, Amazon-owned Whole Foods, Nordstrom, Lowes and others that already use blockchain. The trend also has opened a huge opportunity for technology companies eager to profit from the new market with services like the IBM Blockchain Platform.
Carefully consider the pros and cons
What is blockchain? In simple terms, the "block" is digital information and the "chain" is a public database. Together they form a public ledger recording crypto transactions. The advantages of this way of doing business are compelling. But so are the disadvantages.
The benefits
On the plus side, transactions are faster, cheaper and more efficient. No more waiting for payments to clear banks; peer-to-peer exchange via crypto is virtually instantaneous. No banks or other third parties involved also means less cost. Fees are a fraction of what credit card companies charge.
Moreover, crypto is safer. Payments are irreversible and more secure than traditional remittances. There is no danger of chargeback fraud. Highly complex encryption makes it virtually impossible to fake a digital currency transaction.
Also, blockchain is an alternative payment system. Deploying the technology could attract new customers who are looking for new ways to pay for goods and services. Many of them are already using crypto to buy and sell, so they will naturally gravitate to other businesses that speak the same transactional "language".
Extending the technology to other areas of your business also is possible. The Economist reports that Bitwage is a new Bitcoin-based service that says it simplifies the payroll process by speeding up payments and reducing associated costs.
A look at the downside
For all of its advantages, crypto poses some risks you need to take seriously. Price volatility is known as one of the main negatives. Digital assets are not price secure even though payouts are based on dollar conversion rates. Moreover, high tax rates in some countries could erode the cost savings or eliminate them altogether.
Despite the security of the blockchain itself, some digital wallets, which must be set up to receive funds, have proven to be problematic.
Also, be mindful that even though low regulation currently is a big attraction for introducing crypto to your business, no one can predict how long it will stay that way. Government's natural inclination to both regulate and tax can quickly undermine - or even destroy - the most profitable business sector.
Conclusion
The explosive growth of this exciting technology will continue in the years ahead. Your business can be a part of it. But investigate the pros and cons. Wider acceptance doesn't make it right for you. The advantages of faster, cheaper and more secure transactions must be weighed against factors of price volatility, tax rates and uncertainty over future government interference.
