Finance

The Possibility of a Cashless Economy

With Bitcoin the payer simply needs to calculate the exact bitcoin equivalent of the amount to be sent in the local currency of the entity that one is sending payment to.

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Digitalisation has changed the way the world understands finance. The possibility of a cashless economy has given rise to Bitcoins, Blockchain and Cryptocurrency. The concept of Bitcoin was coined on 3rd January 2009 by a person named Satoshi Nakamoto as an online currency that requires no centralised administrator or any repository. Ever since its conception the value of Bitcoin has slowly increased with its current value being higher than over 72 billion pounds. Yes, it’s worth more than Morgan Stanley and Goldman Sachs!

Why are we discussing Bitcoins and Cryptocurrency here?

Well, because it is important to SMEs. Here’s why?

  1. Bitcoins are going to be the next trading currency

Yes, you have heard it right. The dream of a cashless economy is slowly materialising in Cryptocurrency. Many influential banks are looking at this possibility very closely. It is old news that countries like Sweden and Denmark are moving into a completely cashless society. Needless to say that Cryptocurrency has made its presence felt slowly, but surely! Looking at where the business world is heading to it is important for SMEs to think in terms of Cryptocurrency.

  1. Bitcoins are accepted as a Payment for products:

     A recent study revealed that almost 100,000 merchants are now accepting Bitcoins as a payment for products and services. Accepting bitcoin as payment allows them to effectively leverage an increase in the value in Bitcoin as against takings in their respective businesses. Needless to say that it is a good way to reinvest into one’s business. Companies who now accept Bitcoins as payment are Virgin, Bloomberg, Expedia, WordPress, Subway and Microsoft. Is there any reason why you think your business should stay behind?

  1. Cryptocurrency is Decentralised:

A financial transaction as we know it now goes through a lot of intermediaries like a middle man, a bank, a broker an agent etc. These elements were initially added in the process of a financial transaction to ensure that there is no breach of trust. Nonetheless these intermediaries did not come free of charge. In a way having these intermediaries eats away at a major chunk of money in the first place.

The usage of a Bitcoin removes the need for intermediaries because it runs on a decentralised network. With the usage of Bitcoin one can easily transfer money over a secure network for no fee. Moreover it also comes with the benefit that every transaction is recorded in a ledger that cannot be intercepted by banks or hackers.

  1. The usage of cryptocurrency is secure:

Cryptocurrency can only be transferred over a network of people who owns cryptocurrency.  It is like a chain of blocks where a particular person’s account is a block and the network being a chain that links the blocks. This gives rise to the word – Blockchain.

It is believed that the Blockchain technology is so advanced that it has the potential to replace internet itself.

It is impossible to intercept a transaction here. This is because there are one million cryptocurrency wallets in a network. So to intercept one transaction here one would have to hack every single one. This is impossible even for the smartest hacker. This makes Blockchain networks the most secure till date.

  1. Fast Overseas Transfers:

              Overseas transfers are usually an expensive and a slow process. The usage of Bitcoins can help an SME save both money and time because transactions with Bitcoins takes only 30 minutes or less.

With Bitcoin the payer simply needs to calculate the exact bitcoin equivalent of the amount to be sent in the local currency of the entity that one is sending payment to. After this is made, the transaction is successfully done and the payee can withdraw the amount in their own currency.

  1. Customers gradually would prefer Bitcoin Payment:

Making payment with Bitcoin is something that will define the way people pay in the future. All one needs to do is to transfer the amount from one’s bitcoin wallet to the other. Bitcoin payment can easily be done with a smartphone alone. The BIC store in Japan has already started accepting Bitcoin payment from customers and given that it makes payment so hassle free, it is soon to catch up with the rest of the world.

  1. Marketing Strategy:

Bitcoin is a topic that is covered up by every business tabloid. These tabloids also keep a track of which businesses has started accepting bitcoin as a payment method. Given this scenario, an SME if it starts accepting bitcoin at this stage, it will gain a lot of attention from the media. This will naturally lead to it being mentioned in all important business discussions. There is a saying, ‘Make hay while the sun shines.’ For competitive SMEs who want to reach a height of media success and boost their marketing chances, this is the right time to introduce bitcoin in their company.

Cryptocurrency is the next new thing in the finance world. The big corporations have already tested and tried this new emerging way of making payments. The success of bitcoins has gone higher with every transaction. More and more corporations are heading towards embracing it. It is only when one moves in tune with the changing trends that one can keep pace in the competitive business world. SMEs who choose to keep their old way of doing things unless it is deemed necessary have a lot to lose. It’s true that given that cryptocurrency is a very complicated and technologically advanced concept not everyone is keen on using it. But it is always better to lay the foundation in one’s company to support a future of cryptocurrency transactions. A company can easily do that by educating its people, following latest cryptocurrency trends and by shaping ones business towards the needed finance evolution. The emergence of cryptocurrency has changed the way we understand finances.  It is a concept that has made dealing with finances more convenient. Embrace the technology of Cryptocurrency and step into technologically advanced way of making payments.

About the author

SPI Group

An integrated platform created to serve entrepreneurs and service providers. SPI engages with over 100,000 Entrepreneurs & Senior decision makers through a unique combination of cutting edge business magazines, high profile B2B summits and conferences, strategic alliances with Govt, business associations and government bodies. SPI also leverages the power of digital marketing and social media.

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