Cryptocurrencies have emerged in the world of finance as an alternative money proposition. Companies and merchants can make use of this technology that offers advantages and disadvantages compared to traditional money.
In this article, we will analyze the advantages and disadvantages of using digital assets for commercial purposes. Therefore we leave aside the position of view criptomonedas buying to invest or do trading with them. The actual growth of technology will be by the use that companies give it as a means of payment, speculation is a way to make money, but it will not help the mass adoption of cryptocurrencies.
Advantages and Disadvantages
First, and because they are more numerous, we will analyze the advantages of using virtual money for a business. Technological advances always tend to prevail, and in this sense, the blockchain offers an exciting range of possibilities for mass adoption in commerce.
Advantages of using Cryptocurrencies for Commercial Purposes
Using cryptocurrencies to facilitate payments is very positive, especially considering that anyone can have a Bitcoin wallet without accessing banking services. In this way, a door is creating through which potential clients from countries without access to services such as credit cards can enter. Payments are made directly from the wallet application. As merchants, it is possible to have a wallet to receive payments in crypto linked to our site or web store.
Speed and Total Control in Payments
Payments are almost instantaneously, no matter what part of the world the sender and receiver live in. We are used to making international transfers with long waiting periods and large commissions. There is no intermediary between Bitcoin and other cryptocurrencies, so the transaction is made directly between the interested parties. Digital currencies offer the advantage that users have complete control over their money.
Very Low Commissions
The commissions when making value transfers with cryptocurrencies are meager. Users themselves can decide what rate they want to pay to give priority to the operation. In some cryptocurrencies, smartsheet license cost even the transfer costs are free.
They are still a company that offers a service for profit. On the contrary, systems based on blockchain technology are decentralized and generally developed by non-profit foundations. This translates into a free and open service for everyone.
Full Control Over Transactions
Among the advantages and disadvantages that other well-known international payment services such as PayPal offer are its dispute system. It is effortless for the buyer to claim their money. For the merchant, it is often a nest of scams.
On the contrary, Bitcoin or other cryptocurrency transactions are irreversible. Users have complete control over the money transfers they make. It will then be the merchant who will have to personally manage the return in case of a problem with the product. Fraudulent returns can thus be avoide. The business will be the one who will have to assure its customers that the deal is honest. It will not be necessary for an intermediary to mediate and always give the buyer the reason even if he does not have it.
Anyone can check the blockchain ledger for a given cryptocurrency. In this way, it will likely demonstrate that a transaction has been carrie out in the event of a problem. There is no possibility to alter or hide the information on the blockchain. This will be irrefutable evidence that any judge or person with legal responsibility should accept, such as a notary.
In addition, in cryptocurrencies such as Ethereum, or NEO based on innovative contract systems, a contract can include in the transaction that serves as proof of the end of said transfer of value.
Disadvantages of Using Cryptocurrencies for Business Purposes
If we plan to weigh the advantages and disadvantages of cryptocurrencies in terms of their commercial use, the positive side will win out. However, there is no such thing as perfection, much less when we talk about monetary values. Cryptocurrencies still have a long way to go, and they also have considerable disadvantages compared to currencies or digital payment systems already considered traditional.
The volatility of these assets and the drastic change they undergo in their price continuously encourages investors and turns traders back. Entrepreneurs considering accepting Bitcoin as payment for their products or services are rightly afraid that volatility will erase their profit margin at a stroke.
For this, there are possibilities to convert the payment made in crypto to fiat money instantly. However, if cryptocurrencies want to fight to replace FIAT money, they will have to find a solution to this problem by themselves. Perhaps that solution is coming in the form of Stablecoins.
Reliability and Acceptance
Before, we talked about the advantages for the seller that payments are irreversible. People who want to purchase a product or service on a website that they have no reference to will look for payment systems such as PayPal that offer the possibility of opening disputes before cryptocurrencies. Therefore, it is a period to talk about the prejudices and the little security this presents for buyers.
Once a person has paid for something and sent their crypto, they can no longer get it back in any way. Logically, this generates distrust and little desire to use this technology by the buyer. Merchants must include a fair return system and give their customers confidence.
Development and Trust
There are not yet the necessary applications for anyone to use crypto quickly and. Cryptocurrencies are in the process of maturing. They have to offer solutions in the form of software so that anyone can send and receive payments with little computer skills. Currently, you have to send coins to cryptographic addresses made up of entirely unreadable letters and numbers. This is at the core of the security of this system. However, in mind that if people have access to one-click payment systems. They will not complicate their lives using more complex designs that are not widely recognized.
Also Read : Stages of Technological Evolution
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