Cryptocurrencies' Role in Small Businesses

By CIOReview | Monday, April 22, 2019

The rapid growth of cryptocurrencies astonished many onlookers of the market, but proponents of these new digital tokens continue to persist that cryptocurrencies are only just beginning. Businesses of all natures and sizes across the globe are now started to recognize cryptocurrencies as something more than a fad, and small business owners, in particular, are waking up to the fact that when it comes to popular tokens like Bitcoin and Ethereum, they need to do their homework.

For small businesses, digital tokens have not been created equally. Some of the world's largest cryptocurrencies have headline-grabbing names that most people are at least somewhat familiar with, even though they don't understand the tokens or the technology itself; for instance, Bitcoin, Litecoin, and Ethereum are widely recognized around the world. Yet, there are already more than a thousand cryptocurrencies on the market, and it is imperative to understand that, like real currencies, their value and use can vary widely.

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Cryptocurrencies are intrinsically volatile; certainly, the cryptocurrency market's defining facet is its volatility, as the price of both popular and vague tokens fluctuates at a harrowing rate on a regular basis. This does not imply that all cryptocurrencies are a bad investment, or that small business owner should completely shun them; preferably, it means that cryptocurrencies, like all volatile investments, need to be carefully managed and approached with more caution than usual. The fact that cryptocurrencies have been largely ignored until recently by mainstream economic forces has helped increase this volatility.

Tim Draper, a U.S. based venture capital investor predicted that by 2022, Bitcoin’s price, traded at around $8,100 in 2018, is expected to reach $2,50,000. This forecasts that Bitcoin’s price would have to increase in price 30 times the number projected at present. Blockchain provides guaranteed peer-to-peer payment services in the world of financial services without intervention by third-party brokers. Blockchain also enables verified contributors to store, view, and share digital information in a secure environment that fosters trust, accountability, and business relationship transparency. Etherparty, a blockchain software platform, allows consumers to create a digital agreement with zero contract programming knowledge that can be enforced for all types of transactions.

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