Why Do Institutions Believe in the Long-Term Use Cases and Ambition of Crypto?
We’re looking at why some of the biggest companies and governments in the world are embracing crypto and why you should consider it too.
More and more businesses and governments are embracing the concept of cryptocurrency. The list of countries, for example, with a national digital currency includes India, China, Singapore, and Jamaica. When it comes to businesses that are investing in cryptocurrency, the list could go on forever, but it includes juggernauts like Tesla, Microsoft, Amazon, and Google. According to data on Binance, Bitcoin price has reached over $28,300 and only continues to grow. If ever there was a time to embrace cryptocurrency, it is now.
But why? What is the appeal of crypto to these businesses? We’re looking at why some of the biggest companies and governments in the world are embracing crypto and why you should consider it too.
The main selling point of cryptocurrency is its decentralised nature. Whether you simply don’t trust the banks or you don’t like the market, the fact that there is no big organisation hidden behind red tape and “expertise” is a selling point to a lot of businesses. It’s made cryptocurrency a lot more accessible to people beyond the fintech industry and gained rapid growth because of this. Beyond the benefits that this can offer businesses, including cheaper transactional fees and an immunity to inflation.
One of the biggest benefits to everyone: citizen or buyer, business, or government, is cryptocurrency’s security features. These include end-to-end encryption so that no one can infiltrate your transaction, which is a common practice. It means you can use cryptocurrency anywhere, including public Wi-Fi, which is where a lot of hacking goes down.
Additionally, every transaction is final, and if you were to refund someone their money, it would take another transaction. This ensures that everyone gets what they are expecting without “a problem” interrupting the transaction. Again, this can be a hacker, but it’s just as likely to be a customer or seller cancelling the transaction even when having received or used the item sold, which is a common occurrence of payment fraud, but with crypto transactions being almost instantaneous, there is no chance of that occurring.
Additionally, the blockchain that cryptocurrency is built on has allowed for a lot of fintech advancements, including NFTs to ensure authenticity, but also smart contracts. Smart contracts are unbreakable contracts that use data to ensure that the limits of the contract have played out before any money swaps hands. So, for instance, if you were to buy software, the contract would ensure that the software was downloaded to your computer before the money was automatically transferred to the seller. This protects both the buyer and seller who might be worried about getting scammed out of money on the internet.
Digital currency is sending society well on the road to the cashless society concept. Physical currency is already dropping significantly, so it might as well be a cryptocurrency. A lot of experts agree that that is on the horizon. With Apple Pay coming out of your phone or even your watch, it’s easy and fast to pay for everything.
However, the digital currency doesn’t have the benefits of cryptocurrency, including the automatic paper trail, end-to-end encryption, and fast transactions. Customers will come and go at lightning speeds, no longer blocked by payment methods that take 3-5 working days to go through or don’t suit their needs. Cryptocurrency, on the other hand, will send all transactions near-instantaneously. Additionally, you will gain some loyalty and trust for offering more modern payment options as an institution.
Businesses big and small will be pleased to know that with cryptocurrency, there is less chance of transactional fees eating away at their profits. Institutions are pushing for more cryptocurrency acceptance in industries because currently, traditional debit and credit card transactions are charging an average of $0.25 plus 2 per cent to 4 per cent of the value of the transaction. That means that a $10 transaction can take as much as $0.29, which can build up over various transactions.
On the other hand, cryptocurrency transaction fees are still less than 1 per cent due to its decentralised nature, allowing businesses to gain from profits.
It’s becoming more mainstream
Maybe the most compelling reason for institutes to embrace cryptocurrency is that there is a demand for it. The iGaming industry has proven that people who have cryptocurrency to spend are ready to spend it, and governments like China and India have turned entire countries on to digital currencies, saving governments tax money. If the people want to use it and the governments want to use it, the businesses need only get on board with the benefits to them.
As a result, businesses can better infiltrate markets that have embraced cryptocurrency wholeheartedly. Due to the more secure and cheaper nature of crypto, a lot of markets would prefer to trade in it, so Western companies have more incentive to have it as an option.
Even with the growing pains that cryptocurrency has been going through over the past few years, crypto is thriving. This is because the benefits far outweigh the scamming that might occur online. If you are smart with your investments, do the research into the chosen coin and spend wisely, you’ll incur only the same risks you would with stocks and far more benefits.