With Bitcoin’s remarkable appreciation making headlines in the financial news, there are probably few people left who haven’t heard of cryptocurrency. What started as a niche experiment has escalated into one of the most compelling innovations in currency in the past two hundred years. It’s easy to see why. Bitcoin started 2017 at around only $1000, but as of mid-December its value had rocketed to over $16,000. ICOs are raising more startup funds than venture capital initiatives, and even Goldman Sachs is investigating ways to integrate cryptocurrency into its investment portfolio.
All of these growth statistics are interesting, but cryptocurrencies are intended to be more than a speculative market for forward-thinking investors. They are intended to advance online transactions and to facilitate business in new and meaningful ways, which begs the question: what can businesses really DO with cryptocurrencies? Are they actually a business solution or are they an over-valued asset enjoying a speculative bubble?
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It turns out that there’s a lot that businesses can do with cryptocurrencies, and they can begin integrating them into their business solutions in some simple but significant ways.
1. Accept payment in cryptocurrency
Online shopping is dominating the retail marketplace. In many ways, it is the dominant retail marketplace, and according to Fortune, “For the first time ever, shoppers are going to the web for most of their purchases.” Moreover, when shoppers make online purchases, they have a variety of payment options that could, but often don’t, include cryptocurrency. There are millions of cryptocurrency holders with money to spend, but few businesses accommodate this payment option. Some companies have even taken advantage of the cryptocurrency trend to further their businesses. Retailers are gradually increasing their embrace, with high profile moves by Overstock.com, Expedia, and even Shopify. In the same vein CryptoJewelry, a jeweler that specializes in creating unique pieces that currently carry the now-iconic bitcoin symbol, already accepts payments in bitcoin. There are plenty of resources available for businesses to easily integrate Bitcoin into their payment systems, and it’s an obvious opportunity to cater to an audience with an appreciating asset that they are ready to spend.
2. Differentiate revenue streams
Cryptocurrencies have significantly increased in value this year. The crypto market appreciated more than 1200 percent in 2017. Companies that accept cryptocurrencies as payment will be acquiring an asset that is, at least at the current moment, continuing to appreciate in value. Overstock.com, a major online retailer that accepts payment in Bitcoin, is embracing this strategy by retaining half of their Bitcoin payments as investments. Of course, there is no guarantee that cryptocurrency prices will continue to rise, but a strategic approach to crypto-investment can help businesses differentiate revenue streams while simultaneously catering to consumer buying preferences.
3. Acquire and safely store customer information
Data is king, and companies are clamoring for customer information. However, the ways that companies go about acquiring consumer data is often invasive, and already negative consumer attitudes are exacerbated when personal data is compromised through a security breach—something which is happening with disturbing regularity. By developing a blockchain token for customer data, businesses can acquire valuable information and, more importantly, they can safely secure that information by housing it on the blockchain. Further Network, a travel-related startup looking to expedite booking and travel, is already taking advantage of this informational capacity. The company users a Smart Travel Record which holds key information about users’ travel data including flights, hotels, and other reservations. This simplifies travel and makes it easier and more transparent to understand travel costs. This is a win-win for consumers and businesses, and companies that incorporate this concept first will distinguish themselves from the competition.
4. Develop a Loyalty Program
Research and consulting firm Deloitte identifies customer loyalty programs as a ready target for blockchain disruption. It’s widely understood that customer loyalty programs are one of the most effective ways to connect with and retain customers, and a blockchain token could help companies do this more effectively. Businesses can operate their loyalty programs more cheaply and securely while also offering compelling real-time benefits and expanded opportunities, for example linking loyalty programs to create one centralized interface, and allowing immediate rewards. Effectively integrating cryptocurrency into your business can mean much more than simply expanding the range of payment options. It creates a dynamic relationship between businesses and customers, and that’s good for everyone.
5. Utilize Smart Contracts
There’s something old fashioned and heartwarming in a deal that’s made on a handshake, but that level of trust can be misplaced in the modern age. The smart contract offers significant benefits over traditional contracts. Businesses that include cryptocurrencies have the opportunity to integrate smart contracts into their workflows, which means that agreements and stipulations can be determined at the onset of a contract, and the powerful computer language will automatically release funds as stipulations are met. For example, Cool Cousin—a travel platform that connects travelers to locals—operates by creating smart contracts between users that allow for them to exchange local travel information for the company’s tokens.
This is the age of the sharing economy, the independent digital nomad, and the online marketplace—cryptocurrency-enabled smart contracts are a way for businesses to thrive in the complex, twenty-first century economy.
This article first appeared on MediaFeed.org.
Featured Image Credit: Marc Bruxelle / iStock.