Welcome to Part 3 in a series of articles on Cryptocurrency in Business. In the first article we discussed cryptocurrency basics and in the second article we talked about Blockchain, the engine that drives cryptocurrencies. In this article we’ll look at potential business applications for cryptocurrencies and blockchain.
Blockchain will change the business world!
As I’ve delved into the crypto world in preparing these articles, I discovered something surprising to me, which so often occurs when you get into the detail of things. Beyond our assumptions and perceptions, the deeper truth is often revealed when we explore and educate ourselves. For me, the light-bulb discovery was that blockchain is more important than crypto and in fact is the bigger issue that we need to be aware of in business.
Blockchain is the critical underlying platform and distributed ledger technology that has far-reaching implications for business. Cryptocurrencies are simply one of many possible applications of blockchain technology.
In Article 2 we covered the basics of blockchain and some potential applications. It’s important for you in your business to develop an understanding of blockchain and how you might apply blockchain technology to your business to drive revenue, cut costs or improve efficiency.
Even in these early days of blockchain development, there are a number of first movers in the marketplace who are driving the uptake of blockchain in business, by providing blockchain solutions that take care of the ‘heavy lifting’. Big players such as Microsoft, IBM, Oracle, Hewlett-Packard and SAP are already dipping their toe in the blockchain waters. The development of ‘blockchain-as-a-service’ aims to simplify the development of blockchain applications for businesses, allowing them to focus on the important things such as outcomes, performance and the user-experience rather than the nuts and bolts of getting the technology to work.
New players in the blockchain space are working on specific industry blockchains, which take the technology and application to another level by providing blockchain solutions that consider specific issues associated with particular industries and already include elements, tools and applications that are suited to that particular industry.
The benefits of blockchain solutions such as security, speed, audit, traceability and efficiency along with smart contracts that can trigger automatically upon completion of binding terms and conditions mean that blockchain has far-reaching implications across a range of industry sectors. Identifying the opportunities that blockchain brings for your industry and your business is an important activity that could bring great benefits to your business in the future.
An important role that cryptocurrencies can play in your business is around payment options, i.e. what payment options you might provide in your business so that your customers can deal with you in the currency of their choice. Crypto payment options are a significant topic all on their own and will be covered in the upcoming Article 4 in this series.
The other potentially important consideration of crypto in business is that of currency hedging. The enormous range of different cryptos available and the wild fluctuations of their value represent a highly volatile environment where fortunes can be made and lost in a very short timeframe. If you do decide to hold crypto assets in your business, make sure you are protected with some form of currency hedge that can maintain value if one of your cryptos goes the wrong way. Knowing the crypto market and watching it carefully for significant price movements is critical.
Right now, I find that when I discuss cryptocurrencies with people, it is very common to see a screwed-up face and a look of serious concern. Upon further discussion, it is commonly revealed that the underlying reason for such a strong negative response to cryptos is simply a lack of understanding of this new technology. This fear of the unknown prevents engagement with an important new development in the world of business, which could have a detrimental impact on the future of your business.
Education, as always, is the key. Knowledge leads first to awareness, then to understanding, engagement, and finally to application, which can lead on to driving greater success in your business. Learning about blockchain and cryptocurrencies is the first step in this process.