How Small Businesses Can Start to Use and Benefit From Blockchains
Mostlay people have only the slightest understanding of what blockchain truly is, and inevitably associate it with Bitcoin. While that is partially true (and partially not), it is the simplest way to understand block chain – as the technology that Bitcoin (and other crypto currencies) is based on.
The good news is that as a small business owner, you don’t need to fully understand the technological basis of block chains in order to use and benefit from them. In particular, there are 2 ways in which you should be thinking about starting to use block chain as part of your business already:
Accepting cryptocurrency payments
Although Bitcoin was the original cryptocurrency there are others out there, and accepting payments from these currencies is the logical first step for a small business to start to use blockchains. The benefits of accepting crypto currency payments are clear cut, as they are irreversible (so no charge backs), have much smaller transaction fees, and have a global reach.
That being said the one challenge in accepting cryptocurrency payments is the fluctuation in their value. To address that you will want to adjust your prices based on the exchange rate on a day to day basis, but when it comes to keeping a revenue in cryptocurrencies it may pose a significant risk.
Raising capital for a small business
While it may not be that widespread yet, raising capital using cryptocurrencies through crowdfunding and other methods shares the same overall benefits as they are irreversible, have low transaction fees, and are global in nature. However as an added benefit, blockchains also allow for smart contracts that are linked to transactions and executed automatically – but that is still a much more recent development.
In the short term it is unlikely that blockchains will replace traditional methods or raising capital or even bank or buddy loans – but eventually it is likely they will due to their secure nature.
If you haven’t already considered utilizing blockchain currencies – you should have a good idea where to start now. As the popularity of these currencies increase, the real question you should ask yourself is whether you really want to be left behind and risk losing out on potential business by not accepting payments.
Similarly as smart contracts begin to be more widespread it is expected that they will be used in a number of different areas outside of raising capital as well. In the near future smart contracts could very well be the basis upon which escrow transactions are handled, and may begin to be even more relevant to small businesses and their supply chains.
All said and done blockchain and fintech solutions that are based on it are growing and expanding daily, and while you may not be able to stay on top of them it is essential that you consider their implications and how you can use them in your small business. After all at the end of the day it is better to be ahead of the curve than behind it.