About a decade ago, not many people knew what cryptocurrency was. Terms like blockchain and Initial Coin Offering (ICO) were quite alien to the masses. Instead, traders and crypto enthusiasts currently know every detail about digital assets, including where to buy Bitcoin and other altcoins. And because we now live in a world where plenty of technology surrounds us, digitalization is a business imperative, and this is why startups are embracing digital coins as an instrument of innovation and growth. Here are the advantages that could potentially come about when mixing cryptocurrency and startups.
Access to global markets
One unique thing about crypto is that it has no barriers and borders regarding who can use it or in which part of the globe it can be utilized. With the help of crypto, businesses can gain access to an international customer base without dealing with other foreign fees or currency exchange rates. Working with crypto is far easier today than it used to be years ago. Still, you must ensure your operations comply with the law in the region where you are doing transactions. Also, remember that some countries, like China, have not welcomed digital assets, while others are crypto-friendly, like Malta and El Salvador.
Reduced transaction expenses
Sometimes, it can be much easier and cheaper for an organization to pay their vendors, suppliers, and employees with crypto instead of using traditional payment alternatives like wire transfers and credit cards. This happens because the transaction fees associated with digital assets are lower than those with other methods. Plus, as blockchain technology is improving each day and becoming increasingly sophisticated, there are expected to appear further reductions in the costs of crypto transactions. This is one of the main reasons why startups should opt for crypto as the main form of paying.
Protection against inflation
Fiat money is prone to inflation, which might cause business holdings to lose value over time. However, because cryptocurrencies are decentralized assets that the government or a central bank does not control, they do not suffer from inflation. This is why many startups have considered holding crypto as an investment rather than traditional money.
Raising capital
Crypto has changed the traditional methods used by early-stage enterprises. With the help of Initial Coin Offering (ICO), businesses can raise money more efficiently from a vast pool of investors in a less time-consuming way. Moreover, now enterprises can issue shares as tokens, and trade them immediately. In this way, they will bring much liquidity to the entry-level businesses.
This new and improved way of raising capital for startups has transformed the world, and offered the possibility to technical minds to create a company in a time-efficient way. A good example of this is Vitalik Buterin, a Canadian teenager who raised money for its project, Ethereum, by holding an Initial Coin Offering of Ether. His idea was successful, and now Ethereum is the second-world digital coin by market cap. Vitalik wanted to create something that would overcome the shortcomings of Bitcoin, and it did that by raising $18 million for his project.
Investing in future
Crypto opened the doors for numerous entrepreneurs. Previously, only venture capitalists and private investors had access to the brightest technological advancements. But now, with the help of cryptocurrencies, anyone around the globe has access to a new gateway. Furthermore, people can benefit from a revolutionary technology that allows young companies and retail investors to profit by investing in successful, high-growth companies.
Anonymity
If a business doesn’t want its financial dealings to be known to the public, then crypto is the best answer. Transactions with digital assets are made with the help of blockchain, which records them in a public ledger, but the details of the person who made the transaction are unknown. Blockchain is also great for a company’s security, as it will prevent the information in case of theft or a data breach.
Still, companies must continue using the best practices for cyber defense, like two-factor authentication, strong passwords, and software updates to keep vulnerabilities at bay.
Access to the blockchain technology
Blockchain is providing companies with the possibility to create improved business models within a decentralized scenario. Now, startups can add value to their everyday operations with the help of this technology, which is revolutionizing the world of businesses. Blockchain brings plenty of advantages for companies. For example, Ethereum allows people and entrepreneurs to benefit from several revolutionary applications without fees involved, and in this way, they will have a cost-effective method to create further improvements.
Potential for growth
Crypto is still a quite new phenomenon, so it is expected to continue to grow in value in the future. Investing in digital assets can be a great way to make a company more successful, especially if cryptocurrencies are used as long-term investments. Even if virtual coins are volatile, and their price could fluctuate, there is a high chance that they will recover and experience a new high.
Better transparency
Transactions with cryptocurrencies are characterized by openness and trustworthiness. A blockchain is a public ledger where transactions are made across numerous computers. This is why a malicious actor can’t change or alter the information of a block.
Also, blockchain contains smart contracts that create self-executing agreements when the conditions specified are met, thus strengthening the trust. The transactions are more efficient, as the agreements are automatic and transparent, and there are no intermediaries. This could help startups to detect or prevent any misapprehensions and business disputes at an early stage.
Concluding thoughts
Although cryptocurrencies are highly volatile, they are still worth considering for those companies that want to expand their operations and increase profits. Digital assets bring advantages to both consumers and businesses, including better security, increased chance for growth, and access to larger markets.