As online money continues its march into the mainstream, should you invest in a crypto-only business?
Since it was established in 2009, cryptocurrency has taken the financial world by storm. Recognised as a reputable form of currency worldwide, there are no barriers when it comes to buying, investing and paying for goods in crypto.
Due to there being no centralised governance of the crypto market, it’s usually available to trade 24/7, and there’s no risk of it being frozen on legal grounds. The transaction fees are generally lower and, on top of this, crypto is secure, increasing protection from identity theft.
If you’re new to crypto and want to learn the basics before you dive in feet first, keep on reading, and you’ll soon be ready to begin your crypto journey.
Why should you invest in cryptocurrency?
Digital gold is a fitting way to describe cryptocurrency. Both gold and crypto are independent of governments. Despite volatile tendencies, they’re proven to retain their monetary value, and unlike fiat money or ‘legal tender’ money, digital money and gold can’t depreciate due to inflation. There’s no risk of it being frozen or withdrawn on legal grounds, making crypto a great investment idea.
Bitcoin is arguably the most successful and well-known decentralised digital currency, and just like gold, bitcoin is scarce and can’t easily be regenerated. Once it’s gone, it’s gone. There are other similarities, too, between bitcoin and gold:
• Both are hard to fake – in fact, gold can’t be faked. Something may look like gold, but when it’s checked by the experts, purity can be verified. Similarly, bitcoin can’t be duplicated.
• They’re both divisible. bitcoin can be divided up into satoshis, with 100,000,000 satoshis making up 1 BTC (bitcoin). Gold can be melted down into smaller chunks, but less precisely, so bitcoin has the upper hand here.
• It’s rare – bitcoin is as rare as gold. There are only 21 million bitcoins available, and similarly, there is only a finite amount of gold that can be mined until it runs out.
Both digital gold and gold is mined, but the process of mining digital gold is much more difficult. Bitcoin is mined using sophisticated hardware to solve complex mathematical problems and release new currency into circulation. The first computer or device to solve the puzzle is awarded a block of bitcoins. Mining is for the technically and mathematically gifted so, before you invest your time and money into buying the right software and devices for mining bitcoin, it’s best to evaluate whether you’re right for the job.
More benefits of crypto
Inflation plays a major role in how bitcoin is more beneficial than standard money. Inflation causes the value of fiat money to decrease over time, but this is not the case for cryptocurrencies. Bitcoin is cheaper for many transactions compared to traditional payment methods and, as it stands, bitcoin’s inflation rate is already or will shortly be well below the historic average inflation rate of the US dollar. Bitcoin is also hugely secure through the process of cryptography, which means the cryptocurrency can only be accessed and used by owners of bitcoin.
Cryptography sends encrypted messages which are only received and known to the intended participants. Bitcoin doesn’t directly use hidden messages, but the ‘cryptic’ part is utilised in the digital signatures and private keys formed when buying crypto. The recipient will obviously need to know the encryption methodology to decode their encrypted messages and access their crypto, making it a secure currency.
Cryptocurrency, as we know, is not controlled by banks or governments, and it’s truly transnational. So, when it comes to paying for our goods online, who’s accepting bitcoin as a payment method? Well, after some initial trepidation, many top companies have started to embrace the cryptocurrency trend. The likes of Etsy, Domino’s, Subway, PayPal, Rakuten and BMW are now accepting bitcoin, and there are even online holiday companies that are accepting BTC for those sunny getaways.
Want to own a business with no cash?
‘Cashless’ businesses are growing in popularity and can open up a whole new demographic to your traditional customer base. It’s is also a great PR story, gaining your business the spotlight it needs to cut through the noise and competition.
As we know, there are drawbacks to any method of purchasing online, but with crypto, you’re guaranteed a more secure currency – something hugely important to online customers.
Businesses will, of course, need to assess the potential drawbacks of operating crypto-only, such as alienating cash customers and the maintenance that comes with it, before embarking on their venture.
Invest in a sustainable franchise
If you’re super keen on starting a crypto-only business but apprehensive about the potential drawbacks, the franchise route is an ideal solution. Franchises are proof that the business model works. Therefore, you can start to build your business knowing that there’s a market that wants your services. You can then concentrate on nailing the crypto side.
Franchises are generally sold to individuals as a ready-to-go option, with a website and all the branding needed to launch. If you’re buying a franchise from a crypto-only company, you’ll already have the cryptocurrency licence needed to start training.
Crypto isn’t something that can be learned overnight. With various new currencies popping up, there’s a lot to get to grips with, but it’s a trend that shows no sign of a weakening. With determination and a great entrepreneurial attitude, there’s no reason why you won’t succeed with crypto, whether that’s buying it to trade, or setting up your own crypto-only business.
Rune Sovndahl is a Danish entrepreneur, co-founder and CEO of Fantastic Services, a domestic and commercial service company in London, UK.