What crypto adoption means for traditional companies and for you
As the cryptocurrency space continues to grow, many traditional businesses are adopting crypto. Here's how a few major industries are using Bitcoin and similar ideas to improve or remake existing business models.
Key takeaways
- Crypto makes banking more efficient, enables new businesses to get started, and helps businesses of all sizes find and keep customers.
- These innovations encourage democratic practices throughout the economy and aren't slowing down.
Banking
Most banks use the SWIFT system to process international money and security transfers. But this system struggles with huge transaction volumes and problems automating, so cross-border transfers can take up to 6 days. Fees and currency conversions also mean a simple transfer can cost €45 or more.
Bitcoin transactions, however, are usually done in about an hour and with much lower transaction fees—the current average is €0.82. Higher speeds and lower costs are obviously attractive to banks and customers, so many large institutions are working on blockchain-based transfers.
Tech
Tech startups are key to many countries' economic strategies. These typically require lots of funding to get started and to keep growing, yet since 2022 heavyweight investors have been more cautious with their money. This makes it harder for founders and their employees to operate successfully.
Initial coin offerings (ICOs) provide an innovative way for companies to raise capital by selling tokens that represent parts of their business. It’s somewhat like crowdfunding but on the blockchain. However, while some ICOs have led to successful projects, they are inherently risky. Many ICOs have performed poorly, and some have even turned out to be outright scams. Additionally, ICOs often involve complex legal considerations and may be classified as security offerings that need registration. Always thoroughly research any ICO before getting involved to minimize risks.
Retail
Small and medium businesses around the world accept Bitcoin as payment from customers; Coinmap.org lists over 32,000 locations, from hotels to tattoo parlors. Major players accept Bitcoin too—you may even be reading this on one of their operating systems.
For businesses large and small, accepting crypto is a way to reach new demographics and to build loyalty among tech-savvy, forward-thinking customers.
Impact
Incorporating crypto into traditional businesses opens up more of the global economy to more people. Cheaper banking allows the average person to keep more of their money, reduces the unbanked population, and helps people like migrant workers support their families more effectively. New fundraising methods help big ideas take flight, permit growing businesses to hire more employees, and enable more diverse communities to support causes they believe in. Crypto as a payment method allows markets to thrive and expand.
Future outlook
In addition to the improvements outlined above, activities like the approval of Bitcoin ETFs indicate a bright future for Bitcoin among institutions. The success of Bitcoin as legal tender in places like El Salvador proves Bitcoin's allure at the individual level too, to say nothing of the alternative ways blockchain tech can be used apart from finance. There's no reason to doubt that Bitcoin will be anything but a bigger part of everyday life from now on.
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