Cryptocurrencies may not be having a particularly good time, but the market has grown a lot in recent years and there is no doubt about that. Businesses that previously rejected the technology behind crypto are now gradually adopting it and most are looking at what they can do to harness its potential.
A growing number of businesses are already using cryptocurrencies for investment and operational purposes as well as trading. In fact, we are seeing more and more now adopting cross-border payments, NFTs purchases, decentralized finance (DeFi), etc.
In addition, TradFi platforms such as PayPal, VISA, and Mastercard have integrated crypto and its applications into their systems. Similarly, Tesla, Starbucks, McDonald’s, Balenciaga, Shopify, and thousands of others have entered the cryptocurrency space.
In reality, however, the… credit for the increasing mass adoption belongs to the intrinsic benefits of cryptocurrencies, which have pushed the market to be worth billions.
As Cryptonomist points out, a key trump card is the advantages it offers over traditional financial systems. The industry has created great financial and technological potential for the world, with one of the most important benefits being accessibility.
Cryptocurrencies have allowed small businesses to compete with large ones. They have created a market with a wide range of products, with a whole ecosystem of multiple tools based on cryptocurrencies.
The second benefit is DeFi services. Through DeFi, cryptocurrencies not only untie the hands of those without access to the banking system, but also create opportunities to bypass the established banking system. Even access to capital has become easy. Cryptocurrencies have made it possible to connect with experienced investors around the world who can help companies grow and “flourish”.
In addition, cryptocurrencies have made partnerships possible. The blockchain is constantly proving that it is about collaboration, not competition. And the best examples are most of the blockchains and dApps that have succeeded only through meaningful partnerships and not through competition.
These are just some of the advantages and there are many more, but there are also significant risks that cannot be ignored.
Volatility is the main risk factor associated with cryptocurrencies. Since their prices are determined by supply and demand, large price fluctuations can occur, affecting businesses that accept payments in cryptocurrencies. Even the irreversible nature of these transactions can have an impact on businesses because funds cannot be easily recovered.
In addition, the lack of government or regulatory support in some countries can make it difficult for businesses to embrace and manage cryptocurrency-related activity.
However, certain measures can be taken to reduce or eliminate these risks. The adoption of stablecoin to prevent instability, KYC/AML procedures so that the process can be monitored at all times, and regulation at the company level can help mitigate these risks.
Cryptocurrencies and their technology have already shown how they can transform businesses around the world. Moreover, the fact that companies like Tesla, MicroStrategy, and others are adopting cryptocurrencies is a clear sign that they are here to stay.
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