What exactly is cryptocurrency and why should businesses care?
Cryptocurrency is simply a digital form of currency. It’s global form of currency as well in that it’s not specific to any country (as of yet).
There are various different types of cryptocurrency – the main one being Bitcoin. Bitcoin is not only the most dominant cryptocurrency, but it was the first one created, and has the first-mover advantage as a result.
Cryptocurrency uses blockchain technology. Now this may sound complicated, but the basic premise is quite simple. It’s essentially a network of different computers that all share the same ledger/document and are able to keep track of all transactions and movements the cryptocurrency. The benefit of this is that there are multiple different parties that all can confirm the transactions, it’s not just coming from one party. This ensures the transactions are valid and people can’t just make them up.
Now why should businesses care about cryptocurrency? As its adoption rate increases, there may be impacts that we are seeing in the work world:
- The use of the blockchain technology will allow many business functions to improve. The technology now isn’t only being used for currency, but can also be used for operational efficiencies. Some crypto organizations are developing blockchain technology for supply and logistics solutions, securities, confirmation of employee records, and so forth.
- Employees may begin to request or desire payment in the form of cryptocurrency from their employers
- Businesses may be buying or selling products/services with cryptocurrency
- There may be a competitive advantage to using cryptocurrency compared to competitors
- Employers can offer compensation using cryptocurrency in their Job Listings
Additionally, it is important to know that cryptocurrency is taxable just like any other currency. As well, further government regulations will likely arise as crypto grows.
Cryptocurrency is currently in its infancy. It is quite undeveloped and much of it is based off speculation. However, its utility and benefits is undeniable and we are very likely to only see more of it in the future.
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