Business in the Age of Cryptocurrency - Answers To The Questions You Need To Know
What is blockchain technology and how can it help my business?
Blockchains are essentially global digital databases that rely on distributed consensus to maintain their state. You can think of distributed consensus as everyone voting on what is true and what is not.
For example, when someone spends some bitcoin a transaction is recorded. Everyone is notified and everyone “votes” on it’s veracity (in this case, whether or not they agree that the spender has sufficient bitcoin for the transaction). Once enough people vote the result is recorded and it can never be changed.
So a blockchain is about public trust and audibility. Many businesses can benefit from this, from stock markets, to energy trading companies, to transport logistics companies. Really any enterprise that has an interest in unforgeable audibility and public trust.
How can I use cryptocurrencies like bitcoin for my business?
Bitcoin is a tradable currency and as such is used as a denomination of value. In fact, any cryptocurrency can do this, which is why there are so many. Every cryptocurrency denotes some kind of tradable expression of value, just like the real money that we (sometimes!) use today.
The process of applying a cryptocurrency to something of value is often called “tokenisation”. To put that another way, people can trade tokens in place of a real service or commodity. There are companies that allow trading of energy contracts, bonds, shares, and land rights, just to name a few.
And so if your company has something of value that can be traded you could use cryptocurrency (a.k.a. tokens) to achieve just that!
How can I integrate cryptocurrency to my business?
Typically companies will either use an existing cryptocurrency, like ether on the Ethereum blockchain, or create their own. Each has its own advantages and disadvantages.
Using an existing cryptocurrency is often to simplest option. However, it does not provide complete control and the price of the currency is set by a broad and open market that is not necessarily motivated by the same goals as your business. Creating your own currency is a bit more difficult (but not much more!) and gives you complete control over its availability and (to a fair degree) it’s price. In this case you’ll also need to consider listing your currency on an exchange.
How can I change cryptocurrency for fiat currency (for example, bitcoin to Australian dollars)?
This is super simple - you just need to find a cryptocurrency exchange! For Australian dollars, NCX (https://trade.ncx.com.au) is a great option and it also supports Ethereum and Litecoin.
It’s a simple matter of signing up, verifying your identity, and then you can get right into trading!
How do I take payments in cryptocurrency?
The first thing that you have to decide is which cryptocurrency/cryptocurrencies you would like to take payments in. Once you’ve decided you’ll need to find a payments provider that supports the currencies that you are interested in. These providers will help you set up the right wallets (to receive payments to) as well as provide services to notify you of payments.
Be aware that different cryptocurrencies have different processing times so consult with your provider to make sure that the ones that you choose match your business’s requirements!