What does the cryptocurrency boom have to do with small to medium enterprises?

The major attention on Bitcoin’s ever rising prices this week has probably got a lot of small businesses thinking about how they can get in on the action. Whether you like it or not, cryptocurrency is becoming a major topic of discussion for the main-stream. Bitcoin may well be a bubble but the blockchain technology that it utilises is here to stay. In the future, transactions using cryptocurrency can provide SMEs with lower fees and more security. For the service based industries, it could see the rise of smart-contracts, so you can pay your employees easier and get paid easier yourself.

Technological challenge

In one sense, the SME industry can suffer from a lack of technological competency and this can be a major impediment to accepting cryptocurrencies and utilising them for your business. This is becoming easier and easier with new wallets and ways to utilise the currencies. Yet, there are still some big risks including fake exchange websites and fake wallets. Without a decent understanding of the background of the cryptocurrency, it is hard to avoid falling into one of these traps and losing money.

Volatility

The volatility of cryptocurrency is one of the largest impediments to adoption by SMEs. For example, you could accept 0.1 bitcoins for a job today worth approximately $1,000. In the next three days, that 0.1 Bitcoins could be worth $700 or $1300. Most businesses need some level of liquidity and might sell at the wrong time. These volatility risks are an impediment to serious adoption by small to medium enterprises but some of the new more stable price cryptocurrencies could be the key to adoption. Alternatively, similar to cross currency risk, using providers of swaps between $ and bitcoin could be the solution (coming soon).

What do you think?

Have you considered accepting cryptocurrency in your business? Or have you successfully implemented it into your business? Let us know what you think!