Steemit Crypto Academy Contest / S2W2 – Cryptocurrency Adoption by @chimzycash

Discuss the adoption of cryptocurrency in the financial market and how businesses can be boosted through cryptocurrency transactions

One of the main reasons why cryptocurrency was created is to serve as a digital currency to solve some of the problems of the conventional currency. However, cryptocurrency technology has grown above just being a digital currency and payment solution, it benefits has broaden and has much wider use cases. Even though cryptocurrency and its technology is still in its early years, it has achieved a lot of growth and adoption in various industries and sectors, most especially in the financial sector.

The number of cryptocurrency users continues to expand and increase globally as seen on the stats and the high number of cryptocurrency transactions and holders which has led to an increase in the overall market capitalization of the cryptocurrency market. Since its invention and introduction, the cryptocurrency market capitalization has risen to over 3 trillion in 2021 and even with the current bear market, the overall cryptocurrency market capitalization is over 900 billion and soon heading to cross over 1 trillion market capitalization again.

With this increasing numbers and positive statistics of the cryptocurrency market, there is no doubt why more and more businesses are beginning to adopt cryptocurrency as blockchain technology and cryptocurrency and shown to be one of the fastest growing technologies and innovations. The main reasons why cryptocurrency has achieved so much growth since its invention and introduction is the benefits it provides compared to the fiat currencies and the conventional financial systems.

Businesses who have already adopted cryptocurrency are taking advantage of the benefits cryptocurrency provides to increase growth, expand their reach and skyrocket their business. The main area which businesses have shown to adopt cryptocurrency is through accepting cryptocurrency payments and utilizing cryptocurrencies for sending and receiving cryptocurrency transactions.

How businesses can be boosted by cryptocurrency

Improved payment system - We all know that the centralized and conventional financial system is flawed and also there are so many issues that might arise when it comes to making or receiving successful payments. This can greatly affect the business sales negatively and can also lead to losses in the business. Cryptocurrencies solves these problems and provides improved payment system for businesses to ensure successful sending and receiving of payments in less time without any problems.

Increased speed of operation through faster transactions - Businesses can benefit from the speed and faster transactions cryptocurrency provides to increase speed of their operation. The conventional financial system can be a very slow process that can lead to slow operational speed due to different factors such as network failures, server downtimes, number of third parties involved for a transaction to go through etc. These negative factors can affect business operations such as slow payments and not being able to receive payments which can affect sales and also cost the business money.

However, with cryptocurrency, these problems are solved as it ensures faster transactions and allows the sending and receiving of payments anywhere in the world faster and in less time. Some cryptocurrency transactions takes seconds to complete, making it such a powerful innovation for businesses who aims to send and receive payments anywhere in the world faster and simplify the process.

Cost reduction - This is also another area businesses can benefit from cryptocurrency and be boosted through cryptocurrency transactions. Businesses can greatly cut down cost in their operations just by adopting cryptocurrencies. We all know how expensive it can be to send fiat transactions to different parts of the world, even payment solutions such as paypal and payoneer can charge almost 3% in fees for transactions. These charges add up to the cost. With cryptocurrency, the cost is reduced greatly as some cryptocurrencies take a very small transaction fees and some don’t even have fees at all. These makes cryptocurrencies a great solution to reduce cost for businesses.

Full control of funds - With cryptocurrencies, business owners can have full control of their funds. One of the downsides of the centralized and conventional financial system is that the business money is still in the custody of the banks or central financial institutions. They can decide to freeze the business account for minor offences without any warning, or the banks can suffer from bankruptcy, leading to huge loss of funds. Also, the government might have certain policies and regulations that might affect the funds controlled by the centralized financial institutions. With cryptocurrency, the business owner has full control of the business funds and can make his/her decisions without any interference of any third party or centralized entities.

Security - This is one of the main benefits of cryptocurrencies and why businesses can benefit from it. Cryptocurrency transactions are secure as it runs on the blockchain. This means that transactions are protected by cryptographic mechanisms and encryptions that ensures secure transactions and also transaction cannot be altered or hacked which can lead to loss of funds. This can be of great benefit for businesses as they can be rest assured that the transactions are carried out in the business are secure.

Easy automations - The power of automations in business can never be underestimated. When it comes to boosting a business to the next level, automations is very important. This allows businesses to make money without any human input. While automations is still possible with the available technologies using the conventional financial system, it is still not 100%, as withdrawals needs to be made manually.

Also certain regulations can cause a stop in the automation process, or the automation process can be slowed down due to third party interference or downtimes or problems in the centralized financial entities. However, with cryptocurrencies, the whole process from start to the funds landing in the business wallets can be fully automated without any human input or fear of downtimes or third party interference. This becomes very powerful for businesses when it comes increasing sales and attracting customers in any parts of the world.

What is your opinion on cryptocurrency being accepted globally for our day-to-day transactions.

In my opinion, it is a good thing as anyone can have access to cryptocurrencies. One of the main reasons why cryptocurrencies was created is to bring solutions to the problems that is common in the conventional financial system. Cryptocurrency being accepted globally solves a lot of problems, most especially problems that comes when it comes to sending money from one country to another or foreign exchange.

With cryptocurrency being accepted globally, the power will be in the hands of the people as there will not be any centralized entity or authority that have the control. Also, it means that anyone can make transactions anywhere in the world. This is one of the problems of the conventional currencies as each country have their own currency and you have to think about currency exchange and the different exchange rate before any transactions can be made. With cryptocurrency being accepted globally, this problem is solved. This greatly benefits business owners who travel a lot for business transactions.

The benefits of cryptocurrencies being accepted globally goes beyond solving the problem of foreign exchange, it also provides indirect solutions in different aspects of life. People can make faster payments for medical treatments anywhere in the world in few second. This can go a long way in saving lives, also, can help get things done quickly without any drawbacks or limits.

Cryptocurrency being accepted globally means that anyone can have access to cryptocurrency. In this present time, not everyone can have access to a bank account or can make certain payments due to age restrictions or country regulations. With cryptocurrency, this problems are eliminated as anyone can make use of cryptocurrencies for any type of day to day transactions. Anyone can travel to any country of their choice and spend their funds freely with full control of their cryptocurrencies.

Do you think the high volatile nature of the crypto market is a concern to business owners? Discuss.

Yes, without a doubt that the high volatility of the cryptocurrency market it is a big concern for business owners and one of the main reasons why some business owners are hesitant in adopting cryptocurrencies in their business. Volatility in the cryptocurrency space is mostly caused by a variety of factors such as negative sentiments in the market, demand and supply. One of the main reasons why I think that the high volatility of the cryptocurrency market is a big concern for business owners is in the area of sending and receiving payments. When a customer pays for any products or services with a particular cryptocurrency, there is a huge possibility that the dollar value might drop when the payment is made.

Since cryptocurrency isn’t globally accepted yet and hasn’t gained full adoption yet, this becomes a problem for business owners who want to convert the received cryptocurrency to fiat currency for other offline transactions. Same applies to business owners who want to make purchases with cryptocurrency. Since the payment is determined by the current dollar value, it would mean that more units of the cryptocurrency would have to be sent to compensate for the lost value in dollars. Business owners who have received a lot of funds via cryptocurrency would be negatively affected when the market is down as the overall dollar value of their cryptocurrency holdings will be drastically decreased.

What other factors are currently limiting the adoption of cryptocurrency and how can this be solved?

Problem: Irreversibility of Transactions - Not being able to reverse cryptocurrency transactions is not necessarily a bad thing, however, it has also shown to have its downsides. One of the main downsides thing feature causes is not being able to reverse transactions sent to the wrong address due to human error or mistakes. This can cause a business to lose a lot money. Imagine a situation where a business owner mistakenly sends over $100k dollars worth of crypto to the wrong address due to careless mistake by the receiver emailing a wrong or incomplete address.

Solution: - To solve this problem, blockchains should have a mechanism in that stops cryptocurrencies sending to an incomplete address. When a user sends a cryptocurrency to an incomplete address, the transaction should bounce back or not go through. Also, blockchains should have a mechanism that allows users to set up usernames to their corresponding cryptocurrency addresses in order to reduce the chances of sending cryptocurrencies to the wrong address.

Problem: High price volatility - This is one of the major problems associated with cryptocurrency and one of the major concerns for business owners. The high volatility of cryptocurrencies simply means that the cryptocurrency market experiences up and down price movements frequently and this makes it possible for cryptocurrencies to lose its dollar value in a short space of time. For business owners, this is not an ideal situation especially when it comes to receiving payments via cryptocurrencies. Imagine a situation where a business owner receives payment for a product or service via cryptocurrency and in few hours, the cryptocurrency crashes in dollar value, causing a loss based on the dollar value. This loss could be temporary or permanent depending on the cryptocurrency.

Solution: - To solve this problem of high price volatility of the cryptocurrency market, there need to be a good balance of supply and demand in the market. This means that solutions need to be in place to help keep the balance of supply and demand healthy. Also, pegging cryptocurrencies to something in the real world is another way of reducing volatility. The stable coins is a good example of that as they are pegged to the US dollars in a 1:1 ratio. This means that 1 stable coin pegged to the USD will always be close to 1 USD. With this, it will make it easier to gain more adoption as people will be more confident that the value of their cryptocurrency will not drastically drop in value without any real world cause.

Problem: Government regulations - This is without a doubt one of the main reasons as to why cryptocurrency adoption is limited. Certain countries have regulations that prevents its citizens from making use of cryptocurrencies to make certain type of transactions. Also, there are certain countries that have banned cryptocurrencies entirely and forbids its citizens from having any association with cryptocurrencies. This regulations adds to the reasons limiting cryptocurrency adoption.

Solution: - cryptocurrency should be seen as a type of currency that provides a lot of benefits to its users. Government regulations or bans implemented that are limiting cryptocurrency adoption in these countries should be removed to allow citizens to freely transact with cryptocurrencies. If this regulations are lifted in favor of cryptocurrency, the rate of adoption will increase greatly.

Problem: Negative sentiments on social media - This is one of the main reasons why cryptocurrency adoption has slow. Social media is a great tool to communicate and share information. However, social media has somehow become a very toxic place where people posts hates, troll and try to bring down good things by spreading false or negative news around. With active social media users increasing rapidly, this becomes a huge drawback for cryptocurrencies as new users will be discouraged and turned off by the negative posts, comments or news seen on social media.

Solution: - To solve this problem, social media platforms needs to implement a solution that limits the rise of bots, spam accounts and hateful and negative comments on their platform. It is very rare for a user with real name on social media to spread negative news or troll. So if these bots, spam accounts or troll accounts are stopped, it will go a long way in solving the problem of negativity around cryptocurrencies.

Problem: Requires some level of technical skills to fully understand how to make use of it - Blockchain and cryptocurrency in its present state requires some level of technical skills and knowledge to fully understand how it works and how to make use of it. From installing the right wallets, understanding how to buy and sell on exchanges, to staking, pools, understanding how to set fees for optimal use case, understanding how the market works, and more. These is not easy for a total newbie. Anyone who in the crypto space will testify the learning curve involved in understanding cryptocurrencies and how to properly make use of it. It takes some time to fully understand. This is why some persons are not interested or not ready to learn any new thing. The technicality involved in cryptocurrencies is one of the reasons that is limiting cryptocurrency adoption.

Solution: - The solution to this is to make cryptocurrency very easy that even a total beginner would understand how it works and how to use it properly. Reducing the technicality starts with proving very simple user interfaces for anything relating to cryptocurrencies, like wallets, applications etc. Also, there should be a lot of well thought out easy to learn materials and learning videos on blogs, and platforms like youtube that can help onboard new users. At the moment, there are not enough high quality materials out there to teach new users cryptocurrency, how it works and how to properly make use of it.

Discuss the Pros and Cons of cryptocurrency adoption by business owners

Pros

Reducing extra charges for customers - Because of the low transaction fees of certain cryptocurrencies, business owners can reduce the extra charges for their products or services. Because of the high fees that can be involved when it processing transactions, some business owners include these charges in their products or services, thereby increasing the overall cost of the product or services.

No transaction limits - We all know that there are always limits involved when it comes to sending fiat currencies via the conventional financial system. This limits can be problematic for business owners who want to perform high volume transactions. Also, business owners can lose sales if a customer is not able to make payments due to daily transaction limit reached. With cryptocurrencies, there is nothing like transaction limits as any amount can be transferred from one wallet to another.

Reduced cost of transaction for customers - The cost of transaction will be greatly reduced when making use of cryptocurrencies to make payments. We all know how expensive it can be to make payments using the traditional financial system. There are fees involved when doing fiat money transfers especially when it comes to sending money from one country to other using traditional methods. With cryptocurrency as a payment solution, customers can make payments anywhere in the world at a much reduced cost.

Healthy liquidity - if all businesses adopt cryptocurrencies, it would have a positive impact on the cryptocurrency market in general as customers would be need to acquire the cryptocurrency to make payments for products or services. This means that there will always be liquidity in the market from buyers and sellers.

Faster transaction speed - Business owners and customer can enjoy faster transaction speed when using cryptocurrencies as a payment solution. Certain cryptocurrency take few seconds to complete and some are even instant. This reduces the wait time it takes to process transactions for both the business owner and the customer.

No server downtime or Uninterrupted payments - because cryptocurrency lives on the blockchain, there is nothing like server downtimes or interrupted payments due to network or power failure. This would greatly benefit business owners and customers as failed transactions can prove costly. With cryptocurrencies, any payments made with cryptocurrencies is assured to go through successfully.

Cons

High Price volatility might lead incur loss - Business owners who accept cryptocurrencies as a payment solution might experience losses in dollar value, if the cryptocurrency market enters a bad bear market or massive dip.

Transactions can be seen by anyone - Since one of the features of blockchain is transparency and cryptocurrency runs on the blockchain, this can be a problem for business owners as transactions made by the business is visible for anyone to have access to on the blockchain.

Loss of keys results to loss of funds - If a business owner losses his/her keys to the wallet, all the funds in that wallet is gone forever and cannot be recovered. This can be a devastating thing to happen to any business owner.

Loss of funds from human mistake - Humans are bound to make mistakes. If a business owner can sends money to a wrong address due to mistake the money is lost and gone forever and cannot be recovered. Also, the mistake can come from the receiver who sends a wrong address or an incomplete address.