Can entrepreneurs trade in cryptocurrency – why the digital currency maybe vital for today’s entrepreneurs.
What is cryptocurrency?
Cryptocurrency is a digital currency in which the transactions are verified and records are maintained by a decentralized system using cryptography, rather than by a centralized authority.
The whole idea behind cryptocurrency is that it is digital based and not subject to any centralised control ie Central Bank of a country or other regulators.
It can be used to pay for goods and services online. Cryptocurrencies work using a technology called blockchain, which is a decentralized system of computers that manage and record the transactions.
Cryptocurrency therefore are considered a safer method than currency.
What benefits can it give entrepreneurs?
For entrepreneurs trade in cryptocurrency, it may can give you the benefit of expanding your business by enabling you to accept payment and pay using cryptocurrency.
But firstly, regulator approval is vital.
In Sri Lanka, currently there is no Central Bank authorisation for the use of cryptocurrency.
Cryptocurrency can be used successfully by entrepreneurs – already, many businesses globally are accepting and trading in cryptocurrency.
What are cryptocurrency forms ?
The most popular crypto is the Bitcoin.
Bitcoin is a digital currency with which you can pay online. It is known as a cryptocurrency since cryptography facilitates its creation and transactions.
There are others known as Litecoin, Ethereum, Ripple and Stellar – and many others as well.
While each form of cryptocurrency can differ, they all serve a common purpose – of facilitating an alternate form of payments, one that is tech based.
What are the downsides of cryptocurrency?
While cryptocurrency can act like real money, it is not physical and is not governed by any regulatory body – hence, there could be problems related to fraud and misappropriation.
Yet as the world’s tech platforms grow, cryptocurrency is gaining more and more validation in making it an acceptable form of payment – good news for entrepreneurs who can expand their businesses by using cryptocurrency.
Yet while the cryptos themselves are hard to crack since they are formed using encrypted computers which means they cannot be hacked, their usage maybe in the hands of fraudulent organisations or individuals.
How do you trade in cryptocurrency ?
You can either buy it or exchange it with on a virtual cryptocurrency exchange.
Already, some businesses based online are paying their contributors in Bitcoin.
There are also miners who actually mine the cryptocurrency – they are tech savvy investors who create or in parlance, mine the cryptocurrency – a bit like the initial investors of the gold rush.
Mining cryptocurrency is a tough game, reserved for the investors with a lot of financial clout. It also requires a long term vision on the benefits such investments would bring.
The road forward with crypto –
For now, it is exciting and engaging – as the world becomes more and more tech oriented and actual cash usage maybe reduced, cryptocurrency may grow in usage and circulation – which would indeed open doors for entrepreneurs.
Currently, cryptocurrency is mostly viewed as an investment – since the supply is limited, the value is high. But of course, that may change in the future.
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