The development of blockchain and related technologies has allowed us to rethink the concept of mutual payments between different businesses and take a fresh look at such a phenomenon as money within the financial system. The active introduction of the technology of payment for goods and services using crypto in the infrastructure of companies, along with numerous benefits, brought us a number of problems, which is worth thinking about. For example, where and how to store digital coins and how to withdraw them.
This article will shed some light on what role crypto plays in business today, what are the storage and withdrawals of crypto that your business can use, and what benefits your business can have using digital assets.
What Role Does Crypto Play in Business Today?
The primary reason for the creation of cryptocurrencies and their purpose is that by eliminating the need for an intermediary, it supports an infrastructure in which strangers can do business with one another. This is accomplished by transferring the crucial record-keeping function from centralized financial institutions to a network of autonomous computers that form a distributed system of trust not under the control of any single institution. At their core, cryptocurrencies are built on the idea of a decentralized and universal ledger, open for public use and constantly monitored by high-performance computers that function independently of one another.
By eliminating intermediaries along with their commissions, cryptocurrency reduces the cost of doing business and also prevents the corruption that exists in intermediary structures. Having at its core an innovative technology of distributed registries, cryptocurrency opens up new opportunities for payments, reduces transaction fees, increases the speed of data transfer to accept crypto payments, and ensures anonymity and security. However, the potential of this technology as a means of maintaining transparency and control extends far beyond the business sphere, as it is capable of eliminating any intermediaries in financial transactions. At its core, this technology is a form of social organization capable of transferring control of money flows and information from powerful elites to ordinary people, allowing them to regain the right to freely dispose of their financial assets.
Ways to Store and Withdraw Crypto for Your Business
There is no doubt that blockchain technology and related crypto-assets are of enormous importance for the financial system today, allowing businesses to benefit from this tool, which has a wide range of different benefits. At the same time, before integrating cryptocurrency payments into your business, you need to think about how to hold crypto assets and how to withdraw them. Let’s take a look at the most common options.
- Hot Wallets
One of the most popular ways to store cryptocurrencies in the business environment is hot wallets. This is an online wallet that is part of the interface on a company’s website. In fact, it is very similar to cryptocurrency wallets for brokers or cryptocurrency wallets for exchanges, where you can find common features in functionality. It is called “hot” because it is instantly accessible from any device with Internet access. Starting it is as easy as registering on any website, and you only need a username and password to get started. For example, any registration on a cryptocurrency exchange automatically creates a hot wallet and accounts to which money comes in or is debited from. It’s a quick, easy, and transparent way to do business. However, it is not recommended to keep large amounts of money in hot wallets because their level of security is questionable. Such wallets often become objects of hacking and even DDOS-attacks. As a consequence, this can lead to you losing your money or losing access to it for a long time.
The biggest advantage of hot wallets is their convenience. Your public and private keys are stored and encrypted in the appropriate app or wallet site, so if they are not restricted to a specific device, you can access them anywhere you have an Internet connection. This ease of access makes crypto wallets for businesses with high payment volumes and ideal choice.
- Cold Wallets
Cold wallets are designed to store your digital keys on a piece of hardware or a piece of paper offline. Typically, hardware wallets are in the form of USB flash drives, which are connected to your computer and can be used for fintech transactions. When you utilize a “paper” wallet, your keys can be accessed by scanning QR codes printed on a piece of paper or engraved on a metal surface.
The purpose of cold storage wallets is to make them difficult to crack. Hackers will not be able to gain access to the keys of a wallet unless the wallet owner is caught in some sort of phishing attack. To gain access to your cryptocurrency using a hardware wallet, a thief would first have to gain access to the USB drive that contains the password, and then guess the password somehow.
This high level of security can lead to mistakes on the part of wallet owners. If you lose your USB drive or piece of paper and don’t save your private key somewhere, you will effectively lose access to your finances. Compared to hot wallets, which allow you to restore access with an initial phrase, restoring access to a cold wallet is impossible in most cases because of the two-key security ecosystem.
Benefits of Using Crypto in Your Business
Cryptocurrency technology provides invaluable assistance to the business sector in an attempt to improve payment processes, speed up transactions and take customer relationships to the next level. Below is a list of the main benefits that your business can gain by working with crypto payments.
- Low Commissions
Payment services operating on the market charge a certain fee for processing transactions. These fees can sometimes be as high as tens of percent. With cryptocurrency, these fees are almost zero, which is a big advantage, especially for small companies.
- No Intermediary Organizations
When dealing with cryptocurrencies, you can forget about intermediaries represented by banks and other financial structures forever. The main idea of cryptocurrencies is decentralization, which means that neither banks nor the government have control over them. You can see every transaction in the blockchain as well as all the information about it.
Cryptocurrency payments are made quickly. Since intermediary banks are no longer needed, the time for each transaction is significantly reduced. In addition, the speed of the transaction can be accelerated by offering a higher fee.
Today, cryptocurrency occupies a special place not only in the business environment, but also in the entire financial system of many countries. Acting as an engine of economic progress, cryptocurrency provides indisputable support to any kind of business due to speed, convenience, increased security and full transparency of financial transactions, which certainly encourages more companies to use this technology for mutual settlements with both individuals and legal entities.