Around 2010, a mysterious programmer (or group of programmers) known only under the pseudonym "Satoshi Nakamoto" invented what is now called "Bitcoin". This virtual currency exists on a technological platform called blockchain, which is essentially a system that allows files and data to exist without risk of copying or counterfeiting.
Bitcoin (BTC) has hit record highs lately, with a menagerie of competing coins and tokens, including Ethereum (ETH) and Litecoin (LTC). Businesses around the world have started accepting cryptocurrency as a means of payment, and they have even begun to pay their employees in digital currencies.
All this is compounded by the fact that the blockchain technology on which these coins and tokens exist is perhaps even more valuable than the coins themselves, promising to revolutionize the world of finance and security at the same time. 39; future.
So how does a small company navigate this confused world full of pieces, blocks, coins and chains? Will cryptocurrency and blockchain technology have an impact on your small business, or is it just a bubble – a fashion that will burst?
Here are four reasons why bitcoin and blockchain might affect your small business, and how to manage it if it's the case.
1. This is the future of money
At one point, Jamie Dimon, CEO of JP Morgan Chase, described Bitcoin as "fraud", similar to the "tulip mania" bubble of the 1600s. Earlier this year, he reversed his position, saying at Fox Business that he regretted making these comments.
"The blockchain is real," said Dimon in a CNBC report. "You can have yen cryptodollars and stuff like that … ICOs … you have to look at each one individually Bitcoin has always been to me what governments will feel about bitcoin when it gets really big."
JP Morgan Chase, in fact announced that he was going to start using a blockchain-based system to conduct global banking, cementing the reversal of Dimon's opinion with the prospect of a global financial crisis. hard and cold money. Interestingly, the problem with the future of cryptocurrency has to do with exactly what Dimon mentioned: how governments feel it.
Since cryptocurrencies are treated as a form of digital property, any appreciation of that asset must be taxed as a capital gain. The problem is that, even though Bitcoin has seen gains of over 1000% since the beginning of 2017 until the end, almost no one reports its holdings to the IRS with analyst Tom Leet estimating that US households owes $ 25 billion in taxes on crypto.
So it may be a matter of time before you decide to start accepting cryptocurrency – but it is also possible that if you talk about it early, you may encounter tax laws no matter what the reason is. State and country of your business. Make sure you study the laws in your area unless you want to be audited by the IRS. Follow these tips to make sure you are not there.
2. This is also the future of technology
As JP Morgan Chase has shown, whatever your feelings about BTC and crypto-currency in general, the technology is undeniable. The idea of smart contracts has begun to gain popularity and CoinDesk has a fantastic explanation of how they work:
"While a standard contract describes the terms of a relationship (usually enforceable by law), a smart contract imposes a relationship with cryptographic code … In other words, smart contracts are programs that run exactly as they are configured by their creators. "
Ethereum was created so that developers could create applications using these smart contracts, creating a whole new world of technological possibilities. Some of these developers have moved away from the ETH project and formed organizations that have begun to study real-world solutions and use blockchain-based cases. Skycoin is only one of these organizations.
Skycoin and the Skywire network aim to fight for and maintain net neutrality. From a Skycoin post on Medium:
"How does Skywire work? Think of it as a decentralized Internet service provider." Skywire uses blockchain technology to create a peer-to-peer community-driven market for Internet service. </ P> <p> It's fast, private The best of all, it puts the user first. "
These types of solutions are perfect for small businesses, since a repeal of network neutrality would probably be detrimental for entrepreneurs. It's unclear if this type of solution will work or not, but you can bet that your small business will use the blockchain and applications that work in a few years.
3. Criminal Activity and Malware
While Bitcoin and cryptocurrency titles have dominated flows in the past two years, not all have been positive. Criminals have started using cryptocurrencies for their harmful practices, due to the anonymity involved when they are sent or received.
Among the worst types of malware in recent years, ransomware is at the top of the list. The WannaCry ransomware incident in 2017 infected more than 200,000 computers in 150 countries. These types of viruses have the potential to stop business and even shut down entire industries.
What is a ransomware? Panda Security's experts paint an image of sensational precision:
"When you scroll through your social media feed, a window appears:" Your hard drive has been encrypted. You have 48 hours to pay $ 200 or your data will be destroyed. You see a link and instructions to "pay in Bitcoin. An ominous timer counts down the seconds and minutes for the two-day window. Nine, eight, seven … "
There is no way to recover your data (or operations) unless you have a full backup of your entire system. You must know in advance that these are threats to make sure that you are protected against them; according to Stephen Robert Morse, editor for Smallbiz Ahead, a senior tenant in business income protection.
"" The first step … is to determine where potential threats can occur, "he writes." Natural disasters, power outages, theft and vandalism are possibilities. Prosecution and data breaches also pose a significant threat to businesses today. "
Do not let cybercriminals get the best of you and protect you from malware and data breaches before it's too late.
4. Bursting of bubbles
While many indicators may suggest that blockchain and cryptocurrency are the technology and currency of the future and all this, it is extremely important to remember that nothing is frozen for the first time. moment. If you are a small business that plans to accept BTC or other crypto payments, for example, it can be difficult to calculate costs, taxes, and transaction fees with such market volatility. – and that's the last reason you could be affected by this new wave of technology.
Because bitcoins and tokens have not necessarily reached widespread circulation, they are currently considered speculative. A large number of alternative parts (parts other than Bitcoin) should disappear in the coming years. As such, it is important to be extremely careful with the funds and investments in this space. Some have claimed that BTC prices are high because they are in a bubble. It remains to be seen.
The fact is that it is still too early to say exactly what will happen in the world of crypto. One thing is certain: just like the Internet boom in the 1990s, the crypto-boom is in full effect. There were winners and losers at the end of this boom – but everyone is using the internet today. We will all use the blockchain in the future. Those who learn to operate sooner, rather than later, will see the best results.