Steemit Crypto Academy Contest / S2W2 – Cryptocurrency Adoption by @reporter-ann

Greetings friends
It’s another pleasure to participate in this week contest after missing previous week cause of unexpected challenges.

QUESTION: What is expected in the Contest

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

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

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

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

Discuss the Pros and Cons of cryptocurrency adoption by business owners.

Adoption of cryptocurrencies in the financial market

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The restrictions triggered by government of a country and third party (banks) on fiat currencies birth the idea of creating a means of payment that will eliminate the challenges encountered. This method of payment which is known as Bitcoin cryptocurrency was introduced in 2009 by Nakomoto Satoshi. An anonymous personal(ies).

Bitcoin cryptocurrency is a decentralized and digital currency that does not require a third party service. The term decentralized and digital implies that it is not controlled by anybody and can’t be touch. Although it is the first, Bitcoin is not the only cryptocurrency. Few years after it was launch, another cryptocurrency (Ethereum) was introduced and the number keep increasing. Since cryptocurrency method of payment was introduced, it adoptions in financial sector have increased. While some small and large scale businesses have accept it, others remain adamant irrespective of the fact that it boost business opportunities.

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The journey of using cryptocurrency in financial institutions began in 2014 when a Overstock, a popular online sale platform announced that it accept Bitcoin cryptocurrency as an alternative means of payment in addition to their gift cards etc. Less than a year, PayPal joined the race of accepting cryptocurrency and Microsoft followed on December 2014. Today, the massive adoption of cryptocurrency keep increasing. Companies such as Starbucks, Tesla andAT&T etc are among the top companies that accept it.

Cryptocurrencies have been officially legalized in some countries and this have give citizens privilege to trade their funds directly with banks or other financial institutions. El Salvador took the first step since last year and Central African Republic became the second. The American government have accept cryptocurrency but there is a strong law that guides it regulations thus, triggering a partial acceptance.

How businesses are boosted through cryptocurrency transactions

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Businesses that accepts cryptocurrencies have noticed a massive boost due to the advantages that cryptocurrency offers to it users.
Below are that list of them;
Anonymity: Every transactions done in the bank are known by a third party due to Know Your Customer Verification (KYC). Many people dislike this factor as such any business that accept cryptocurrency gain opportunity of rendering a service.

Cross-border transactions: In global era of e-commerce, third pay financial services have restrictions on international transaction. A user (sender or receiver) have to pass through some verification which is time consuming. Cryptocurrencies transaction can with just few clicks no matter the amount.

Less charge: The charge impose by banks on every transactions is a major turnoff compared with cryptocurrencies that charges less. This is another way that business can be boosted if cryptocurrencies is accepted.

Speed: Cryptocurrencies transaction speed is impeccable. A transaction is verified within few minutes or even seconds. Most time, banks delay their service for hours and even a day. Acceptance of cryptocurrency will boost the speed of a business as well.

My opinion on cryptocurrency been accepted globally for day-to-day transactions

The positive impact of accepting cryptocurrency payment in private sectors have yield an optimistic amount of decision that it will be a nice decision if it is globally accepted.

The speed of transactions in global markets will automatically increase. Business transactions will not wait for third party verification before a huge amount of transaction is carried out. Services that needs anonymity will be successfully carried out.

Everybody knows the profit made by holders of cryptocurrency during a bullish trend. Businesses that accept cryptocurrency will maintain a double win opportunity I.e both initial profits from their service and profit from uptrend.

The use of cryptocurrency have fasten awareness of blockchain technology experience among users. Global acceptance of cryptocurrency will build many user’s decision in developing their interest in tech service.

Why I think that high volatility of the crypto market is a concern to business owners

Bill Gate, the Microsoft CEO always criticize the dependence on cryptocurrencies because of it volatility. Other business moguls have fortify is criticism as well.

Cryptocurrency volatility simply means the instability of a cryptocurrency price. A situation that can make it increase in value or drastically reduce. This situation always occur when buyers are more that sellers and vise versa.

The dominance of buyers at a particular time resulting in an uptrend (A term used to describe increase in value). Downtrend is an inverse of uptrend. Which means sellers have dominate the market there by resulting in decrease in price. Although, a business can make much profit from uptrend after rendering a particular service, downtrend lost should never be disregard.

However, the volatility of cryptocurrency force programmers to create another type of cryptocurrency which is not less/not volatile. These s cryptocurrencies are regarded as Stable coins. A stable coin maintain the same value with US dollar e.g Tether (USDT), USD Coin (USDC) and TrueUSD (TUSD) etc.

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Over the pass 7 months, majority of cryptocurrencies (volatile cryptocurrency) are on a downtrend e.g Bitcoin and Steem etc. This have affect many businesses that accepted it without an immediate swapping of the cryptocurrency to a fiat currency or stable cryptocurrency. For instance, a service was rendered for 5Steems in my country (Nigeria) when a Steem was equivalent to N200 (two hundred naira). Today, the steem price is N110 (One hundred and ten naira). If the business owner did not swap the steem to a fiat currency or stable cryptocurrency, he/she will remain on loss till the value of steem increase to initial.

Mathematically:
1 steem = N200
5 steem X N200 = N1000
Due to downtrend, the current value of 1steem = N110
5steem X N110 = N550
Therefore; N1000 - N550 = N450
If the business owner wants to redraw his/her money today, there will be N450 loss.

Another typical example is selling of product when the value of 1BTC was equivalent with $40,000. Today, 1BTC equals $19,000. Therefore, the business owner will encounter $21,000 loss if it is withdraw.

screenshot taken from MetaTrader 4:
BTC broke my two support and continue a downtrend thereby reducing in price value from $20,000 to $19,000 within 24hrs. At this point any business that accepted BTC cryptocurrency without converting it to stable cryptocurrency immediately have encounter a loss.

Lastly, accepting a volatile cryptocurrency is risky in businesses. Either profit or loss can be encountered. So any business owner should be conscious of the cryptocurrency that is accepted. Any coin accepted should always be converted to Stable cryptocurrency (None volatile coin) immediately in order to avoid the risk of loss.

Other factors that are currently limiting the adoption of cryptocurrency and how it can be solved

Apart from the volatility of a cryptocurrencies, there are other major factors that limit it adoption which are;

• Illiteracy
• Government
• Environmental hazard
• Fraud
• Media

Illiteracy: Many people are still unaware of the existence of cryptocurrency means of payment as a result of their illiteracy. Others are graduates but less exposed to computers.

Educating people about the finances transaction service is a major step to eradicate this barrier.
Government: Cryptocurrency cut off a third party service of finance management and maintain anonymity. This is a trait that government have taken into serious consideration.
Recently, there was news that most terrorism are finance with cryptocurrency. In the year 2020 (between September and October), there was a strong protest between government of Nigeria and citizens. The government considered that the protests was financed through cryptocurrency payment and it was banned immediately till date.

Government should permit the use of cryptocurrencies but monitor it with a strong policy. This will allow banks to trade it with customers thereby increasing the awareness.

Media: The media have never relent efforts in spreading negative news about cryptocurrency. Ranging from loss of billions of dollars due to drastic volatility to scam news. This have create a pessimistic view of cryptocurrency technology in the mind of many people.

Media writer should not only hype it negative but also encourage people by telling them the proper measures to be taken in order to ensure a safe use.

Fraud: Maxim Yukabet is a famous Russian hacker that operates his millions dollars using service Monero. A top private cryptocurrency. Many other fraudsters are not left out in the race of cryptocurrency scam. This is a major impact that have chase many people away whenever they learn about it.

Environmental Hazard: Apart from creating an Antimatter, mining of cryptocurrency is another top electrical power consumer. Proof of work is a consensus mechanism that consume this energy and it unfortunate that top leading cryptocurrencies (e.g Btc and Monero etc) using it. Most National grid can not produce the needed electric power. As such, a private grid is always setup for this service. The emission of carbon dioxide into the atmosphere should not be underrated is another major concern by people.

Government should produce an isolated environment which is strictly meant for building of mining farms.

Advantages and disadvantages of cryptocurrency adoption by business owners

The adoption of cryptocurrency in business have both negative and positive effects on business.
Below is a brief discussion;

Advantages

Speed and cost effective: Validation of a single transaction in cryptocurrency is much faster and cheap than fait currency. Most time, sellers always refuse to release a commodity until the receive the payment. Fiat currency transaction will delay it but cryptocurrency will fasten it and still reduce the cost.

International transaction Stress free cross-borderlands business transaction is another advantage of cryptocurrency adoption by business owners.

Privacy: Many business service needs privacy. A business that does not use cryptocurrency will be left out but it adoption is a green light in the race.

Digital record: Most finance transactions usually raise a disagreement on record. Transactions done with cryptocurrency remains public and can not be edited.

Easy exchange: Swapping of cryptocurrency to any fiat currency is very easy compared to from one fiat to another.

Disadvantages

Volatility risk: The bullish trend of cryptocurrency is profitable to business, immediate downtrend can lead to loss.

Irreversibility: A slight mistake done during a transaction remains irreversible forever.

Computer literacy: A business personality that does not experience in cryptocurrency security and computer in general may be exposed to risk loosing funds.

Conclusion

Cryptocurrency is a nice alternative to fiat currency and should be accepted by government of every country. The government should work hand-in-hand with exchanges in order to prosecute suspected scammers immediately.

Since transaction are record in open source digital ledger that can’t be erase, business that adhere to using it are safe from transaction history manipulation. Lastly, it is proper for it users to be conscious for their password in order to avoid loss.
Volatility of cryptocurrency can collapse a business. Every business that accept cryptocurrency should ensure that the cryptocurrency is paired with a stable coin on their exchange wallet. This will help them to swap it immediately without any loss.

Thank you all for reading my contest.
Wishing everyone a lovely new week