Cryptocurrencies like Bitcoin and the Ethereum network allow small businesses to interact with these networks in ways they never could before. Bitcoin perks are a boon for small businesses that are unable to raise capital from the traditional banking system due to lower revenue from their business.
However, business owners can also read articles online and learn about bitcoin volatility as it could influence their decisions.
Small businesses suffer the most from the rules and regulations of the traditional banking system and that is why Bitcoin is the best alternative as a banking system for these small businesses. Bitcoin perks in small businesses can help them improve their productivity, efficiency, and capital lockup potential. Let’s explore all the benefits and offerings of Bitcoin for small businesses.
The problem with the financial system
The problem with traditional finance is that the distribution of wealth is much more connected and unequal than it needs to be. For example, most of this country’s wealth resides in a small percentage of the population (the top 1%), and part of this wealthiest segment includes about 200 families.
Not only that, traditional finance is still based on the same debt system that has existed for over 450 years. The general model is that financial institutions lend money to individuals and small businesses, and those who borrow pay it back with interest.
It’s a scenario that creates long-term debt for many small businesses (80% of America’s businesses are small businesses). This can result in owners not creating more jobs or growing the business because they are too busy servicing their loans. This trend is leading to a generation of workers who are not fully participating in the economy and who lack innovation.
The use cases for the new financial system
Bitcoin and Ethereum allow these companies to collaborate with other companies in ways that were unthinkable just a few years ago. The two networks allow small businesses to create their financial instruments that are unique and different from any other system. These new building blocks enable small businesses to react quickly to market changes, deploy large amounts of capital, and manage risk in impossible ways.
Now let’s look at how this new model can benefit small business owners.
No more politics
The decentralized nature of these networks means that no single group can hold all of the power. As a result, bad actors cannot create intentionally designed problems with their industry or their country.
Because these systems allow small business owners to get money easily and quickly, they can be instantly up to date with global market changes. Additionally, they can create unique business processes not possible with traditional finance, making it easier for small businesses to innovate.
Today’s traditional financial system is inaccessible to many people as they lack access to banks or basic financial accounts. These decentralized systems allow any person or small business to access financial tools that were previously unavailable to them. These platforms then allow them to build businesses and grow at a pace they never could.
Lowering the cost of doing business
The new financial system makes it possible to eliminate third-party transactions, which can be expensive for small businesses. At the same time, it allows small businesses to significantly increase their sales and profit margins. This direct relationship with customers also allows for more trust between both parties.
This new system can significantly reduce bureaucracy costs by reducing paperwork and allowing faster processing time for money transfers. In addition, it is a great benefit for small businesses as they have fewer resources than large corporations and banks.
Save time for owners
While banks and large companies take money from companies and pay them to open a separate account, traditional financing does not allow small businesses to use the money earned. As a result, small business owners can lose time with delays unrelated to their core business.
The decentralized nature of these new platforms allows people with no financial or investment background to work as financial advisors and build successful businesses. It also means that people of all levels of experience can offer professional advice without any special qualifications, other than being willing to learn and use the tools that these networks provide.
Cryptocurrencies like Bitcoin and Ethereum enable small businesses to do things that were previously unavailable to them. The decentralized nature of these platforms, for example, allows people with no financial or investment experience to work as financial advisors, which will be a great advantage for small businesses in the future.
At the same time, it will allow more people with different skills and experiences to use these platforms to build successful businesses.