October 21, 2017
Unless you've been living under a rock for the past several months, you will have noticed the massive increase in attention, demand, and volatility in the world of cryptocurrency.
While many people are jumping into digital currencies like Bitcoin, and trying to make money off a quick trade, the business of accepting and paying with digital currency is on the rise. However, with such volatility in this space, one might wonder how they can successfully run a business when accepting digital currencies when it's price can heavily fluctuate in a short period of time.
One of the most popular and shared stories on such a topic is the guy who paid for a pizza in Bitcoin back in 2010. If he had saved those Bitcoin instead of buying that pizza, today they would be worth roughly $20 million.
This is a rare scenario and one that doesn't happen as often today, as individuals and businesses who now accept Bitcoin and other cryptocurrencies as a form of payment have since realized how to make such transactions legitimate and make sense for both sides of the party. However, the true value of digital currency is still up in the air.
Today we are going to highlight a few examples on what's working best in the crazy world of cryptocurrency and how businesses are trying to figure out how to best use it.
Start with a Credit Card, End with a Crypto Coin
While Bitcoin and Ethereum are two of the most popular and volatile cryptocurrencies on the market today, new crypto coins are being created every day. It's not just about adding a new cryptocurrency to the market, it's also about having more control in the process.
A perfect example of this can be seen with the online peer-to-peer marketplace, CanYa, which has recently gone through the process of releasing it’s own digital currency in the process. With both buyers and sellers on their platform, there needs to be a level playing field for how much money is going in and out at all times. At the same time, with digital currency now being more in demand, online marketplaces and businesses aren’t just accepting Bitcoin or Ethereum, they are actually coming out with coins of their own as well.
In the case of CanYa, when someone joins their network they can pay with a credit card which will then be transferred into CanYa Coins — which then again can be transferred to any other payment method of choice when making a withdrawal. This method and process are in place through a hedged escrow contract solution, which helps eliminate fluctuation in daily action and volatility in cryptocurrency price.
How to Put a Price on a Digital Currency
For digital currency to have its place in the world and for more businesses and customers to implement it into their daily lives, they also need to have an understanding of what it's actually worth. This is something that is still up in the air, as the value in Bitcoin and other cryptocurrencies are changing daily based on demand and it's volatile tech environment.
In a recent article by Christopher Georgen, he discusses the many important factors of cryptocurrency pricing and what elements and factors come into play. As noted in his article, Christopher says:
“To put it bluntly, in order for cryptocurrencies to achieve broader adoption, they must be at least as good as those currencies against which they are competing.”
To back up this statement, he also gives examples of how this can be done:
- Medium of Exchange – A community uses beaver pelts as a medium to trade for other goods.
- Unit of Account – Housing prices in Japan can be compared using the yen as a unit of account.
- Store of Value – An ounce of gold could buy a toga in Roman times, yet it can still buy a nice suit today.
As you can see, there have been many forms of currency over history — all of which have fluctuated in value over time. The difference is that there was a perceived value for each at its time. The same is currently in the works with cryptocurrencies as well.
More Stability as More Players Adapt Crypto
One of the best ways we can continue to see less volatility in the world of digital currency is with the adoption of more businesses and individuals using it. While finding merchants and brands who accept Bitcoin or other cryptocurrencies is still rare, it’s a number that is continuing to grow on a daily basis. As more businesses continue to move into the space, digital currencies will become more commonplace as a form of global payments. We can look back to an article in Bitcoin Magazine from 2014, in which they said:
“Like any currency, insufficient market demand could render such a system unstable. If enough people want to sell, the price will have to fall. It might be ideal to program the currency to maintain slight deflation, to make for a safer alternative investment to other cryptocurrencies.”
With this in mind, here we are in 2017 and adaptation towards cryptocurrency has significantly been on the rise since 2014. It's no longer a question of if market demand will accept this form of payment, it's simply a matter of how fast and how soon it will happen globally.
Cryptocurrencies Are Here to Stay
Even with all of the volatility in the cryptocurrency market today, it's safe to say that it's technology and influence in the world of business and transactions is here to stay.
As more individuals and businesses continue to adapt with these changing times, cryptocurrency and digital payments will soon become a part of our everyday lives. With each element and pricing factor coming together more daily, we will start to see less volatility in this space while seeing more activity in usage in the process. The only question left remaining, is how your business and brand will adapt to these changes?
Read more about the future of cryptocurrency at TechCo
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