The Benefits of Cryptocurrency and Blockchain for Businesses

Cryptocurrency and blockchain have become popular buzzwords in the last few years, but do you actually know what they mean? To understand these terms fully, they have to be considered together.

Cryptocurrency is, at its simplest, an entry into a database that can’t be altered. Like traditional money, the value of cryptocurrency isn’t inherent to the actual ‘coin’, but rather, is based on the agreed value given to a transaction between two parties. Bitcoin is by far the most well known cryptocurrency, and the graphic below offers a straightforward explanation of how it works:

The ledger for cryptocurrencies such as Bitcoin depends on blockchain technology. A blockchain is a digital ledger of transactions managed via a decentralised network. Before a new block can be created, the network of participants, knows as ‘miners’, must verify the transaction. This lack of a centralised managing entity makes blockchain very hard to hack. The guide below offers a more in-depth explanation of blockchain technology:

Businesses that accept cryptocurrency as payment could benefit from faster transactions, lower fees, fraud reduction and easier international transfers. Aside from managing cryptocurrency, blockchain technology has significant potential for other applications, and could be used by businesses to manage and protect any valuable form of data, such as public records, contracts or identity documents.

For more information on how these technologies work and the ways they could benefit your business, take a look at the full article from Sage.