After years of banning and even prosecuting those who used or associated with cryptocurrencies, it appears that the world is now warming up to them. In June 2021, El Salvador became the first country to make a crypto, Bitcoin, a legal tender. Although the first, it is important to note that attempts to go crypto had been reported much earlier.
For example, almost all banks in Europe are working on some sort of proof-of-concepts in readiness to ingrain the blockchain technology into their operations. So, if you have a business, this can be an excellent time to go crypto, but what is the right way to do it?
A Closer Look at Cryptocurrencies: How Do They Work?
A cryptocurrency is a form of digital currency that is designed to reside and work only in the respective blockchain platform. A good example is BTC and ETH. Cryptocurrencies are created to provide users with a direct method of transferring value from one party to another. The essence of this is that the sender and recipient are able to operate on a peer-to-peer basis, helping to eliminate third-party parties such as banks.
When you initiate a transaction to send value in a blockchain, the transaction is picked by nodes spread on the respective network. These nodes can be miners in crypto networks such as Bitcoin that use proof-of-work (POW) algorithm or stakers for those that use proof-of-stake (POS) algorithm. The nodes confirm that the sender has enough crypto coins in the wallet and the receiving public address is available.
Once a node gets a chance and helps to confirm a transaction, a reward is issued from the transaction charges. However, some cryptocurrencies such as Bitcoin reward users with new coins and this is used as a method of releasing new coins into the market. This process not only affects the supply of Bitcoin but can also influence the BTC price. This is why the process is referred to as mining.
Some Useful Tips for Make Cryptocurrencies Work in Your System
There are a number of ways that you can use cryptocurrencies to enjoy high value for money. Even if your jurisdiction’s administration discourages cryptos, all you need to do is demonstrate accountability and confirm that every transaction is accounted for, especially when filing tax returns. So, here are some awesome tips to consider:
● Add It as Another Method of Payment
Although the benefits that come with cryptocurrencies are many, from faster transaction rates to lower costs of transactions, it will not be a good idea to shut down all other forms of payments. For example, although bank transfers are expensive, some people still prefer them, and they should not be blocked. So, only consider cryptos as an additional method of payment.
● Always Convert the Money to Fiat for Accountability if Local Administration Discourages them
One of the reasons why most central banks across the globe discourage cryptos is because they bypass the centralized organizations, especially those that are meant to help control inflation and deflation. They feel that there will be no accountability and governments might be unable to get the revenue they target. The best way to address this fear is to ensure that all transactions are captured in the books of accounts.
● Use DeFi platforms to get More From Cryptos
To help people and businesses going crypto to enjoy greater value, make sure to identify and work with an appropriate DeFi platform. These platforms are designed to work embedded on top of blockchain networks to extend the activities you can do with cryptos. For example, MantraDao allows users to get crypto loans and make more money through crypto staking.
If you have a business, it is time to consider going crypto because the world is adopting blockchain technology fast. Remember that you do not have to drop all other forms of payment to adopt cryptocurrencies. Instead, you can make it part of the payment methods for your firm.
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