Digital Assets

Accepting Digital Assets in Your Small Business

Most would agree that the Internet has drastically changed the global business landscape. It’s allowed businesses to expand their services and products into international markets. Grow their potential customer-base to one of a global scale. Information was free to be shared and consumed from nearly anywhere on earth with just the click of a button. But what about the global exchange of value? Why could we send a message halfway around the world instantly and for (nearly) no cost but when it came to exchanging things of value (i.e currencies/ payments) it would take days if not weeks to settle a transaction. Information could flow freely, in real-time and on a global scale, but when transacting with things of value, our financial markets lagged behind. This was due to the Internet’s inability to prove to an assets unique ‘digital scarcity’ in it’s online environment.

The Global Spread of the Internet

Nearly everything you see on the Internet is just a digital copy of the original, whether that’s a photo, an article, a comment, whatever. Information is free to be duplicated and copied and shared as many times as need be. That’s one of the reasons the Internet grew so quickly into what it is today. Allowing information to flow freely on a global scale allowed for an entirely new economy for businesses around the world.

Current Financial Markets

Likewise, it was important that our financial markets didn’t operate in the same manner. We needed to ensure the ‘digital scarcity’ of our financial assets, so we entrusted banks, brokerages and institutions to manage them for us. It was vitally important for any functional economy to maintain the accuracy of it’s businesses and citizens financial assets. Only the ‘right’ people were given access to updating the financial ledger, so as the money sitting in your online bank account couldn’t be duplicated or copied again and again like information can on the Internet. We had to rely on a long-line of powerful financial institutions to ensure the safety of our online assets. But sometimes these institutions would break that trust. Sometimes a bank would make some risky investments and lose their customers funds during a bank run. Or a central-government could act irresponsibly with their monetary policy and inflate their currency past it’s breaking point, effectively making the currency worthless as we see happening in Venezuela. Or a corrupt government unlawfully seizing a citizens financial assets. Or maybe a business lying about investments on their financial books.

Trust in Institutions

For most of the developed economies in the world, trust in institutions is something we take for granted. We expect that the money we deposit into our bank account will be there tomorrow when we go to withdraw it or spend it. I mean, why should we believe otherwise? They’ve done a pretty good job of protecting your money in the past. You know that unless something is catastrophically wrong in the system, your money will be there the next day when you need it. The problem is that sometimes things do go catastrophically wrong. Sometimes the institutions we trust make bad investments or irresponsible decisions. Sometimes there are bad actors.

Decentralize the System

Putting too much power and control into just a few focal points, in any system, has shown time and time again to jeopardize the integrity of the entire system. It works fine when all parties involved are making the ‘right’ decisions every time and are always acting responsibly, but the second a mistake is made or someone operates with malicious intention, the whole system is jeopardized. When only a few people and institutions have complete control of the financial ledger, it exposes the entire system to manipulation and bad actors. The exchanging of value-based assets needs to be more permissionless, global and borderless in order to keep up with the growth of the Internet. Our financial markets need to be open-sourced. Which is where digital assets enter the picture.

One Globally-Shared Ledger

The first natively-scarce, digital asset ever created was Bitcoin in 2009. All Bitcoin really was, was a breakthrough in computer science. A way to prove that your 1 bitcoin was scarce in it’s digital-only environment without having to rely on any third-parties to keep track of its movement. The tech behind bitcoin, called blockchain, shifted the control of the financial ledger. Instead of having to rely on your bank or institution to control the management and movement of your money, you would instead place your trust in the open-source Bitcoin blockchain. If you wanted to send your money to someone else in the world, you didn’t need any single person or institutions permission to do it. You simply would broadcast your transaction (i.e. sending Bob in Australia 1 bitcoin) to the bitcoin network and have 51% of the people/ powerful computers verifying the network that the transaction was fair and valid and that no parties involved were creating Bitcoin out of thin air.

The responsibility of updating the financial ledger was shifted from relying on your bank to relying on more than 50% of people on the Bitcoin network acting in both yours and their own best interests’. Through cleverly coded principles, the thousands of people (really supercomputers) opting to verify the authenticity of the open-source bitcoin blockchain were incentivized to maintain the network and all transactions done on its behalf. Anybody in the world could now suggest an update to the ledger, but only the transactions deemed ‘valid’ and just’ would be included in the next block. Once a block was created, your transaction would be ‘settled.’ On the Bitcoin blockchain, this would take an average of 10 minutes. 10 minutes to send something of monetary value to anyone on earth with access to the Internet, regardless of age, sex, ethnicity, social, political or economic status. A completely unbiased, near-instant and global method of value exchange for the digital age. Bitcoin was the first step towards ushering in the age of open-source finance.

Value Exchange 2.0

Bitcoin is as much of a social movement as it is a technological one. It was the first to challenge the idea that you needed to rely on the walled-garden databases of financial institutions and could instead open-source the database and have it’s control be put into the hands of the people. Much like how the Internet allowed for anyone on earth to consume and share information instantaneously with anyone else on earth, Bitcoin opened this idea up to financial markets. Now businesses and people could readily create their own digitally scarce assets and trade them on a global marketplace. Thousands upon thousands of these digital assets began to be created. Some represented tokenized shares of a companies equity to tokens granting access to certain platforms. Some digital assets took the form of crypto-collectables like CryptoKitties and others took the form of tokenized real-estate securities. Unfortunately, some were blatantly fraudulent as well.

A New Marketplace….

The whole point of the matter was that there was suddenly a new global marketplace of people and businesses trading financial assets that ONLY existed in a digital environment. Financial assets could now be created and flow peer-to-peer between individuals on a global scale without any control by third parties. Much like the Internet already was, financial markets were becoming global, borderless and open-sourced. The process of value exchange could now flow freely between individuals on a global scale, third party intermediaries not required.

As businesses constantly strive to keep pace in this increasingly online marketplace, digital assets serve as a unique opportunity for businesses willing to handle a certain level of calculated risk. For the first time since the Internet began, small businesses are able to accept payments on a global scale and have them settle near-instantly. No more having to wait days or weeks for a payment to settle in your bank account. No more outrageous fees to make international payments to your clients. With the creation of Bitcoin, money suddenly started to become ‘smart’ with the ability to program self-executing smart contracts into it. Money could suddenly flow through global markets in real-time and without the need for third-party intermediaries controlling it.

Adopt Digital Assets in Your Business Today

With the announcement of AT&T accepting Bitcoin payments to Facebook announcing the development of their own price-stable cryptocurrency, rumored to be called GlobalCoin, it’s only a matter of time before digital assets begin to weave their way into the fabric of the global economy. In fact, it’s already well underway in many markets around the world. The businesses that are the first to realize this global mega-trend will be the first to capitalize on this new and budding opportunity.

At the end of the day, adopting digital assets into your business allows you to maintain your lean business model, cut out costly middlemen/ gatekeepers, and access a global and borderless marketplace of value exchange for the Internet age. Acceptance of cryptocurrencies in your business may sound like a daunting proposition, but it’s actually much easier than you might think. At LifestyleOnCrypto.com we provide small businesses with consulting and payment solutions to help adopt digital assets into your business practice.

For more information, visit LifestyleOnCrypto.com or email admin@lifestyleoncrypto.com

Cameron GrandPre

Cameron GrandPre is a freelance writer focused on decentralized finance, cryptocurrencies and other fintech innovations. He's passionate about small business adoption of bitcoin and stablecoin assets, like Facebook's Libra project.

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