Articles

(Written on 8th February 2025)

Mr, Vishal Nanda

When I asked Chatgbt this question, then this is the standard answer I got:


“
Businesses may use crypto assets for several reasons, depending on their goals and operations. Some common reasons include:

1. **Faster and Cheaper Transactions**: Crypto transactions can be completed quickly and often with lower fees compared to traditional payment methods, especially for international payments, which usually take longer and incur higher fees with banks.

2. **Access to Global Markets**: Cryptocurrencies are not tied to specific countries or financial institutions, allowing businesses to access international markets without dealing with exchange rates or the complications of foreign banking systems.

3. **Decentralization**: Cryptocurrencies operate on decentralized networks, reducing reliance on centralized financial institutions. This can appeal to businesses seeking autonomy or to avoid issues like bank failures or inflation in certain regions.

4. **Innovation and Competitive Edge**: Adopting crypto can signal that a company is innovative and forward-thinking, potentially attracting tech-savvy customers and investors. It can also provide a competitive edge in industries exploring blockchain technology and decentralized finance (DeFi).

5. **Store of Value and Hedge Against Inflation**: Some businesses view certain cryptocurrencies (like Bitcoin) as a store of value or a hedge against inflation, particularly in economies with unstable currencies.

6. **Enhanced Privacy and Security**: Crypto transactions can offer a higher degree of privacy compared to traditional payment methods. Additionally, blockchain technology, which underpins many cryptocurrencies, is known for its strong security features.

7. **Access to New Investment Opportunities**: Companies may choose to invest in crypto assets as a way to diversify their portfolios, taking advantage of the potential for significant returns or using crypto assets in emerging financial products (like staking or DeFi protocols).

8. **Smart Contracts and Automation**: Cryptocurrencies like Ethereum allow businesses to create smart contracts—self-executing contracts with predefined conditions—automating processes like payments, transactions, and even governance without intermediaries.

9. **Customer Demand and Payment Options**: Some businesses adopt crypto to meet growing customer demand for more flexible payment options, particularly as crypto adoption rises globally.

10. **Fundraising (Initial Coin Offerings or Tokenization)**: Businesses, especially startups, may use crypto for fundraising through ICOs (Initial Coin Offerings) or tokenization, where they issue their own digital tokens to raise capital.

While there are benefits, businesses must also consider risks, such as regulatory uncertainty, volatility, and potential legal challenges, when deciding whether to use crypto assets.
“
Now the problem with knowledge is that the dam thing is endless, and that’s why even the most powerful computers will never capture it all.   Another debate to be had there I feel, but I digress.  

My two cent worth into the mix, then I observe that one day business will be forced to use this superior technology, just because everyone chooses to do so.  Others might be born into it and never know the old world.

Like lemmings off a cliff, I detest the thought of doing what they are all doing, without thinking for oneself, but critical mass is coming, where the scales will tip and perhaps not even legislation will be able to close the gates.   In the words of A. M.Antonopoulos, “Once the omlette is made, it can never be an egg again”.   And in the words of another seer, “you get the bitcoin price you deserve”.   I subscribe to the work of Dominic Frisby, who blows the trumpet for Bitcoin and whom I first saw on the Kiser Report a decade or more ago.     His assertion is that it should simply be seen as the money of and for the internet, again where the need and complexity of the third party is removed.  People should start getting used to it he says.  Leaders too, like Mr. Trump are now embracing crypto like it were a best friend, lost and now found.

Let us forget that the humble Bitcoin has gone over $100k in value, Perhaps it should be seen as an insurance policy against what the future holds.   Should all financial directors be made to study what is going on here, just to hedge against what may happen to their company.  If valued in Bitcoin, then the standard company has lost value over time, as compared to their comparable fiat currency in which the company is forced to report.  This could change, so I once again emphasise that they should study at the very least.

On the extreme however today there are companies like MircoStrategy with M. Saylor that are “all in”, holding billions of dollars in bitcoin.   The eco system is also bounding,  with for example, the now old news of the lightning layer on top of bitcoin and the CME in the USA creating a financial future for this instrument.  Not to mention that countries like El Salvador in South America are using Bitcoin exclusively in their country.

In terms of honest money Bitcoin is right up there, due to its decentralised and verifiable nature.  With public addresses and oversight by tax authorities at the every exchange along the way, then the tax dodge is not there too.  Questionably it is great for society if the tax man is honest John, and not so good for the fraudster trying to hide his loot.    Where business was forced to get the blessing of loan sharks, now there are even more alternatives.

Having stated the above and on a final point of caution, then the point about store of Value, only holds true as the asset is going up.  There have been many months where Bitcoin has seen a serious inversion or deep correction where investors have been questioning the universe.