How Virtual Currency Can Impact Your Company
Virtual currency might be the most talked about subject that no one can actually understand. You’ve probably read blogs and articles about virtual currency and the wild swings in value it can take on a daily, even hourly basis, but making sense of it can be confusing.
The most straightforward definition of virtual currency is that it’s a digital representation of value that is only available in electronic format. There is no paper or coins like traditional currency. It can be exchanged via software, mobile apps or through computer software.
That might seem scary – money floating around in the digital atmosphere with no physical representation – but all of these transactions are completed in secure, dedicated networks. Virtual currency is issued by private parties or groups of developers, so their main concern is making sure networks are secure.
The speed at which digital currencies can be transferred is as fast as your internet connection, which makes it preferable to transferring funds between institutions and private parties. However, these currencies aren’t regulated and despite taking steps to maintain security, hackers can still breach the system.
Another form – or name – for virtual currency is cryptocurrency. The name is derived from the fact that cryptography is used to make it impossible to counterfeit, or double spend.
The integrity and value of a cryptocurrency is handled by a blockchain, which you can think of as a database that is shared by multiple pieces of a huge computer network.
There are several different situations that have delayed the growth and acceptance of virtual currency and the main sticking point is that they are unregulated by any institution. In turn, banks and other lenders are hesitant to become heavily involved without some form of government regulation.
Now that you know a little more than you did before about virtual currency, you may be wondering what it means for your company. After all, receiving payment instantly is always preferable to waiting for a check to clear or a wire transfer to arrive in your account.
Compared to traditional currency, virtual currency is in its early infancy as a form of payment. You can invest in software programs that create an interface virtual currency users are comfortable with – much like the process of using a credit card to purchase goods and services through the internet.
As the acceptance of virtual currency grows, the school of thought is that consumers will appreciate being able to pay bills – or receive payment instantaneously. Offering this service can boost your reputation across a variety of audiences – and help you brand yourself as an early adopter and tech-savvy business.
Like any new technology, virtual currency still has to gain more acceptance before it becomes widely accepted. Remember the first days of the internet? No one knew what kind of influence it would have on how we do everything in our daily lives – but it didn’t take long for that to happen.
Ask the Experts
At Taurus CPA Solutions, our experts are constantly at work to research subjects like virtual currency. We can provide advice and consulting services to help answer your questions and discuss the best options when it comes to this subject.