Electronic Currencies' Potential Impact on Business

Posted by Jeff Pelliccio on Aug 7, 2017 9:00:00 AM

In ICS insights

Bitcoin has surpassed $20 billion in market capitalization. Their closest rival, Ether, recently topped $2 billion. There are many other signs that electronic currencies are rapidly gaining legitimacy. For instance, CNBC recently reported that Microsoft, Intel, and even JPMorgan are taking part in the launch of Ether's blockchain technology, called Etherium. It might not seem unusual to find technology companies involved in blockchain. Tech companies and developers tend to be open to new tech. However, when big banks participate, it's a sign that it's time to seriously consider the potential impact of electronic currencies upon businesses.

How Might Electronic Currencies Impact Business?

A group of Harvard Business Review writers believe that blockchain and associated electronic currencies will eventually impact our financial system as much as the internet impacted the way that we consume entertainment and news. Less than 20 years ago, mainstream news scoffed at the notion that people would routinely consume news online. Movie theaters, video rental stores, and even cable TV felt secure with their market positions. Companies in these industries either eventually adapted to the internet or went out of business.

Now people are very likely to learn about the day's events or watch their favorite shows on their cell phone. It's hard to believe that few people saw the revolution coming. It would be a mistake to ignore the similar impact that blockchain technology may soon have upon financial transactions, banking, and all sorts of businesses.

Development of the Internet Foreshadows Blockchain Technology

It actually took the internet quite a long time to gain the mainstream foothold that it commands today. At first, it wasn't really a commercial endeavor. The early internet was mostly interesting to some government and academic organizations. The Harvard Business Review article points out that email really served as the driver to attract investment money that drove innovation. In other words, it was that one critical application -- electronic mail -- that really built the net.

It's important to understand that organizations can use blockchain platforms for more than just alternative currency. Similarly, alternative currencies function as the driving application for the growth of blockchain. At the same time, blockchain technology can provide a secure and anonymous platform for many kinds of important transactions. Some organizations can use these platforms to hold votes, transfer contacts, and much more. It's isn't just electronic currencies that will impact businesses but many other applications. It's just that electronic currencies have served as the driver.

Alternative Currencies and the Global Economy

National Geographic presented an interesting take on the future of alternative currencies in a global economy. The article argues that currencies like Bitcoin combine the convenience of credit cards with the anonymity of using cash. For instance, a large part of the Earth's population lives in countries or social situations that don't afford them the same access to banks, credit cards, or PayPal that most Americans take for granted.

If Bitcoin and other alternative currencies can provide residents, migrant workers, and businesses a way to transfer value, it could be a game changer. In addition, these electronic transfers allow these transfers to occur without the fees, delays, and other issues inherit in established financial transactions.

How to Prepare Businesses for the Impact of Blockchain and Alternative Currencies

At ICS, we pride ourselves on our ability to help clients foresee and prepare for the impact of emerging technology on their companies. New tech will require highly skilled people in IT. At the same time, these changes could also impact finance, accounting, human resources, legal, and many other departments. As was true when the internet first gained a foothold in business, companies faired better when they faced changes proactively. We're the right people to contact to find the people that you need.

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