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Ever since the dawn of the cryptocurrency movement, its advocates have touted crypto’s revolutionary promise for businesses and individuals alike. It would, they said, liberate capital from the clutches of government and institutions. It would bring financial services to the unbanked. It would eliminate national borders as barriers to trade. In short — it was going to change everything.
But that was over 15 years ago. Since then, the business world went through a cycle of rushing to accept crypto payments and then rushing to stop. And many of the businesses that couldn’t stop talking about blockchain in the early days have since quietly abandoned their plans for the technology. Making matters worse, the crypto market itself is undergoing a correction that would give even seasoned Wall Street Brokers a serious pause.
All of this begs a particular question: At this point, should businesses wash their hands of crypto and move on?
The answer is not exactly. There are still plenty of aspects of crypto as a form of currency and as a technology that businesses should continue to explore. The trick will be to take a strategic approach to the situation to embrace the good parts of crypto while avoiding exposure to the risky or detrimental parts. Here are the three areas where businesses should train their forward-looking crypto focus.
Related: The Crypto Market Crash
Facilitating cheaper international transactions
Believe it or not, one of crypto’s use cases — cross-border payments — is still the one that’s closest to a real-world success story. The reason for that is the fact that crypto’s relative value has very little to do with the nuts-and-bolts way it facilitates payments. It’s the underlying blockchains of the various cryptocurrencies that do the heavy lifting in a cross-border transfer scenario.
There’s plenty of evidence of crypto’s continuing value as an international transaction medium. For example, consider the fact that most of the major incumbents in that market — like MoneyGram and Western Union — are either already adopting blockchain or still have plans to do so. Plus, almost 25% of all cross-border payments Already use cryptocurrencies or blockchain as a medium.
All of this means that businesses can safely bet on crypto and blockchain as a cross-border payment technology that’s here to stay. They can go forward with plans to use blockchain-integrated payment and settlement systems and orient their internal processes to accommodate them. By doing so, they’ll gain substantial cost benefits without any meaningful exposure to crypto’s numerous downsides.
Related: Transforming Funds Transfers
Improving corporate governance
For a long time, it’s fair to say that the general public neither understood nor cared to understand the nuanced world of corporate governance. Businesses typically made their decisions behind closed doors and had only regulators to answer to. But ever since the run-up to the global financial crisis In 2008, people became acutely aware of how corporate decision-making can have a cascading effect on the public writ large.
The trouble is that other than publishing more meeting documentation and putting out press releases, there’s been no effective means for businesses to introduce transparency into their governance processes. And that’s where decentralized autonomous organizations (DAOs) come in. They’re a form of blockchain-based, transparent governance system that offers an alternative to traditional forms of corporate hierarchical decision-making.
Legal experts believe that DAOs can revolutionize corporate governance by introducing a workable means of bottom-up decision-making. That would eliminate the power that’s now concentrated in the hands of a small corporate board, thus making deliberate malfeasance much less of a threat. And because blockchains allow for complete visibility into the decision-making process, they create transparency by default. Both are desirable outcomes that business leaders would do well to work towards by exploring the applications of DAOs.
Enabling data monetization
Over the past decade, most businesses recognized that data — and who controlled it — played an outsize role in economic outcomes. Even, they recognized that data itself could represent a virtually unlimited return stream for those who found ways to monetize it. The trouble was that monetizing data creates security, provenance and privacy challenges that aren’t easy to overcome.
It turns out that blockchain technology is well-suited to address those very concerns. Its built-in encryption provides end-to-end security for stored data. And its immutability provides the perfect way to establish data provenance in an unalterable way. As for privacy, all that’s necessary is to anonymize any data before storage in a blockchain system, and privacy’s no longer an issue.
Best of all, this use case isn’t theoretical. China Unicom already has a functional data monetization system built on a blockchain. And crypto projects like Kalima are building solutions aimed at acccommodating the flood of data businesses will have to deal with as they integrate IoT devices into their operations. The bottom line is that data monetization is right in blockchain’s wheelhouse, and that’s going to continue to be true no matter what happens to the crypto industry as a whole.
Smart businesses shouldn’t abandon crypto
The bottom line here is simple. It’s that business leaders have every reason to cast a skeptical eye at the crypto industry right now. After all, it’s an industry that’s rife with problems that no sane businessperson would want any part of. That doesn’t mean, however, that it’s time to walk away from crypto entirely.
As the examples above make clear, there are still smart and beneficial ways businesses can leverage cryptocurrencies and their related technology. Done right, it can still be transformative in an overwhelmingly positive way. But that’s the key to success — identifying a real and compelling business use case and focusing on it exclusively while leaving the larger crypto ecosystem to its own devices.