When Bitcoin reached a peak price of $20,000 in December 2017, the hype about this cryptocurrency also hit an all-time high. The media flooded news about the escalation of Bitcoin valuation in the market. But a month later, the price dropped by almost 50%. This highlights how cryptocurrencies like Bitcoin can shake up businesses and markets worldwide.
What is Bitcoin?
Bitcoin is a form of electronic cash that can be bought, sold, or transferred on a decentralized exchange. All transactions involving Bitcoin and other cryptocurrencies such as Litecoin and Ethereum are recorded in the Blockchain, a publicly-distributed and encrypted digital ledger.
With a market cap exceeding $40 billion, Bitcoin is the largest implementation of blockchain. Litecoin, Ethereum, and Ripple are other cryptocurrencies that have made a significant impact in the market.
Foreseen Impact of Bitcoin on business
To say that Bitcoin will have an impact on businesses would be an understatement. Just like how streaming services like Netflix have disrupted traditional media such as television, Bitcoin is foreseen to cause changes on businesses such as in:
- Contracts— Bitcoin and other cryptocurrencies recorded in the Blockchain can pave the way for smart contracts. Blockchain, after all, is a public ledger where all transactions are recorded and validated. It’s a reliable and secure system.
- Payment processing— Bitcoin and other cryptocurrencies do not need a central authority or middleman to be processed as these are sent and received from peer to peer.
- Supply chain management– with Blockchain, status updates are immediately available and this can make the supply chain more secure and visible.
- Records and password management— through Blockchain technology, important information such as identification, titles, and deeds may be shared publicly.