These 2 experts explain why you need to embrace this technology now
A lot has been written recently about the death of cryptocurrencies, but is the end really here? Or are we at the beginning of a revolution in how we manage our finances and run our businesses? We do know that cryptocurrencies are being used to conduct business. As of 2020, 28% of American small businesses accept cryptocurrency as payment and that each day there are over $1 million spent on goods and services with Bitcoin in the US.
To help us separate the potential from the spin, Stage2Startups, in partnership with Lean In NYC, talked with Greg Johnson, co-founder of Rubicon Crypto and Anthony Rodriguez, a Fintech Financial Crime and Regulatory Compliance Executive who also owns Flor y Cafe, a local coffee and flower store which accepts cryptocurrencies. The session was moderated by Debra Albert, Network Leader, Lean In Network, NYC.
The Birth of Crypto
“You can thank the banking crisis and Great Recession of 2008 for the rise of blockchain and the cryptocurrencies that use it,” says Greg. “The financial meltdown gave life to the technology movement to disintermediate governments, banks, and other third parties which were blamed for the crisis. This is now just another way to exchange value but without incurring the fees charged by traditional middlemen.”
Anthony also notes that this is a natural evolution of money. “We are seeing the transformation of our financial system into a digital economy,” says Anthony. “Blockchain technology enables secure transactions that the internet was never built for.”
So Why The Controversy?
Of course the huge fluctuations in the value of these currencies has made investing a strategy only for the most risk tolerant of investors. But cryptocurrencies have also generated a lot of controversy as a way to exchange value.
“There is always resistance to change, especially when it threatens large established players,” says Anthony. “And the financial services industry is being disrupted like no other time.”
“In addition,” added Greg, “the speed of technological change is faster than it has ever been before. The regulatory environment, particularly in the US, is behind. This enables bad actors to take advantage of people.”
It also takes awhile for people to become comfortable with a new technology. Greg compared it to the introduction of the personal computer over 20 years ago. “Most of us did not use a computer,” notes Greg, “but now we have become very comfortable and adept at using this technology – technology we never thought we would ever use at the turn of the century.”
Is Crypto Here to Stay?
All the signs say yes. Just look at what the existing banking industry is doing. On one hand, they publicly discount the importance of crypto but at the same time they are investing hundreds of millions of dollars building the technology to support digital and crypto at their banks. And Fidelity Investments is now allowing cryptocurrencies to be held in their 401K retirement programs.
“Large financial institutions are not going to invest millions if not billions of dollars to support cryptocurrencies unless they have a long term vision that this technology will be a major way society exchanges value in the future,” notes Greg.
What Does This Mean For Small Business Owners?
“At its core, cryptocurrency is competition. It is forcing legacy systems to change,” says Greg. “Small business owners should want this to win and grow because it will force competition leading to lower costs. But remember, we are still very early.”
Anthony currently accepts cryptocurrency and hosts crypto education events at his cafe, Flor y Cafe, leveraging the capabilities on the Shopify platform. “I feel the best way to learn about something is to actually use it because we are all a little bit afraid of what we don’t know,” says Anthony. “Focus on the use cases – how to hold it, how to spend it, how to accept it, etc. Get away from the hype and try it so that you can be prepared for whatever happens down the road.” Greg adds that as a small business owner, it is important to know yourself and your customer. “If your customer is digitally native, it may be important for you to offer a crypto payment solution now. However, if your customer is less likely to embrace new technologies, you may not need to be an early adopter.”
The transformation of the financial world that is underway is happening globally, and while we are still early in the process, this transformation will inevitably happen. Now may be a great time to learn about, and get comfortable with, this technology before it fully enters the mainstream.
You can hear our full conversation with Greg and Anthony on our YouTube Channel at Why Crypto Matters.
Copyright 2022: Emelie Smith Calbick and Betty Wong