Cryptocurrency: Pros and Cons and Company Application

BUS530 SLP 3
Your Name
Trident University International
BUS530 Managerial Economics
Due Date
BUS530 SLP 3
The business world is revolutionizing, and various payment methods are emerging. Cryptocurrency is one of them, and people globally are using it. One company that has partnered with crypto to allow cryptocurrency payments is Visa Inc. Although cryptocurrencies have advantages, they have disadvantages that investors must be careful about.
Cryptocurrency
The adoption and use of cryptocurrency as an alternative exchange medium and store of value is vastly growing globally and threatening to replace the traditional medium called flat money (Frankenfield, 2023). Cryptocurrencies act as payment infrastructure and instruments to form alternatives to the existing payment systems. Cryptocurrencies continue contributing to the continuation of money and may substitute existing forms. They also provide asset-holding diversification and payment option for those who do not wish to use the flat money system. Flat or traditional currency is centralized money managed by a recognized government. The central banks and governments vouch and determine the value of the flat money. The emergence of cryptocurrency aims at solving the challenges of flat money, especially because it is not controlled by any centralized body (TradeStation, 2021). Therefore, cryptocurrency aims to remove intermediaries, improve cost efficiency, and advance customer access and control.
Pros and Cons
Using cryptocurrency has several advantages and disadvantages. One of the advantages of cryptocurrency is that it is decentralized and eliminates intermediaries and possible system failures. This guarantees transactions worldwide, avoiding crises like those witnessed in the United States in 2008, where financial institutions failed (Frankenfield, 2023). Secondly, using cryptocurrency helps facilitate the transfer of funds between two parties without involving an intermediary. The transaction is made secure through the use of public and private keys. Thirdly, the transfer of funds is faster, almost instant, because it does involve a third party.
However, there are downsides to the use of cryptocurrency. Instead of being anonymous as thought, cryptocurrency transactions are pseudonyms. This means digital transactions can be traced, giving organizations like the FBI a loophole for tracing and investigating transactions. Secondly, cryptocurrencies have become a target for criminal activity, like the rise of crypto hackers and money laundering. Therefore, the use of cryptocurrency may not be safe. Additionally, the cryptocurrency traded in public markets suffers price volatility against the notion that they do not fluctuate in value. For example, the value of bitcoins dropped from $65000 in November 2021 to around $20000 in May 2022 (Frankenfield, 2023).
Company Application
Visa Inc. is among the global companies that have integrated cryptocurrency into their system. It is a multinational financial services corporation whose headquarters is in San Francisco in the United States. The company facilitates the global tran...