Crypto Future for Business Development

30.04.2015

Professional communities discuss ways to implement decentralized technologies apart from finances. Opportunities and prospects of technologies underlying Bitcoin are still beyond fulfillment. One of the most promising ways of using the technology is implementing it within business processes of an enterprise both to optimize accounting, and assess efficiency of work and rewarding employees.

In this context, there is a vast field for arguing consistency of decentralized autonomous enterprises (DAE), though it’s quite evident that future companies, bank entities for instance, won’t be competitive without technologies underlying Bitcoin.

Sergey Lonshakov and Eugene Radchenko, Bitfork Develop developers, discussed cryptocurrency introduction issues and relevant business advantages with ForkLog.

It should be noted, however, that ForkLog could not find any examples of effective introduction of cryptocurrency within any enterprise, apart from BNY Mellon (which is an internal cryptocurrency) being at early stages of testing at the time of writing.

Eugene: I think such projects are still on the books. Traditional business is still alert about Bitcoin technologies. The closest related product I could mention is Bitwage, a specialized platform allowing employers to pay salaries in cryptocurrency. Using Bitwage tools a company may avoid using its bank account to work with bitcoins.

By implementing crypto-technologies in enterprise management system one may not only issue e-shares thus making the employees real-time co-owners of the company, but significantly cut operational costs. It seems especially vital for poorly scalable business models operating within constant staff turnover and increase. In terms of efficiency and economizing, development of Bitcoin-based accountancy is much more profitable as compared to traditional solutions like 1C.

Sergey: Many companies vainly dismiss the issue of switching to internal fork, which is actually convenient, safe and capable of implementing within two months time. Servicing a network of several nod servers with completely free software is something that a single system administrator is able to do. There are client applications for any OS, as well as lots of solutions for monitoring and analysis of blockchain networks. Moreover, sidechain technology might connect that internal system with the world outside.

So, one gets inspired by the idea and decides to implement cryptocurrency in their small company. Thus several obvious questions arise: issuing, mining, applicability, and ciphering algorithm.

Sergey: First of all, one shall consider expenses for implementing of an individual fork and further maintenance of the network. Eugene and I discussed Bitcoin technologies in the context of enterprises and finally concluded that they can perfectly fit financial accounting. Cryptocurrency is safe, well-tried and non-expensive solution for internal accountancy for flow of funds within a company.

As for ciphering algorithm: one should use an algorithm that provides maximum efficiency with minimum expenses, which covers electric power supply as well. So, Bitcoin or Litecoin algorithms are quite applicable. And, of course, an enterprise can hardly be interested in an internal money system with issuing beyond the management’s control. Issuing control, however, is quite easy in fact.

Eugene: Ciphering algorithm doesn’t matter. The main thing is ensuring proper safety and protection. Traditional mining is hardly applicable, though, there will be some, but without rewarding, as the enterprise acts as the issuer and guarantor of their cryptocurrency’s cost. Therefore, network operation will be maintained by the company’s own efforts. Another way to implement cryptocurrency at an enterprise is realization within Crypto 2.0 environment.

Bitcoin fork
100% premine
POS (proof-of-stake) unit confirmation.
Advantages: independence from side developers
Disadvantages: impossible to integrate with external networks

Crypto 2.0
Capable of creating DAE
Smart contracts and asset exchange control
Advantages: fast launching, low cost of development, availability of integration with external networks
Disadvantages: depencence on developers of the environment

Bitcoin technologies may facilitate financial accounting and provide maximum transparency to a company’s activities. In perfect conditions of blockchain-based taxation, any complex accounting seems to be unnecessary at all.

Another important issue is interactions between shareholders or between employers and employees. Crypto 2.0 technologies allow organizing and automatizing operations with shares via smart contract systems. As for employer/employee interaction, a popular business model where an employee gets a false conception of being a part of the company and having their wages increased as the company’s income increases, could become more realistic.

Absolute transparency of incomes could be ensured by having several official Bitcoin wallets where all money are stored. Thus, for instance, any employee could find out whether the company actually has no money, or the salary isn’t paid for a different reason.

Internal cryptocurrency could be used for a system of wages. At the end of a month an employee could exchange that currency for fiat money, or become a minority shareholder, for instance, saving some of the earned crypto-coins at their local account thus letting the company to use those assets for business needs in exchange for some dividends.

Sergey: I think such business solutions will gradually gain popularity. I expect the interest to increase after major sidechain solutions come to life. For now, I’m watching blockstream.com.

Eugene: Such projects are business-oriented in the first place, they don’t cover average people. In this regard, I don’t expect much of acceptance here. There’s enough software for financial accounting now, so they’ll have to compete. Moreover, coming into the market will be even more difficult as compared even to other crypto-projects.

Now, in the year of 2015, it might sound like some kind of utopia, especially considering human factor which is deemed the biggest Bitcoin’s problem by many experts. But 10 years ago this wouldn’t have been just utopia, this would have been completely and utterly impossible due to absence of relevant technologies being at our disposal now.