How cryptocurrencies are changing the approach to MLM investing

Cryptocurrencies are already changing the principles of the economy and the financial sector. More and more companies are starting to use digital currencies as an alternative to fiat for investment, operational, and transactional purposes. In this article, we will explain why the popularity of crypto is growing and how it affects the approach to investments in network business.

What Is Cryptocurrency

Just a few years ago, the topic of cryptocurrencies interested only a few enthusiasts, but now it is talked about literally everywhere. Through examples from different countries, virtual currencies have proven to be an extremely effective tool for accelerating economic and social development. First of all, it is necessary to understand what it is:

Cryptocurrency - a digital currency based on cryptographic methods. The total market capitalization of this market is $2.65 trillion as of November 21, 2021, with around 14,000 cryptocurrencies traded worldwide, and, according to Crypto.com, the number of digital asset users has reached 106 million (as of January 2021).

Some countries approach cryptocurrency with caution, believing that this asset is associated with high volatility (price variability). On the other hand, many countries are willing to work on their innovativeness, modernize the financial system, and actively promote cryptocurrencies.

For example, according to research by Chainalysis, Vietnam, India, Pakistan, Ukraine, and Kenya are among the top countries in terms of cryptocurrency popularity. According to International Wealth, Germany, Singapore, and the USA are the most crypto-friendly countries for businesses.

Interestingly, Ukraine had the highest transaction volume with digital assets, and by the end of 2020, it entered the top ten countries with the highest earnings from crypto.

Cryptocurrency Positions in the Global Investment Market

To hedge their capital against inflation, many venture companies (e.g., Grayscale and MicroStrategy) tokenize a certain portion of their portfolio — this is part of their investment strategy. Over the past few years, the cryptocurrency market has come a long way:

- According to research by the University of Cambridge, the number of users has grown from 25 million to 100 million people (almost 2% of the world's population);

- Many countries, to varying degrees, have recognized digital currencies and are developing the legislative framework, taxation principles, rules, and bodies that will regulate the operations of crypto-enterprises;

- leading economic powers are preparing to launch a state-owned Central Bank Digital Currency (CBDC) system;

- major banks and financial organizations (such as PayPal) are offering the opportunity to invest in cryptocurrencies directly on their platforms;

- Bitcoin, Ethereum, Tether, Ripple, and other leading currencies are being added to major global exchanges through futures and options trading.

Today, cryptocurrencies are considered a serious asset that has found its place in the wallets of investors, from ordinary citizens to large funds.

Benefits of Implementing Cryptocurrencies in Business Processes

The main principles of crypto-economics are global accessibility and decentralization (blockchain), which provide independence from intermediary banks, transparency, speed, and maximum transaction security by modern standards. Furthermore, information about the sender and receiver is confidential. Among the specific benefits of implementing cryptocurrencies in business processes, the following can be highlighted:

- reduction of transaction costs, which implies cost reduction, increased exchange efficiency, and indirectly, increased transaction volume;

- diversification of the financial flow. At the very least, you will be able to receive payments in more currencies and protect capital from inflation;

- the ability to attract a crypto-enthusiast audience to join their partners. This is an excellent PR method, especially for new projects. You will also be able to attract the attention of individual venture funds or business angels;

- investment tokenization or the opportunity to launch crypto-crowdfunding. Digital assets are an alternative way to attract investment rounds to a project.

Digital currency is becoming increasingly attractive to the public, and companies operating in crypto gain a significant competitive advantage in the market. This technology definitely has a positive impact on expanding the customer base, brand perception, expands influence on the audience, and impresses potential investors.

More and more product suppliers and consumers are making payments in cryptocurrency. Sooner or later, your business will need the ability to transact in tokens to maintain loyal relationships with partners and clients.

Features of Attracting Investments in Cryptocurrencies

Attracting investments in digital currencies as a way to generate additional or even primary income for project development has its advantages and disadvantages.

Among the strengths are:

- accessibility. Anyone can use this financial instrument, regardless of their social or economic status. Additionally, to become part of the crypto market, there is no need to obtain broker licenses or any permissions;

- less bureaucracy and restrictions. Many countries are favorable towards digital currencies and do not have strict laws restricting crypto operations;

- below the entry threshold. Unlike the currency market, or securities market, investing in cryptocurrencies can be done by almost anyone with minimal investments, as they can be traded in tenths and hundredths of fractions;

- transactional globality. Digital currencies are not limited by geographical factors. That is why, already now, they have proven to be an effective tool for globalization and the development of international trade;

- ease of use. No special equipment or exchanges are required to make a transaction - just a phone / desktop device and an internet connection;

- no extra fees. To carry out a financial transaction, there is no need to deal with intermediaries (brokers, banks, or other financial institutions);

- crowdinvesting startups. Investments in your project may be available to an unlimited number of private investors and business angels, without the involvement of major venture capital funds.

Despite the obvious advantages, this type of investment also has its downsides.

Challenges may include:

- uncertainty with legal status in some countries. Legalizing the activities of a crypto company will not be possible everywhere, which needs to be taken into account when choosing a location for registering the brand;

- features of accounting and taxation. In most countries, legislation regulating the activities of crypto projects is still in the development stage. Therefore, you will need to take into account the individual features of accounting and taxation of digital transactions depending on the country you are in;

- skeptical attitude of some people towards such projects. To address objections from this audience group, you will need to demonstrate the benefits of crypto investments and suggest trying their hand by investing a small amount. Among other things, you will need to increase the overall level of financial literacy - educate people both inside and outside the projects;

- restrictions on promotion in some advertising networks. Some platforms are skeptical of projects in the digital currency niche and do not allow them to run advertising campaigns. Network marketing methods that have proven effective in promoting projects in this niche will help you.

Companies like iCoin Pro, Mindset24 Global, Latium, Ormeous Global, and Startbits have leveraged affiliate marketing opportunities for their promotion. If you are considering integrating cryptocurrencies into your processes, we recommend studying the activities of these projects and drawing inspiration from their ideas.

How to Integrate Cryptocurrencies into Your Network Marketing Project

By integrating cryptocurrencies and blockchain into MLM company processes, you unlock tremendous potential for its growth and development, enabling you to take the project to a new level of efficiency and innovation. For example, you can:

- create your own cryptocurrency. Its value can be pegged to the current dollar exchange rate, ensuring stability and investment protection;

- tokenize internal payment operations. In addition to the main cryptocurrency, you can create a token that will be used in transactions with fees and will be linked to the hardware resources of the system;

- launch a crowdfunding campaign. Connect a payment gateway and use cryptocurrency as an alternative source of funding for your organization;

- prepare and conduct an ICO. By purchasing project tokens, partners will be able to use them to pay for your services, goods, or, in the future, resell them at a more favorable rate;

- attract an investment round in cryptocurrency. There are enough crypto venture funds that can be an external source of funding for your company, for example Multicoin Capital, Digital Currency Group, or Arrington Capital.

About attracting the interest of funds, we wrote in the article How to find an investor for MLM business.

Cryptocurrencies are, by their nature, a great alternative to cash. Digital assets provide businesses with more opportunities than fiat currencies. The combination of the crypto world and MLM is a very promising direction.
 

If you have any questions regarding the use of cryptocurrencies and blockchain technologies in your company's business processes, the specialists of the teamFlawlessMLM will help you. We have practical experience in implementing crypto payments in network projects of various orientations and developing blockchain platforms from scratch. Contact our manager in the website chat and learn more about solutions for your business.