Cryptocurrency-powered business models are reshaping front- and back-end business operations around the world.
They not only provide innovative new answers to questions about exchanging money across borders and transferring large sums, but also offer compelling new solutions for fraud prevention and transparency-driven security measures.
Misha Graboi, CFO at Chia Network, recently sat down with PYMNTS to talk about how companies can take advantage of distributed networks for business-to-business (B2B) engagements, without sacrificing functionality for security.
“Payments using cryptocurrency technologies are relatively straightforward,” Graboi said, “but one area where certain crypto technologies really shine is the ability to improve transparency along an entire value chain.
“[They] provide the security that is inherent in bitcoin, and the functionality inherent in smart contracting languages and platforms, but do it at a fraction of the energy use we see today [across cryptocurrency transactions],” he said.
Integration Friction Is No Fiction
While fast and efficient payments can help drive growth, the back end of payments management is generally resource intensive, and he said cryptocurrency solutions are no different.
“It can be complex to go from essentially, I won’t say a cash-oriented business, but things like checks and even ACH, into one that can leverage blockchain technologies,” Graboi said. “Many CEOs will be spending a lot of time thinking about the best way to integrate these technologies into existing processes, or whether they need to redesign their operations and come up with new internal processes.”
As businesses expand, they frequently run into new regulations and business controls, including those affecting payments. After all, payments are a two-way street, and companies must also be confident that their business partners also understand these new solutions and are able to work with them and also ensure compliance.
Reflecting on his year-and-a-half-long tenure at Chia Network, Graboi told PYMNTS that a big part of his role has been creating an internal infrastructure that scales with, and supports, the organization as the complexity of its operations increases.
Things need “to be both structured enough to provide the adequate level of internal controls, but flexible enough to adapt to any future crypto regulations,” he said, going on to underscore that Chia’s goal has always been to provide a blockchain technology that does real things in the real world.
Crypto’s Sad Irony
“Cryptocurrency did not invent overleverage, it did not invent bad risk management; cryptocurrency did not invent bad internal controls,” Graboi said.
In fact, he said, bitcoin and blockchain technology were themselves invented and socialized specifically to address those exact failures within traditional banking and finance.
“What started out as an extremely promising set of technologies to provide essentially transactional and custodial infrastructure for many people in the world who either overpay for it or don’t have access to it, ultimately devolved into a gigantic casino,” Graboi told PYMNTS.
“One of the sad ironies is that the idea behind blockchain technology is that the user actually maintains control of their assets at all times, at least up until the point where they mutually agree with another party to trade them.”
What happened instead, Misha said, is that people began to use centralized exchanges because they were “easy.”
“For Chia, the mission has always been about deploying real applications and enabling independent developers and other users to do what they want with our open-source technology.”
Moving toward digital tools is a logical and increasingly easy step for business of all sizes across all industries. Digital tools provide features that are more than just conveniences — they are often essential for sustainable, long-term growth.
“I think cryptocurrency payments will continue to be adopted,” Graboi said.
As our globalized world becomes further integrated and intertwined, particularly from a business operational standpoint, transparency and traceability will only become more important. Single platform ecosystems built on top of decentralized blockchain solutions are an emergent option that provides reliable, modernized systems for payment management.
Comprehensive digital tools that allow businesses to send, process and receive payments efficiently and quickly will prove to be a catalyst for future innovations. Easy-to-use bookkeeping solutions will promote better client and vendor relationships.
Simple is always better — both from an operational standpoint and regulatory and compliance one. Blockchain and cryptocurrency-native payment solutions that provide transparency along the entire value chain make things easy for all parties involved, assuming the necessary tools have been integrated prior to transacting. They offer a future operating environment that supports both scale and security without making businesses compromise on either.