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What is Cryptocurrency and How Does It Impact the Travel Industry?

Many individuals in the travel industry from travel agents to those in corporate travel have been hearing a significant buzz about cryptocurrencies. What was once relegated to a fringe section of the internet is progressively entering the mainstream lexicon and is not only changing business but is also potentially going to change the travel industry as well. Cryptocurrencies like Bitcoins are even now being used as payments in the travel industry and are likely to only increase in usage as time goes on. With this new emerging currency what kind of changes can we expect in the travel industry?  And what are cryptocurrencies?

 

Cryptocurrencies

Cryptocurrencies, like Bitcoin and others, are a non-state-sanctioned form of currency that is created using blockchains. In a simplified version, computers crunch algorithms and because the algorithms can only be solved at a set rate each solved algorithm earns some Bitcoins. Because the progress is steady and there is no known methodology of forging the unique cryptocurrency it is very secure and they often use peer-to-peer networks for payment processing. Unlike a physical currency which often gets forged or stolen, Bitcoins cannot be forged and are far more difficult to steal due to the high level of encryption that are used in their creation and transfer.

This regular supply of Bitcoins at a set known rate allows for the currency to maintain stability as well as security. This stable and secure currency has gained huge amounts of attention as it becomes clearer that this is a viable and safe form of payment. Whether in the travel industry or elsewhere, though, what determines a currency’s value? What makes a Bitcoin valuable and the money you print not?

The simple fact is money has value because people agree it has value. Paper money intrinsically has no value; the ink and the paper are often worth only a few pennies in material physically but because of an understanding of globalized economies, the strength of the money based on the economy that is associated with that currency, the inflation rates, how much money is in circulation, and a whole host of other factors, we are able to give paper money tangible value. The same is true of Bitcoins. Although initially, Bitcoins were fairly worthless, as more people began to understand what this could represent and its security, more people began to jump on the Bitcoin bandwagon. As more people grew to accept it as a viable form of currency, it became stronger and more well-known. Cryptocurrencies could easily become a globalized medium of exchange even though they are not backed by anything except computerized mathematics.

Cryptocurrency

 

Cryptocurrency in the travel industry

With the advent of this new currency, corporate travel could use it along with travel agencies for payments in the travel industry. Bitcoins and other cryptocurrencies often have significant security measures, are not capable of being stolen casually like a corporate credit card, and because it has agreed-upon value.  That value is assigned by its users and many merchants, individuals, and companies inside the travel industry are increasingly accepting Bitcoins as a form of payment themselves.

This acceptance has become easier since there are now some banks which will even exchange Bitcoins and other cryptocurrencies into physical money which can then be transferred elsewhere around the world. Due to the methodology in which Bitcoins are shared and given, there is such a high level of security involved which makes payment interception extremely difficult if not nearly impossible. Because of this, it is little wonder then that different organizations within travel industries are using and accepting Bitcoin as a viable medium of exchange.

 

Security in travel

One of the most important reasons for any business or corporation is security. Using Bitcoins to pay for a trip, whether for an executive or anyone else within the organization, is a good way of helping to maintain financial security. Financial security is paramount to any business and a breach can be a significant amount of trouble both for your internal finances as well as for your public image. Many businesses have lost a lot due to identity theft and stolen corporate information, and even have found they have ruined credit scores until the situation was resolved.

Read also Avoiding Fraud in the Travel Industry.

Using secure payment methods like Bitcoin and other cryptocurrencies is a great way for a business to process their payments in the travel industry. This security also adds another level of oversight and protection as well. Not only is the business able to protect itself from outside threats but also using Bitcoins in this manner can help protect against insiders miss-spending and travel accounting mismanagement as well. Because of the limited nature in which Bitcoins can be transferred, they have a significant amount of accountability to whoever has access to the account making fraud easier to spot and harder to get away with.

 

Closing

Bitcoins are even now accepted to buy airline tickets which means that you can now exchange digital currency for a physical need and service. This aspect is only going to continue to rise as cryptocurrencies establish their security, their versatility, their globalized reach, as well as their universal acceptance continues to grow. It is likely that within a few years major airline booking groups, and even airlines themselves, may accept Bitcoins directly. It will not be long before you will be able to pay for a hotel or restaurant using cryptocurrencies technology as well as handle any other travel expenses like fares for the train or taxis. As its universal acceptance grows, the technology is only going to become more and more profitable for industries to accept.

Safer to use, greater security, simple to transfer, more oversight, as well as greater protection for sensitive data are all conspiring to help make cryptocurrencies like Bitcoins more universally accepted with each passing year.  Companies that are able to adapt to using this form of payment in the travel industry are going to be ones that are poised to protect themselves and their business image now and into the future.

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