Utilizing crypto-craze: High-end brands profit on cryptocurrency

By Shubhangi Shah

The advanced Italian luxury brand Gucci has announced that it will start accepting cryptocurrency payments. A few days later, another luxury brand Balenciaga also announced the same. The two brands will launch the operation in select stores in the US, with Gucci indicating that they plan to roll out the same event in all of its stores in North America soon. Despite

volatility and the risks involved, it seems that brands are increasingly embracing new era technologies to keep pace with current technological developments.

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Although everything is furious now, cryptocurrencies have been around for a while. And Gucci is not the first to explore the crypto payment option.

Walk with caution

In 2014, before cryptocurrencies became such a fad, US technology giant Microsoft began accepting cryptocurrency payments. You can use bitcoin to recharge your Microsoft account and pay for its various services.

Although his company was the first to jump into cryptocurrency rage, Microsoft co-founder Bill Gates does not seem like a fan. In one of his “Ask me about everything” sessions on Reddit, the billionaire technocrat said, “I do not own any (cryptocurrency). I like investing in things that have a valuable return,” adding, “The value of crypto is exactly what another person decides someone else will pay for it so it does not add to the company like other investments.In addition, he warned everyone with less money than Elon Musk, which means everyone, about “being cautious “when investing in these digital assets.

Legendary investor Warren Buffett expressed similar views. At Berkshire Hathaway’s annual shareholders’ meeting last month, he said he would not buy all bitcoins even if they were sold for $ 25. It’s “because what should I do with it? I’ll have to sell it to you somehow. It will not do anything,” Buffett added. Buffett explained his appeal and said, “There’s a magic in it , and people have attached magic to a lot of things. “

Environmental capital riddle

Billionaire entrepreneur Elon Musk’s relationship with the environment seems complex. In March last year, he announced that electric car maker Tesla would accept payments with cryptocurrency, only to go back two months later amid outcry from environmental activists. Referring to environmental concerns, Musk said: “We are concerned about the increasing use of fossil fuels for Bitcoin mining and transactions, especially coal, which has the worst emissions of any fuel.” He added, “Cryptocurrency is a good idea … but it can not cost the environment.”

And rightly so, cryptocurrency mining uses a large amount of computing power and therefore energy, much of which comes from cheap fossil fuels such as coal. In addition, Tesla states on its website that its “mission is to accelerate the global transition to sustainable energy. In pursuit of this goal, we are making products that replace some of the biggest polluters on the planet, while trying to do the right thing along the way. . »

But earlier this year, Musk announced that Tesla would accept Dogecoin, a cryptocurrency that started as a social media joke, for its derivative products.

Other brands

The multinational coffee chain Starbucks also accepts crypto payment to top up its Starbucks cards through their loyalty program “Stars for Everyone”. To do this, customers scan a QR code at the counter and make payments directly through their cryptocurrency wallets.

Visa, the multinational financial company, also announced last year that it would accept cryptocurrency to settle transactions on its payment network. The company has approved USD Coin (USDC), a stack coin whose value is linked to USD, for transactions. Stablecoins are considered as alternatives to very volatile cryptocurrencies like Bitcoin.

A green shift

Long before the cryptocurrency ecosystem exploded, Wikimedia, the non-profit organization that runs Wikipedia, began accepting them for donations in 2014. After an intensive discussion between Wikipedia editors, after which a request was sent to the organization, the company stopped crypto donations for environmental reasons.

Meanwhile, Mozilla, the company behind the Firefox web browser, also announced this year that it will not accept “proof-of-work” cryptocurrencies like Bitcoin and Ethereum, which are hugely energy-intensive. For example, Ethereum’s energy needs per years equal to the Netherlands and higher than the Philippines. Mozilla will instead accept “proof-of-stake” cryptocurrencies such as Solana and Polkadot, which allow only a few miners and therefore require less power.

Aside from their ecological impact, cryptocurrencies are notorious for their associated volatility, as evidenced by the collapse of terraUSD (UST), a stable currency that plunged the cryptocurrency market as a whole. Despite this, it seems that brands are not pale in taking risks and exploiting crypto-craze.

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