Capitalising on crypto craze: High end brands cash-in on cryptocurrency

By Shubhangi Shah

Italian luxury brand Gucci has announced that it will begin accepting payments in cryptocurrencies. A few days later, another luxury brand Balenciaga also announced the same. Both brands will begin this operation in some select stores in the United States, and Gucci says it plans to launch the same arrangement soon in all its stores in North America. Despite

The volatility and risks involved, it seems that brands are adopting more and more technologies of the new era to keep pace with current technological developments.

Although they are now furious, cryptocurrencies have been here for quite some time. And Gucci isn’t the first to explore the cryptocurrency payment option.

Pisa with caution

In 2014, before cryptocurrencies became a fad, US tech giant Microsoft began accepting payments in cryptocurrency. You can use bitcoins to top up your Microsoft account and pay for its various services.

Even though his company was the first to get into the fury of cryptocurrencies, Microsoft co-founder Bill Gates doesn’t seem to be a fan. In one of his ‘Ask Me Anything’ sessions on Reddit, the billionaire technocrat said, “I don’t have any (cryptocurrency). I like to invest in things that have a valuable return,” adding: he decides that someone else will pay for it, so don’t add to society like other investors. ” He also warned everyone who has less money than Elon Musk, that is, everyone, to “be careful” when investing in these digital assets.

Legendary investor Warren Buffett has expressed similar views. At Berkshire Hathaway’s annual shareholders’ meeting last month, he said he would not buy all the bitcoins even if they were sold for $ 25. It’s “because what would I do with her? I’ll have to sell her back one way or another. She’s not going to do anything,” Buffett added. Explaining his attraction, Buffett said, “It has magic and people have brought magic to many things.”

Environment-capital enigma

Billionaire businessman Elon Musk’s relationship with the environment seems complex. In March last year, it announced that Tesla, the electric car maker, would accept payments in cryptocurrencies, only to back down two months later amid protests by environmental activists. Citing environmental concerns, Musk said: “We are concerned about a rapid increase in the use of fossil fuels for mining and Bitcoin transactions, especially coal, which has the worst emissions of any fuel.” Adding, he said, “cryptocurrency is a good idea … but it can’t have a big cost to the environment.”

And rightly so, cryptographic mining consumes a lot of computing power and therefore energy, much of it coming from cheap fossil fuels like coal. In addition, on its website, Tesla says that its “mission is to accelerate the transition of the world to sustainable energy. To achieve this goal, we have built products that replace some of the largest polluters on the planet, while trying to do the right thing “.

Earlier this year, however, Musk announced that Tesla would accept Dogecoin, a cryptocurrency that began as a social media joke, for its commodity products.

Other brands

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

Visa, the multinational financial services company, also announced last year that it would accept cryptocurrency to settle transactions on its payment network. The company has enabled the USD Coin (USDC), a stable currency whose value is pegged to the USD, for transactions. Stablecoins are considered alternatives to highly volatile cryptocurrencies such as Bitcoin.

A green turn

Long before the cryptocurrency ecosystem exploded, Wikimedia, the non-profit organization that runs Wikipedia, began accepting donations in 2014. However, after intense discussion among Wikipedia editors, a request was sent to organization, the company stopped crypto donations due to environmental issues.

Meanwhile, Mozilla, the company behind the Firefox web browser, also announced this year that it would not accept “work-proof” cryptocurrencies such as Bitcoin and Ethereum, which consume a lot of energy. For example, Ethereum’s annual energy needs are the same as in the Netherlands and more than in the Philippines. Mozilla will accept “participation proof” cryptocurrencies such as Solana and Polkadot, which only allow a few miners and therefore require less power.

In addition to their ecological impact, cryptocurrencies are famous for their associated volatility, as seen in the collapse of terraUSD (UST), a stable currency, which has sent to the cryptocurrency market in general. Despite this, it seems that brands do not avoid risk and take advantage of cryptographic mania.

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