Cryptocurrency is now being accepted as a means of payment and a digital currency. As of September 2021, there are far more than 6,500 cryptocurrencies in existence since the first coin was created. Analyze if cryptocurrencies are appropriate for usage in your business before jumping on the bandwagon.
What Is Cryptocurrency and How Does It Work?
Cryptocurrency is a type of digital currency that may be used to purchase, sell, and invest. A cryptocurrency is a digital asset generated by people or businesses for a specific purpose and has no set value. Cryptocurrencies vary from fiat money in that they are decentralized and not regulated by governments or central agencies.
Cryptocurrencies are based on blockchain technology, which consists of digital databases made up of blocks, which are primarily composed of transactions. These transactions are recorded on public ledgers and are encrypted for security. Two public keys and the sender’s private key are used in every transaction.
Cryptocurrency’s Ascension
Governments, banks, corporations, and individuals all over the world have taken notice of the value of Cryptocurrencies. Bitcoin’s value has risen by almost $10,000 in just one year:
The advantages of digital money and the blockchain technology that enables it are recognized by both banks and enterprises. And customers are clamoring for help.
As the technology gains acceptance among banks, businesses, and consumers, crypto transactions may become the standard in the future. Check out Invezz to learn more about investment options and guidelines in case you are considering adopting digital currencies into your financial plan.
Cryptocurrency is being adopted by a growing number of businesses, from travel services to house cleaning services. Microsoft, eBay, Subway, Home Depot, Tesla, Shopify, ReMax, OverStock.com, and others are among the businesses that take digital money. Check out the below list of companies that currently take Bitcoin.
Pros and Cons of Accepting Payments in Cryptocurrency
Because of the transaction’s quick processing time, you may want to explore accepting Crypto for your goods and services as a business owner. While credit or debit card systems take days to complete and batch out, Cryptocurrency is processed instantly, allowing your company’s cash flow to run more smoothly.
| Pros | Cons |
| 1. Fees for transactions are reducedFor each credit card swipe, small businesses are often charged between 25 and 30 cents plus 2% to 4% of the overall transaction. Cryptocurrency payment fees vary by getting your digital coins in your wallet or via third-party wallets like Coinbase. Still, they are significantly less expensive than PayPal or credit card services. There is no fee-collecting intermediary to arrange the transaction. | 1. Price VolatilityDue to the volatility of Cryptocurrency prices, business owners must convert them promptly and frequently. Ethereum, a digital token, began trading at roughly $1 in the first few months after its inception and is now worth $1,976.To protect against volatility, startups and enterprises could employ BitPay or Coinbase’s services. When a payment is made, these services instantly convert digital currency to its cash equivalent. Investing in Cryptocurrencies could be considered speculative, putting your money source at risk. |
| 2. Merchants are not subject to chargebacks.Businesses are shielded from false chargebacks since bitcoin transactions are comparable to cash in that no third party can reverse them, and they are final. Chargebacks are impossible with blockchain technology since it functions as a peer-to-peer objective ledger. There is no bank or card network to turn to if a customer wants a refund, and only you, the merchant, can opt to reverse the transaction if he wants to. | 2. SecurityAt the moment, Bitcoin transactions aren’t entirely safe, and there’s no guarantee that cyber thieves won’t obtain access to clients’ digital wallets. Every day in 2018, an average of $2.7 million in Cryptocurrency assets is stolen. There are now insurers dedicated to covering Cryptocurrency risks, such as Nexus Mutual, Bridge Mutual, Coincover, and Etherisc, to help mitigate these risks. For example, Coinbase, a bitcoin exchange platform, stores less than 2% of its users’ money online. |
| 3. Expanded MarketThe acceptance of Cryptocurrencies would open up a new market opportunity for largely tech-savvy customers, many of whom would be from other countries. When a tiny electronics merchant began accepting Cryptocurrencies, he reportedly sold $300,000 worth of merchandise to customers in nearly 40 nations. | 3. Uncertainty in the regulatory environmentBecause Bitcoin is so new, there is no universal law that governs it. Each country has its own set of rules, and there are almost no Cryptocurrency restrictions.Bitcoin, for example, is accepted as a legal payment option in Japan. Because norms and regulations are still growing, business owners that use Cryptocurrency as a payment method will need to be adaptable. If bitcoin is regulated in their nations, they must be familiar with the regulations governing reporting gains and losses, as well as taxation. |
How do you Integrate Cryptocurrencies into Your Business
- Through an online Cryptocurrency broker service provider like Bitpay, you can take Cryptocurrencies in return for fiat currencies for goods or services you supply.
- With the support of a payment processor like Coinbase, you can make payments utilizing a Bitcoin merchant account.
Conclusion
Cryptocurrency transactions are significantly less expensive than typical bank transactions. While some businesses accept Bitcoin as a form of payment, the numbers are still insignificant compared to VISA/MasterCard. It could take a few years before Cryptocurrencies are accepted everywhere in the world. At the moment, Cryptocurrencies require more awareness than adoption.