Do you run a small business? In that case it is wise to consider cryptocurrencies like the Bitcoin? The Bitcoin came about in 2009 and is a decentralized digital peer-to-peer payment system that does not involve banks, governmental institutions, or any other third party. The Bitcoin has been created on the blockchain technology that ensures that your coins are well protected against frauds. Since this is a digital payment platform, transactions are not only faster but also cheaper. This can prove to be a big advantage for small businesses. Just take a look here to learn about how the bitcoins can be traded autonomously. Moreover, since it is decentralized, businesses no longer have to depend on banks for processing their transactions.
Should Businesses Consider Bitcoin?
- When you consider regular financial transactions, there are merchant fees to take into account that can cause depletion in your cash flow. So, for businesses complaining about this, Bitcoins can be a godsend. Bitcoin transactions will only charge you 1%, if at all. Sending and receiving Bitcoins is hassle-free and you will not have to rely on banks for verification of transactions. You will never have to shell out your revenues to pay for business loans and credit cards. You may however have to pay a nominal transaction fee to ensure that the processing is faster.
- Perhaps a bigger reason why small businesses have shown an interest in Bitcoins is because of the reduced waiting time. When you depend on traditional money transfer services the waiting period can be quite long. But, in case of the Bitcoin, there is hardly any waiting period as there is no centralized agency checking and approving every Bitcoin transaction. Verifications are done via the blockchain and Bitcoin transactions get processed at lightning speeds.
- Another strong reason for small businesses to consider accepting Bitcoins is that this transfer can take place seamlessly across international borders. When you have to export your products or import raw materials from outside, you will find Bitcoins more appealing when it comes to exchange rates, currencies, or handling foreign transaction charges. Bitcoin, being a global currency, is never tied to any one government or agency; it allows for cross-border payments. You simply have to make sure your suppliers and clients accept Bitcoins.
- Like any other investment Bitcoins can fluctuate in value. However, you will find that it is probably a tad less stable compared to commodities like gold. This may seem to be a drawback for businesses keen to accept Bitcoins, but there is also an indirect advantage. You can end up making high profits if you wait to cash your bitcoins because it is likely to increase in value over time.
- Bitcoin is a digital currency and it behaves more like cash; Bitcoin transactions will be final always and cannot be questioned by anyone. However, there may well be disputes between customers and retailers regarding credit card payments. When you have to frequently face such disputes, working with Bitcoins seems less troublesome.
These are some of the best reasons to consider Bitcoins but small businesses should at the same time be aware of its downsides. Small businesses may need to learn the ropes to avoid technical issues when working with digital currencies like the Bitcoin. So, they have to be prepared for a steep learning curve ahead. Besides, the volatility can prove to be unnerving if you are not able to keep emotions out of your decisions. Companies like Coinbase or BitPay can help insulate such businesses against this volatility by providing for instant exchange of digital currency for cash.