The meteoric ascent of Bitcoin has sparked a proliferation of digital currencies and broad interest in blockchain-based technology.
Before accepting cryptocurrencies, there are some major concerns, both technological and pragmatic. Do small companies need cryptocurrency? According to Business News Daily, certain blockchain companies are seeking to advance the area.
What is Bitcoin?
Cryptocurrency uses peer-to-peer (P2P) technology. This means that it is decentralized. It is also unregulated. As a result, it’s unbacked. Buyers pay merchants directly, without a middleman.
Cryptocurrencies take away the middlemen said Chris Poelma, a small business person who has started accepting some crypto payments. Rather than relying on a company to protect your funds, you keep them encrypted, and only you have the key.
As we learn more about data breaches and clever hackers, cryptocurrencies seem more enticing to customers seeking a safer method to transact. Small companies may opt to take cryptocurrency for a variety of reasons, including keeping up with technology, recruiting crypto clients, and reducing fraud.
Is it suitable for your company?
Advantages of Cryptocurrency
For small enterprises, cryptocurrency provides significant advantages over conventional point-of-sale systems.
The absence of a central middleman minimizes transaction costs. Small companies that accept credit cards frequently pay roughly 25 cents for each swipe plus 2 to 4 percent of the overall transaction. Smaller establishments typically set credit card purchase minimums due to these fees.
Because of this, businesses enjoy protection against fraudulent chargebacks. No third party may overturn charges. Thus they are final. Business owners don’t need to dig through credit card receipt signatures to avoid chargeback fraud.
The decentralized structure of crypto allows small firms to grow and reach new worldwide markets. Using Bitcoin, a tiny electronics merchant sold $300,000 worth of goods to over 40 nations.
Adaptable to Customer Tastes
Accepting Bitcoin gives clients more ways to pay while protecting their data.
Obstacles and Risks of Adopting Bitcoin
Acquiring a digital wallet on a cryptocurrency exchange may be difficult for small company owners inexperienced with the technology. Cryptocurrency is a complex industry with a steep learning curve, challenging to navigate while running a company.
Small firms, in particular, would find it difficult to accept cryptocurrencies. Even without technological issues, the volatility of crypto prices discourages businesses from holding digital currency.
Optherium, which will start its ICO in June, has already constructed a platform to address these issues. The Optherium B2C platform allows customers to pay in Bitcoin while merchants may accept any money, digital or fiat. The Optherium B2C platform lets buyers pay in whatever currency they desire, and sellers accept any.
They will initially offer 50 cryptocurrencies and a broad range of fiat currencies, completing 100,000 transactions every second. Optherium has its token, although it isn’t required to utilize it. Instead, holders of Optherium’s own coin will benefit from even cheaper platform costs.
Volatility of Bitcoin
The most volatile aspect of digital currency is price volatility.
For example, Bitcoin stood at $19,172 per coin in December 2017, up from pennies in 2009. You’ll need to arrange for the conversion of your bitcoin back into your official currency, said Areiel Wolanow, managing director of Finserv Experts. Cryptocurrencies are volatile, so do this fast and often.
Using a merchant service provider such as BitPay or Coinbase protects small companies from the volatility of the digital currency. These platforms allow users to pay in real-time for cryptocurrencies.
Keeping cryptocurrencies as a speculative investment is the sole justification, according to Wolanow, but it’s practically gambling with your earnings.
While bitcoin transactions remove dangers like stolen credit card data, they aren’t entirely secure. There is currently no method to entirely protect consumers’ funds from fraudsters.
Cryptocurrencies, unlike fiat currencies like the U.S. dollar and the Euro, are not backed or guaranteed. But some Bitcoin startups want to alter that.
Coinbase, for example, retains less than 2% of users’ digital money online and completely guarantees losses. Like regular banks, the FDIC insures Coinbase’s fiat currency up to $250,000. It’s still your job to safeguard your account. However, you can rest easy. If someone hacks your firm, all is not lost. Assets are protected. You can protect your accounts by enabling multifactor authentication, safeguarding your secret keys, and frequently backing up your data.
Companies are also working on wallet security solutions. According to Beck, Optherium uses biometric verification to identify users based on face anatomy, making it difficult for thieves to take someone’s assets. This strategy also helps users recover lost wallet access.
Uncertainty in the Market
Accepting cryptocurrencies also poses the risk of legislative changes shortly. Regulators are still working on it.
Regulations will undoubtedly alter once in place, so company owners must be agile. Because cryptocurrencies are new, it’s unclear how the government will regulate them, Poelma added. New rules may be in effect by the time you read this!
To be broadly recognized, firms must be assured they understand how to declare profits and pay taxes on bitcoin transactions.