Last Updated on July 12, 2019
A cryptocurrency is a digital asset designed to work as a medium of exchange using cryptography to secure the transactions, to control the creation of additional units and to verify the transfer of assets.
Ever since the introduction, cryptocurrency has gained an immense acceptability and Bitcoin was the first financial player that has gained a sinister reputation. At present, it has become a preferred financial medium and most commonly it is being used to buy and sell goods as well as services online. Small businesses have started accepting cryptocurrencies as currency, not just as an investment or commodity. As there are definite benefits of accepting Bitcoins for the small businesses.
In the comparison of existing payment method, it is relatively a new payment method and not too many entrepreneurs and businesses are aware about its advantages and tax implications. Still, it is becoming increasingly popular.
Cryptocurrency is a hybrid digital currency and commodity. Cryptocurrency – widely known as digital currency is being used to store value just like any other fiat currency and it has exchange rate for most of the existing legal tender around the world. Almost all the kind of cryptocurrencies have a fixed supply, and this is what making them a precious metal just like gold and platinum. In order to use cryptocurrency, you will be required to open a cryptocurrency wallet account. These wallets are similar to the bank account explicitly for cryptocurrency.
Incase if you want to make purchases of cryptocurrency, then choose cash as an open exchange option and buy it from the most trustable and widely used platforms like Coindesk, Coinbase, and Bitpay at a stated exchange rate. You can make use of cryptocurrencies to buy goods/services at contributing businesses who have wallets and are willingly ready to accept cryptocurrency payments.
Wallets inbuilt have an option to convert the incoming cryptocurrency to cash, letting merchants “cash out” any cryptocurrency sales into a foreign or native currency. You can also store cryptocurrency in your wallet for later use. Conventionally, fiat money is formed by a sovereign government when it prints currency and controls it via a central bank. In such case, the currency that is created by the government is distributed via a treasury and it is tracked by a central banking system that manages and issues the currency via a centralized ledger.
On the other hand, cryptocurrencies are created by the tech savvy individuals known as “miners.” Such miners let the cryptocurrency algorithms access their computing power to preserve a decentralized ledger of transactions on the Blockchain. In return, miners create new cryptocurrencies known as “coins”. There is no central authority or entity to manage and access.
Miners are the only people who solely have right to generate cryptocurrency. Such coins they mine can be used by consumers and businesses to exchange for purchase goods, sovereign currency and services, as well as to keep as an appreciating asset. Cryptocurrencies are restricted to a fixed amount of coins and that can never be mined.
Cryptocurrency & How It’s Impacting Small Businesses
Entrepreneurs or small business owners won’t be sure like how cryptocurrencies will affect their operations. It is because there are pros as well as cons with these new digital currencies. At present, multinational establishments such as Amazon, Microsoft, Overstock.com, and other top-notch brands on this list is accepting Bitcoin, the most widely used cryptocurrency. These multinational corporations have encouraged small businesses to follow suit. Still, it’s significant to understand how cryptocurrency can positively or negatively affect your business before you make a firm decision.
Cryptocurrency offers a quick yet less expensive way to accept customer payment in the comparison of traditional payment type like a credit card. Let me get you through the 4 favorable ways like how Cryptocurrency positively affects your small businesses.
1. No Processing Fees
All the digital payments have processing fees. When you accept credit cards, you’re typically charged 2% – 3% by your credit card processing company. This is also the case with PayPal or Stripe. On the other hand, cryptocurrency doesn’t have any processing fees as there is no intermediary. Cryptocurrencies act as a peer-to-peer digital currency and use decentralized ledgers, means that you don’t have to pay anyone to facilitate the transactions. It means you can pass on your savings to your customers with lower prices.
2. High Transaction Speed
Transactions happen in real-time. Like how, it takes roughly 10 minutes to verify and facilitate a transaction from one person’s wallet to another. There are even cryptocurrencies like Ethereum and Litecoin that verify transactions in as little as 20 seconds. So, the coins are deposited into the merchant’s wallet in less than 10 minutes.
3. All Transactions are Final
Similar to the credit card transaction, all the cryptocurrency transactions are final. Merchants can better control their return policies and eliminates the risk of chargebacks and other things that might eat your revenues. It is also favorable for the businesses with customer fraud, such as when fake credit cards or bills are used or incase a customer fraudulently disputes a valid transaction.
4. More Payment Options for Customers
The more payment option a small business offers, it’s better for their ROI. As per the payment [processing survey, it has come to the notice that consumers use as many as 5 different payment types. If a small business is planning to accept cryptocurrency, then there is undoubtedly a potential chance of attracting a wider customer base.
Cryptocurrency and Your Small Business: What You Must Know
As Cryptocurrency and Your Small Business: What You Must Knowa general rule of thumb, let’s have a look what the Chief Investment Officer and Post Modern Marketing has to say.
Still, if you are planning to choose cryptocurrency as a small business, it won’t hurt to accept all types of cryptocurrencies. This is because most merchant wallets are not limited to accepting all forms of coins, but also automatically alter any sales transaction to the business’s base currency.
Cryptocurrency: Facts & Figures
Bitcoin is one of the most common type of cryptocurrency that was created as a peer-to-peer electronic cash system. Since the launch of Bitcoin there have been as many as 2000 various types of cryptocurrencies are available. The cryptocurrency market driven journey is based upon supply and demand. Almost all the cryptocurrencies have a fixed supply of coins that can be mined; however, the demand is typically speculative and volatile, causing large swings in the value of most cryptocurrencies.
The current total market capital of all the cryptocurrency is $347,609,733,669. Whereas the total number of crypto-bank account is ~17 million, more than doubling in the past year alone. It has resulted in an explosion of cryptocurrency transactions. Only Bitcoin itself boasts to exceed daily transactions of 150k – 375k globally.
For the small businesses it is completely favorable to accept cryptocurrency if they’re B2C; however, it is advisable to think twice if they’re B2B. Being a small business owner, it’s an opportunity to become an early adopter and stand apart your business from the herd. Consider the listed above advantages and implement cryptocurrency into your business to expand your consumer base, cut business costs and ensure your business and your customers are secure in the age of digital security breach.
The Bottom Line
If you are planning to start accepting Cryptocurrency as a payment for your small business, then you should undoubtedly get in touch with Bacancy Technology. We design and build business-driven, decentralized cryptocurrency exchange platforms. We are always committed to provide services that we know will be the most effective in creating lasting and impactful impression. Our skillful designers and dexterous developers work closely to create best Cryptocurrency software development and cryptocurrency exchange software development services.
For any further assistance, just drop us an email at [email protected] to get an ongoing support regarding Cryptocurrency development services. Feel free to contact us in case of any queries.