Cryptocurrency: 5 Reasons Small Businesses (Might) Consider Using Bitcoin
Updated: May 9, 2022
There has been a lot of volatility in the Bitcoin world. Prices of coins have gone up and down in the previous years. Many businesses now accept Bitcoin payments, but most still only accept cash. Most companies don't need Bitcoin, and even fewer people know how it works or if it's safe to use it or use it. We explain what crypto is, how businesses can use Bitcoins to get a competitive advantage, and why it's good to use it.
What exactly is a cryptocurrency?
Cryptocurrency is a decentralized digital medium of exchange based on peer-to-peer blockchain technology. In other words, cryptocurrency is neither controlled nor supported by any central bank or government. Buyers submit money directly to suppliers instead of third parties to process payments.
How to set up crypto transactions in your system?
If you plan to integrate crypto into your business operations, the first thing to do is establish a system to accept cryptocurrency payments. Here are two ways to do it.
Create your crypto wallet.
Set up a crypto wallet that works similarly to a bank account. You can use this wallet to receive and send crypto tokens. Your customers might be using various crypto coins such as Bitcoin, Ethereum, Cardano, Binance, etc., so it's ideal to start a wallet that accepts different cryptocurrencies.
Integrate crypto transactions on your page.
After setting up your cryptocurrency wallet, the next step is to integrate crypto transactions into your brand's website. You can also check out crypto processors such as BitPay and CoinBase. If you're running an e-commerce business, platforms like Woocommerce, Magenta, and Shopify can have plugins to help you establish crypto transactions.
How your business can take advantage of crypto.
1. Protect the privacy of your clients.
Cybersecurity is one of the primary downsides of digitalization. Significant data breaches occur every year, exposing individuals to identity theft and financial harm. Cryptocurrency transactions are very anonymous because the buyer chooses what information to divulge.
Customers who value their privacy will appreciate having Bitcoin as a payment option.
2. Reduce transaction costs.
Businesses that take Bitcoins may deal with consumers directly or via an intermediary. The cost of a transaction without a middleman is low. Smaller companies may use this to change product prices and compete more effectively in the market. Bitcoin transaction fees have been ranging from USD $1 to $3.1 in April 2022.
3. Stop chargeback fraud
Chargebacks are a significant issue for both brick and mortar and internet companies. Customers will buy a product and return it, typically after using it. This is costly to the company money and leads to long-term losses. Only fiat money transactions may be charged back. Fiat is the legal tender or currency issued by governments around the world.
Customers must contact the firm directly through the Blockchain system for a refund.
4. Extend your reach.
Over the years, Bitcoin has been used to pay for goods and services. While many people are still unsure how to get Bitcoin, crypto enthusiasts will go to any length to obtain it. Accepting Bitcoin opens up a new market for business, helping to improve your reputation, income, and bottom line.
5. Simplify international trade
You would imagine that firms can sell to anybody in the digital age, everywhere. Unfortunately, several obstacles remain, with the high cost of payment processing being one of the most critical. Using cryptocurrency allows you to trade globally without relinquishing any profit or overpricing your goods. Because there are no intermediaries, transactions are faster and cheaper.
Why is cryptocurrency volatile?
Crypto is volatile as a newer asset class, with the potential for big upward and negative moves over shorter periods. As a result, it's a risky investment. Companies have a broad volatility spectrum, ranging from the relative stability of large-cap stocks (such as Apple or Berkshire Hathaway) to the often unstable "penny stocks." A stock is an asset that represents an investor's share in a company. A stock market trades stocks of public listed businesses.
On the other hand, Bonds are a lower-volatility asset, with less spectacular upward and adverse movements over more extended periods.
10 Major Companies that accept payment in Bitcoin:
Future of cryptocurrency in business
Cryptocurrencies have a long way to go before entering the mainstream, but their success implies that's where they're going. Your best chance is to adopt and develop them into your business quickly to receive the most out of them.
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