Is it time for your business to join the Bitcoin revolution?
Before you do, it’s crucial that you understand what you need to know about accepting Bitcoin.
In this article, we’ll look at the rise of Bitcoin, the pros and cons of accepting BTC payments, the risks and rewards to your business, and some future uncertainties for firms to consider.
Bitcoin Revolution
Cryptocurrency awareness and popularity have exploded. In a short time, crypto has shifted from a niche investment to a mainstream option.
Leading the way has been the most valuable and popular of the cryptocurrencies, Bitcoin. This is why some have labelled the growing challenge of crypto to ‘traditional’ finance the Bitcoin revolution.
When it launched in 2009, BTC was basically worthless. In November last year, it hit an all-time high of almost $68,000, according to CoinMarketCap. This year’s turbulent markets have seen the value of Bitcoin, along with all cryptos, fall, but BTC price still hovers around $20,000.
Bitcoin’s meteoric rise sparked a rapid growth of digital currencies and widespread interest in blockchain-based solutions. While thousands of other coins followed, BTC remains the best known.
It is termed the Bitcoin revolution because, for many, Bitcoin and cryptocurrency are interchangeable terms. That can lead to confusion about what Bitcoin is and what it does.
What is Bitcoin?
Bitcoin is a digital currency designed as a payment form that is beyond the control of any individual or single group or entity. It is based on the Bitcoin blockchain network, a distributed ledger of transactions, where the currency is ‘mined’.
Bitcoin is decentralised, removing the need for any third party to be involved in BTC transactions. It was initially designed to enable peer-to-peer transactions, which raised the possibility of easier cross-border trade, inflation-proofing, and greater transaction security.
It has become a popular digital asset to invest in, although prices can fluctuate wildly. This year’s market volatility has shown that. The adoption of BTC as a payment method has not been as widespread, but that is changing.
The Bitcoin revolution is now seeing major brands promoting that they accept BTC as payment. Several credit card companies and online payment portals proudly boast of including BTC as a payment method.
At a local level, it is no longer unusual to see stickers on the windows of bricks and mortar businesses, including independent stores, proclaiming ‘Bitcoin Accepted Here’.
But should your business join them?
Should Your Business Accept Bitcoin?
Accepting Bitcoin has become a necessity for businesses with customers worldwide who want to avoid bank transaction fees, lengthy processing times, and the additional hassle of converting to a different currency.
Many small businesses want to accept Bitcoin, partially because of the benefits of BTC as a form of payment and partly to be seen as being ‘ahead of the curve’ in the tech space.
But you must ask yourself, is joining the Bitcoin revolution appropriate for your business?
Benefits of Bitcoin
Some of the main advantages of Bitcoin over a traditional point-of-sale system include:
Reduced Costs
Accepting Bitcoin and other cryptocurrencies is a way to reduce the transaction fees that typically plague standard payment methods. For example, you could save money on accepting credit cards and other services without any processing fees.
Since many cryptocurrency transactions are irreversible, there’s little risk of fraud or chargebacks.
Merchant Protection
The security of a decentralised network is also evident in the protection it offers merchants from fraudulent chargebacks. Because no third party can reverse charges, the transactions are final, similar to cash.
Reach Global Consumers
Accepting Bitcoin is a great way to attract new customers because it allows access to an international audience regardless of national currency or if they are ‘unbanked’ (do not have a bank account).
If you have an online presence, accepting Bitcoin payments could help grow your customer base as anyone with BTC can shop with you, without either party needing to install specific software.
Risks of Accepting Bitcoin
Although there are benefits to joining the Bitcoin revolution, there are also factors that could deter businesses from accepting it as a payment method:
Volatility
Because Bitcoin’s value fluctuates so widely and rapidly, many small businesses tend not to accept them and other cryptocurrencies. Although merchants do have some protection against volatility through instant exchanges and price matching, the risk of cryptocurrency fluctuating before a sale is still there.
Low Awareness
Although it’s estimated that 46 million American adults currently own a share of Bitcoin, only 1 in 5 admit to ever using them for purchases. More than likely, consumers don’t know about or understand cryptocurrencies and might not trust them yet.
Technical Difficulties and Customer Convenience
The technology behind Bitcoin can be challenging for both businesses and customers. It may, therefore, prove difficult to adopt as a payment method. Also, because it has such low awareness, you’d have to provide comprehensive instructions should you accept crypto payments.
Regulatory Uncertainty
There’s much uncertainty about how governments around the globe will resolve the regulation of cryptocurrencies as they are relatively new. Bitcoin is the best-known crypto, but regulation remains incomplete and inconsistent from jurisdiction to jurisdiction.
Is the Bitcoin Revolution for You?
Bitcoin and other cryptocurrencies are gaining awareness, popularity, and acceptance. They are beginning to be seen as more efficient, secure, and interference-free payment methods worldwide.
This creates an opportunity for businesses that embrace BTC to gain new customers, especially internationally. However, low awareness and knowledge of cryptocurrencies, market value volatility, inconsistent regulation, and uncertainty about a relatively new payment form mean there are risks.
It doesn’t look like cryptocurrency is going anywhere, and while widespread adoption may be slow, the move is towards cryptos like Bitcoin becoming accepted payment methods. That means businesses that get in now could benefit by being early adopters.
However, you must conduct extensive research before making your business part of the Bitcoin revolution. Do you have the infrastructure to accept crypto payments? Will you grow footfall by adding BTC as a payment option? Do you sell online, where the most significant benefits could be seen? Are you aware of and prepared to take on current risks?
For some businesses, accepting cryptocurrency payments could be a hit. For others, the risks could outweigh the potential rewards.
