Entrepreneurs, businesspersons, investors, and even nations have taken a keen interest in Bitcoin after its remarkable rise made it a household name in 2017. The crypto industry is growing at a rapid pace, and there are currently about 2.5 million items that can be bought using Bitcoin.
The speed, accessibility, and added security of blockchain technology are all factors that increased the adoption rate of cryptocurrency. Small businesses stand to gain a lot from adopting Bitcoin for business transactions, some of which include:
No added fees
Unlike the traditional payment system where third parties take a certain percentage of your money as processing fees, cryptocurrency requires no third party. Though you may be provided some optional fees to speed up your transactions, crypto has been reviewed alongside different payment systems and it was the cheapest of them all. In fact, credit cards are seen to cost about 5.5x more than bitcoins.
This factor alone can save new businesses a whole lot of money.
Speed and accessibility
You can quickly send money to others right from your Bitcoin wallet, irrespective of location. This makes Bitcoin more time-efficient and easier compared with other payment systems where you are required to fill in credit card details or other forms before a transaction can proceed.
Also, creating a Bitcoin wallet is totally free and available to all and you can access your Bitcoin wallet and make payments at any time without limitation.
Despite these benefits and more, below are factors to consider before diving into cryptocurrency to ensure it serves the above benefits and not cripple your business by driving away customers/clients.
1. Business model
Although as much as 2.5 million items can already be bought using bitcoin, it’s still a fact that not all market niches have fully embraced the digital currency - Amazon, for instance, turned Bitcoin down for the fact that it’s still a highly unstable proposition and not many of its customers have expressed interest in it.
The business model must especially be taken into consideration because, say for example the Real Estate industry may thrive on the digital currency, a brick and mortar startup that deals mainly with local clients will not really experience many benefits from it. Instead, such startups will be subject to unnecessary taxes (if from the US), as the IRS is currently treating the coinage as a taxable property.
2. Consumers’ interest
The crypto market has hugely grown in value over the years but there are still mixed feelings amongst the masses on the currency because some consider it a means for illegal, underground operations just as hackers held North Carolina Government’s computers on ransom and demanded 2 bitcoin — which was worth about $25,000.
This means that, though experts call Bitcoin the future of banking, businesses still have to do a thorough research to see how the currency is panning out in their niche and, most importantly, how much interest their customers/clients have expressed in it.
3. Governing laws
Bitcoin is still being deliberated and most countries are still neither with nor against the digital currency. Still, businesses need to carefully review the law governing the use of the currency in their locality before proceeding to adopt it.
This is important because just as bitcoin is still an unstable proposition, laws regarding the currency will differ from place to place and are subject to change at any time. At the moment, the countries that have banned the use of bitcoin as an alternate currency are India, China, Germany, Russia and more.
The above factors will help businesses make a clearer and more conscious decision as to whether to adopt Bitcoin as an alternate currency for business transactions or stick with the traditional currency and payment systems.