When you see global tech giants like PayPal and Microsoft starting to accept the Bitcoin cryptocurrency, you know that as a small business owner you should sit up and take notice.
Yes, cryptocurrencies are now taking the business world by storm, and small businesses that want to take advantage of this emerging trend should get on board. In case you’re not familiar with cryptocurrencies, they digital currencies that use blockchain technology, otherwise known as a public transaction ledger. And while Bitcoin is the most popular and widely used cryptocurrency, it is definitely not the only one. There are actually 1,000+ cryptocurrencies, but only a few rival the popularity of Bitcoin, and those include Litecoin, Ethereum, and Ripple.
Still not sold on the importance of getting your small business equipped for the cryptocurrencies era? Read on for a look at the benefits and risks as well as how you can get started.
Benefits & Risks
Before you determine whether your business will get involved with transacting in digital currencies, you’ll want to weigh the benefits and risks . What follows is a look at what the pros and cons are — though you’ll see that the pluses outweigh the negatives.
You Own the Account: Depending on different circumstances, your bank or a player like Paypal can potentially place a hold on your account. But such is not the case with cryptocurrencies. With a digital currency like Bitcoin, you own the digital currency. So, you won’t have to worry about these types of freezes.
Can’t Be Seized By Governments: Accessing a Bitcoin account requires both private and public keys, which essentially makes it impossible for governments to take over the accounts of Bitcoin account holders. So, if your small business is looking for a more secure means of retaining your wealth, a cryptocurrency like Bitcoin could be an option.
Worldwide Currency: Bitcoin can be purchased by just about anyone from anywhere in the world who possesses an Internet connection as well as a fiat currency required to trade in exchange for digital coins. Digital currencies, moreover, can be more attractive in nations where the national currency is volatile. If your small business sells products and services overseas, transacting in cryptocurrencies might actually slash the fees that you pay to financial institutions to change your money from a fiat currency to another.
Reduced Fees: Your small business could reduce fees if it deals with cryptocurrencies. If you already accept credit cards, you will know that there are various credit card fees that you have to shoulder even for purchases that are relatively low value. However, you won’t have to deal with any transaction fees if you do business in Bitcoins or other cryptocurrencies.
Regulatory: The fact that there is no government regulation adds to the volatility and could impede support needed to ensure the long-term stability of cryptocurrencies.
Volatility: Cryptocurrencies like Bitcoin are subject to valuation volatility that might not be for the squeamish of heart.
Not Good For Microtransactions: For all its usefulness, cryptocurrencies are not good for microtransactions. So, if your small business is a restaurant that focuses on the breakfast crowd, for instance, digital currencies like Bitcoin would not be a good fit for you at present.
How to Get Started
If you’re like to move forward and set up your company to do transactions in cryptocurrencies, there are a few steps to keep in mind.
- Set Up a Digital Wallet: You can set up a digital wallet on your smartphone or tablet computer. Once you have obtained the QR code of your digital wallet, you can set up a touchscreen app so that customers can pay in store. If you lack programming skills, you’ll want to retain the services of a programmer to code the digital wallet into your website.
- Let People Know You’re Set Up for Bitcoin: You next need to let customers and potential customers know that you accept Bitcoin. They will come if you let them know.
- Decide Ho to Price and Process: Remember that cryptocurrencies can experience wide swings in valuation, so you need to pay attention to market values. You might want to consider selling gift cards in exchange for cryptocurrencies, which will enable you to define the valuation at sale. Then customers can use their gift cards to patronize your store.
When looking at the benefits and risks, it is still clear that the pros exceed the cons. In fact, there’s no denying the writing on the wall…and it clearly spells out that cryptocurrencies are more and more looking like the future of all transactions.