Cryptocurrency has been becoming increasingly popular over the last several years. The most well-known cryptocurrency out there is Bitcoin, but there are actually many different forms of cryptocurrency, all with differing values and levels of security.
Cryptocurrency has captured the imagination not just of consumers, but also of business owners.
Considerations for New Businesses
When setting up a business, there are many processes to decide on, from marketing strategies and advertising campaigns, to HR solutions and training programs. One aspect of running a business that is often overlooked is how you will receive payments for your products/services.
You may be wondering whether or not your business should accept cryptocurrency payments. There are both advantages and disadvantages in doing so, and we will explore some of each in this article.
The Advantages of Accepting Cryptocurrency
Before we explore the potential downsides of accepting cryptocurrency, let’s have a look at some of the reasons why so many businesses are adopting and recommending the use of currencies like Bitcoin for payments:
The More Ways to Pay, the Better
Traditional wisdom states that you should always make it as easy as possible for the customer to give you their money. This means offering a variety of different payment options. Although many customers will most likely stick with traditional currencies when paying, there is a significant demographic of younger and more tech-savvy people who welcome the option to pay with cryptocurrencies.
Increased Marketing Opportunities
The cryptocurrency community is well-known for sharing tips, wisdom, and discourse among each other, whether as customers or investors. Catering to this market can be a great way of increasing interest from the community and making sure that word spreads about your business.
Reduced Transaction Fees
While payment processors such as PayPal, and many banks, can take significant fees to process payments (in the case of PayPal, this can be over 4%!), cryptocurrency transactions tend to have much lower fees. If sending crypto peer-to-peer, there is often no fee at all.
International Payments Can Be Faster
International bank transfers are notoriously slow, and often come with transaction fees and less-than-ideal exchange rates. With cryptocurrency, all you need is a crypto wallet in order to receive payments from anywhere in the world within minutes.
Diversification of your investment portfolio is highly recommended by financial experts, and incorporating cryptocurrency is a great way of keeping your portfolio diverse.
The Disadvantages of Accepting Cryptocurrency
No form of currency is without its drawbacks. Here are some of the disadvantages of taking cryptocurrency payments:
Exchange Rate Changes Are Hard to Predict
Currently, cryptocurrencies are free of governmental regulation and are subject entirely to market forces. This means that the value of any virtual “coin” can fluctuate more significantly and less predictably than that of traditional currencies.
However, this isn’t necessarily bad—if you study and follow the crypto market, you can be prepared for changes, and even increase your profit if you are able to play the game well! In addition to this, if you want to play it safe, you can convert cryptocurrencies into fiat currencies as soon as you receive payments.
Security Can Vary
Because of the lack of regulation compared to traditional financial markets, crypto exchanges can often be vulnerable to hacks. Security weak points can often be found with blockchain wallets, so you should do your research into the best blockchain wallet provider.
Lost Funds Can Be Unrecoverable
One of the main drawbacks of using crypto wallets is that lost funds can be unrecoverable. If your wallet’s access key is lost or compromised, any funds stored in the wallet can be lost forever.
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