The amount of people who are aware of Bitcoin and willing to use it is increasing very rapidly and we can see that from the total number of unique addresses used on the Bitcoin blockchain. The reasons for entering the Bitcoin community differ. Some people are willing to buy or sell bitcoins, others are looking for new investment options, and still others are waiting for a chance to use them as a regular payment medium.
People are willing to purchase commodities with bitcoins, while businesses are slowly adopting cryptocurrencies due to legal restrictions in several countries. However both businesses and nonprofits are only making their first steps towards Bitcoin. So why not start receiving payments in bitcoin or any other cryptocurrency? That’s a good idea, but first you need to know few things about it.
The motivation to use Bitcoin for Business
We are used to credit cards. Using them is convenient when you don’t need to have all your cash with you. It is also in some way more secure, thereby we have accepted all the hardships of using credit cards and bank accounts: constant fees, lingering registration processes even if you are a non-profit let alone commercial organizations, inability to send a small amount of money due to high fees. That’s where Bitcoin proves to be a good rival to the initial banking system. So, the pros:
- Fees. Initially Bitcoin has no fees at all. Now the amount of transactions in the system is swingeing and you can pay a fee to conduct your transaction faster, but that’s nowhere near bank fees. Firstly, the fee is pitifully small; secondly, it is unrelated to the total amount you transfer. It doesn’t matter whether it’s 0.00393448 BTC, or 300 BTC, you will still pay the same fee. That makes Bitcoin greatly applicable to the business sphere, because you can save a tremendous sum of money.
- International payments. Transferring money to other countries or halfway around the world is always a trouble with credit or cash cards. Since operations with bitcoin are conducted in a decentralized way over the internet it doesn’t matter whether you send money to your neighbour or a business partner somewhere on the other side of the globe. That makes bitcoin a good tool for international trade.
- Registration. It is much easier and faster to provide yourself with a bitcoin wallet or use one of bitcoin exchanges rather than establish a bank account and link it to a credit or any other cards. You only need to enter a suitable website and go through a habitual to all of us registration process and that’s it.
What are the challenges?
Basically, there are three main challenges or risks for your business interplay with bitcoin:
- Government acceptance. It’s hardly a secret that bitcoin is still not legitimized all over the world. And it’s a problem if your government hasn’t declared Bitcoin as a legal means of payment, so you can either have a business abroad, or try to make use of cryptocurrency in your country, but that can be risky. Although, the comforting fact is that most countries adopt cryptocurrency. While others still haven’t confirmed the status, there is only a pitifully small number of countries that are hostile to Bitcoin.
- Awareness among people. Certain people find it hard to understand the phenomenon of cryptocurrency due to the fact that it is a fundamentally new branch of finances. Despite all positive features of Bitcoin, one of the things that prevents people from diving into the world of cryptocurrency is time and need for self-education. But it is merely a question of time because the industry always aims to be more durable on the market and at the same time more plain for the consumer. If you think about the birth of the internet you’ll get the idea.
- Volatility. Bitcoin as a currency is still at its immaturity, so the exchanging rate is leaping strongly. This can even sometimes make you lose some part of your money, although if you know how to handle it, you’ll always be in pocket, and you’ll be able to use the volatility of Bitcoin as a tool that can bring you even more money.
Tips on how to start using Bitcoin in Business
Now when you more or less aware of how Bitcoin can hypothetically help you in your business, it’s time to decide if it is profitable. In most cases, it depends on your audience. You must analyze the situation and understand whether it brings incomes or not. For instance, the Dell company accepts Bitcoin as a payment for their commodity and there’s an absolutely clear reason for this. They sell computers and a certain part of their audience, for sure, uses Bitcoins and will be glad to spend them. Definitely, they use Bitcoin as a publicity stunt.
Even if you, personally, are involved in a cryptocurrency market, better think if so is your customer. But, still, you can always try because it won’t cause you any money damages. You actually need very little effort to start receiving bitcoins as a payment for your service.
The best option is to use certain websites that accept Bitcoin and provide payment processing services. They usually have a lot of different options to help you in different situations: retailing, ecommerce, donation and billing tools. For example, there is an option of an instant exchange of BTC to USD (or any other currency you wish to) and depositing it right to your bank account, so that you won’t lose any money if the currency has fluctuated dramatically. If you wish to keep your money in Bitcoins, you can use their wallet service, but if it is a large amount, you’d better keep them in cold storage. In order to use all these options you only need to register on the website and provide your credit card details.
What is the current state of Bitcoin adoption in business?
As recent experience shows, the countries, where bitcoin has already been adopted, are developing very fast in the cryptocurrency sphere. It’s not only about America, but Japan is also a good example. In the middle of Spring 2017 they adopted Bitcoin and by now (May 25, 2017) it has been stated that in the summer of the same year they are going to set up about 260 000 stores accepting Bitcoin. They even got their first airline company accepting Bitcoins.
Speaking about Europe, the situation is not as thick and fast, but still it is developing swiftly. As experts forecast, in a couple of years only the laziest won’t have an option to accept Bitcoins, not only in Europe, but probably in every country where it is legitimated.
It doesn’t mean that Bitcoin has already become a currency like the US dollar with which you probably can always buy a cup of coffee or a gift for your three-year-old daughter. There is still a lack of merchandise to be bought with Bitcoins, and especially this is the reason to provide one. Because it is always better to invest money in what is going to be greater in value than it is now. And there is no doubt that in some years Bitcoin will be more recognizable and merchantable. So if you start developing your business with an inclusion of Bitcoin right now there is a great chance that by the time everyone will suddenly remember about this opportunity, you will already be settled down and gaining profits.
Editor’s note: This is a guest post by Mary Ann Callahan, an expert on Bitcoin and cryptographic-related topics.