Figuring out whether your business should accept Bitcoin is always challenging. You know that the trend is towards more crypto, but then there are also the risks associated with it.
Unfortunately, it is one of those things that has positives and negatives, so you’ll need to be the judge of whether you want to accept it at your firm. Yes, people are interested in it. But there are also issues to do with the volatility, and so on.
Fortunately, this article is here to help. We look at the pros and cons of accepting Bitcoin at your business and whether it is something you should consider doing long-term.
Should Your Business Accept Bitcoin? Pros And Cons
Pro: Lower Transaction Fees
The first pro is lower transaction fees. Bitcoin is relatively inexpensive to transact, although it can take time to move between accounts, depending on the systems being used by the buyer and seller.
For this reason, businesses considering a comparison of payment apps like Venmo and PayPal may also want to include Bitcoin in the analysis. Fees are lower, which can sometimes offset some of the risk.
Pro: Faster Transactions
Digital payment transactions are usually pretty swift. However, Bitcoin could be even faster if transactions are on the Lightning network.
International payments have a reputation for being especially speedy when using Bitcoin. That’s because there is essentially no difference between sending them domestically. There are no international clearance or banking requirements.
Pro: High Security
Businesses also sometimes like to accept Bitcoin because of its high security. It’s almost impossible for anyone to commit fraud on the network unless someone gains access to a user’s account.
High security is something that is essential for many businesses, particularly those selling sensitive products. The more secure the payment option, the better.
With that said, modern POS systems and banking are more secure than in the past. It is now substantially harder for criminals to take advantage of the high trust in the system.
Pro: Appeal To Niche Audiences
Bitcoin is also something worth exploring because of its appeal to niche audiences. This payment method is popular among people who want to live more outside of the system.
Many tech-savvy individuals are already using Bitcoin because they prefer holding it compared to conventional currency. Accepting Bitcoins makes it more likely that you will be able to capture this market.
Bitcoin is also popular among people who don’t like fiat currency and want to use sound money. Again, many of these individuals prefer to hold their wealth in digital assets instead of conventional dollars. Most of these individuals want more opportunities to spend their Bitcoin directly instead of having to constantly convert in and out of it.
Pro: Political Support
Another pro of Bitcoin is the emerging political support. Key figures in the incoming US administration say that they support the idea and want to make it more universal.
This conflicts with the existing status quo among the elites who challenge Bitcoin, even suggesting that using it might be immoral. The turnaround is extreme and may mean that payment methods, besides Bitcoin, also gain substantial traction.
Pro: Innovation
Finally, businesses like Bitcoin because of its innovative status. Companies accepting it often do so as a marketing tool to make themselves appear more innovative.
Cons: Price Volatility
The downside of Bitcoin is the price volatility. Sometimes, the currency loses its value fast and often halves in value before recovering and reaching new heights.
Due to this, many companies cash out of their Bitcoins as soon as they receive them. They don’t want the risk of managing them all the time or holding onto them for too long.
The good news is that there are quite a few services now that do all of this automatically for companies. But, even so, it introduces a new risk that isn’t there when transactions occur in regular fiat currency.
Con: Tax Implications
The tax implications of using Bitcoin can also be problematic. For example, many authorities view the currency as an asset, not money which was the original intention of its founder. As such, it may be subject to capital gains.
In fact, many people argue that this capital gains issue is the reason Bitcoin hasn’t replaced fiat as the currency of choice. The fact that people have to pay tax on money is outrageous, but also something that the authorities want to maintain their power.
So, whether you use Bitcoin or not is a personal business choice. It might be worthwhile if you are selling to niche audiences, but not otherwise.
Thanks for stopping by!
Magda
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