Cryptocurrencies have gained a lot of fame over the past few years and more people are becoming interested in them. Cryptocurrencies or digital currencies are means of online payment that fall under the decentralized public ledger known as a blockchain and aren’t regulated by banks or governments. The idea behind cryptocurrencies was to create a peer-to-peer transaction method over the Internet using cryptography, that won’t be susceptible to any taxes, fees or regulations.
Nowadays, cryptocurrencies are quite popular and many people believe that they are the future of online transactions. As a small business owner, you’re probably wondering how this new method can benefit your business. As a matter of fact, this new online transaction method may revolutionize how small businesses and startups develop and secure the means for their success. Here are some pros and cons of using cryptocurrency in your business that you should be aware of.
More options for customers
Every business is constantly looking for ways to make their customers happy and giving them additional payment options is definitely one of them. By accepting cryptocurrencies as means of payment, your business will be able to attract a wider customer base and maybe even outrun your competition.
Transactions are fast and secure
Cryptocurrency transactions use cryptography to ensure the safety of your transactions, Moreover, the blockchain ledger confirms and stores transactions, while making them a public record without requiring personal data to make a transaction. Furthermore, transactions happen in real-time, which means that every transaction is completed in less than 10 minutes, while credit card transactions for example take two to three days to complete.
Transactions are free
Every online transaction has an imposed fee by the medium that regulates the transactions. For instance, as a small business or a startup owner, you accept credit card payments, but you’re charged about 3% by the company that processes your credit card transactions. However, cryptocurrencies aren’t regulated by banks or governments, meaning that there are no fees on transactions when using cryptocurrencies.
Conduct business overseas
Because cryptocurrencies are decentralized from any bank or government, it has become easier to expand your business to an international market. If you are in the export/import business, then these online transactions help you avoid any government-related policies and regulations concerning payments. It also helps you avoid any additional international transaction fees or currency exchange fees. As long as your business associates accept cryptocurrency as payment, you can do business overseas with no fuss at all.
Highly volatile market
This is one of the disadvantages of using cryptocurrencies in your business, because the digital currency market is still too risky and unpredictable. High volatility makes it hard for businesses to plan ahead. If your digital assets drop in value you’ll have to wait for an unknown period of time before you can recover your losses. Moreover, the market prices can change drastically in a matter of seconds, so there is no way of accurately predicting the risks.
A risky investment
In the business world, a rule of thumb is that every investment is a risk. Whether you’re investing personal or business assets, you’re at risk of losing everything. The same goes for digital currencies. For instance, you may choose to convert your assets into cryptocurrency and use them to procure goods or supplies from other vendors.
However, your assets may be worth less than your initial investment or supplier may refuse cryptocurrency as payment because of the market’s volatility. Moreover, governments and banks still have no clearly defined approach or legislations towards cryptocurrencies, which make it difficult to calculate both domestic and international taxes, as well as import/export taxes.
Cryptocurrencies are starting to revolutionize online transactions and payment methods. Whether you should use cryptocurrencies in your business or not, is entirely up to you. However, just make sure you understand all the facts and risks regarding these transactions, before you make your decision.