The entire world knows that Cryptocurrency is becoming the next big thing in the financial industry which has the power to disrupt major financial institutions. Yet the knowledge about cryptocurrency remains absolutely dull among people.
Cryptocurrency is a digital asset developed using block-chain technology which has a certain value attached to it. The technology is such that it makes the transactions secure and innovative, which is why is has gained momentum among businesses and consumers alike.
Traditional payment methods take quite long to get cleared through banks, however, cryptocurrency, such as Bitcoin, enables instant and borderless transactions. Another major advantage remains that it a universally recognised form of payment which prevents it from being affected by the exchange rate of the various countries.
Accepting cryptocurrency as a new form of payment for transactions in B2B and B2C businesses is becoming the new norm and businesses are beginning to recognise the advantages of using this as a payment method. However, small businesses still doubt whether they should accept this new technology or not due to its newness and mainly due to lack of knowledge.
One should stay updated about cryptocurrency before deciding whether one should use it or not. ZEEX – Cryptocurrency Magazine is a website where you will find a plethora of information on all details regarding cryptocurrency.
This article describes what cryptocurrency means for small businesses.
Advantages of accepting cryptocurrency as a form of payment:
- Security- The blockchain technology that cryptocurrency is based upon makes the transactions absolutely secure since they cannot be reversed or overridden. The method of payment remains very simple since cryptocurrency does not offer debt and therefore, there is no scope for over-spending. Such kind of security prevents frauds and provides protection against chargebacks.
- Increasing customer base and sales- Cryptocurrency is a form of payment that is accepted throughout the world. This increases the chances for small businesses to open their doors for international clients without worrying about the difficulty of currency exchange that involve high costs of transaction and require too much time.
- Low transaction costs- Transaction of payments require a lot of time and money which becomes a major disadvantage for businesses that operate globally. Since cryptocurrency is not yet governed by any regulatory authority, it does not involve any transaction costs and are substantially faster than banking institutions.
Risks involved:
- Uncertainty- Being an absolutely new sphere of technology, cryptocurrency lacks any form of regulatory guidance. Once the method gains popularity, it will eventually encourage lawmakers to draft regulations for it. Till then, any form of reporting is not possible whether it be regarding taxes or the gains that are secured by people.
- Volatile nature- The nature of value of cryptocurrency remains severely unpredictable. The value of bitcoin has rose from pennies to $20,000 within a span of merely nine years.
- Technical instability- Since it is quite a new venture, technical barriers exist in the functioning of cryptocurrency, especially in relation to the digital wallets used by people. Small businesses may face the wrath, in case any technical disadvantage may occur, which cannot be avoided due to the rapidly changing technology nowadays.
Adaptability is essential for small businesses if they want to take full advantage of cryptocurrency. This can be highly advantageous if small businesses become capable of surpassing basic problems such as technical issues and the other risks. Cryptocurrency has growing potential of dominating the financial industry soon.
