Accepting Digital Currency
Accepting Digital Currency
If accepting digital currencies as a payment option in your petite business is a decision you have been considering, it is likely you have heard of an e-currency called bitcoin. Bitcoin is both a unit of decentralized e-currency and a payment system itself. Users of the bitcoin network use digital wallets (which can be installed on their computers and/or mobile devices) to exchange bitcoins as you would other currency to buy goods and services. Bitcoin transactions are publicly tracked on a block chain—a intensely encrypted public ledger. This ledger permits merchants to validate that the customer has the amount of bitcoins necessary to make a purchase. This article offers the pros and cons of accepting digital currency such as bitcoins.
Bitcoins are Increasingly Popular with Consumers and Merchants.
Bitcoins are set up in a way that suggest users finish security and anonymity. They are also utterly difficult to counterfeit and are limited to only twenty one million bitcoins ever, assuring that the digital currency will never be victim to inflation. Since digital currencies such as bitcoin are decentralized, they can be used to purchase goods and services anywhere in the world without the regulations that come with currency — the U.S. government classifies this digital currency not as currency but as property. Some experts even suggest that bitcoin could become the fresh gold standard.
Popular merchants that accept bitcoin include Amazon, Overstock,com, NewEgg.com and Expedia.com.
Accepting Digital Currency Can Benefit Petite Businesses
Puny business owners often find that accepting digital currency is good for their business due to the almost nonexistent transaction fees involved in accepting these kinds of payments. Sales involving bitcoin transactions are also very quick and effortless to process. Digital currency is also relatively fresh. As one of a relative petite number of businesses which accept the digital currency, accessing the untapped demographic of the bitcoin holder could prove to be a very lucrative business decision.
Bitcoin has a Volatile Exchange Rate and Some Hacker History
While being a decentralized e-currency can have some advantages, it can also have a pretty serious disadvantage when it comes to exchange rates. Bitcoin has been known to practice dramatic fluctuations almost daily. That means that the $30 worth of bitcoins you accepted for your product yesterday might be worth half of that (or less) tomorrow. While the U.S. government supposedly views bitcoins as property and not currency, that did not stop the Department of Homeland Security in two thousand thirteen from seizing the assets of Mt. Gox Bitcoin Exchange, which once treated 70% of bitcoin transactions. This same exchange went insolvent in 2014, right after hackers stole $375 million worth of bitcoins from Mt. Gox’s customers.
Accepting digital currency is a proposition which has very real positive and negative aspects. The increasingly popular e-currency bitcoin has been hailed as a possible fresh gold standard, with offerings of anonymity to its users and security and anti-counterfeiting inherent in its coding. Bitcoin is also inflation-proof and is a common sense currency for purchasing goods and services across the world. There are some negatives to accepting digital currency, including the propensity for volatile exchange rates and the lack of regulation, which may not last in an increasingly regulated world. In the eCommerce industry, it would be prudent to keep digital currency in mind, even if you determine to wait and see on implementation.
Are you experiencing chargebacks in your online store? Are your consumers abandoning their carts before buying? Learn how Cardinal Consumer Authentication can eliminate fraud and false positives, and provide the benefits of 3-D Secure with friction-free checkout for your buyers. One Connection to Cardinal drives digital commerce. Download the brochure now.
Liked this article? Share this article:
Accepting American Express Next Lesson: