Guest Post by Owen Andrew - Given the many advantages offered by Bitcoin in terms of speed, convenience, efficiency and security, there’s reason to believe that bitcoin may start to play a central role in the world of small business. As of right now, a number of major companies accept bitcoin for payment, but bitcoin still has much progress to make before becoming a mainstream currency. Let’s take a look at this cryptocurrency which may end up revolutionizing the way that we conduct business.
Bitcoin is a fully “digital currency” which means that it does not have any physical reality. In order to store and transfer bitcoin, users have to establish a digital wallet which is protected with a key code. Setting up a digital wallet is relatively easy, and sending bitcoin as payment is very simple. Bitcoin is the most well-known cryptocurrency to date, but there are several other cryptocurrencies which are gaining traction. Two other, lesser-known cryptocurrencies which are on the rise are Ethereum and Litecoin.
As mentioned, bitcoin offers a number of key advantages over traditional currency. For one, the transaction fees involved with bitcoin are typically much, much lower; when bitcoin is sent, senders incur fees as low as one to zero percent! Bitcoin also has no government affiliation, and so users can transfer funds between international borders without any additional delays. What’s more, bitcoin transactions can be executed extremely fast – it’s possible to have a multimillion dollar transaction fully verified in just minutes. With its sophisticated cryptography system, bitcoin also offers a greater level of security when transferring funds.
Bitcoin does come with risks, of course. Since bitcoin lacks government support, there is no guarantee that it won’t be abruptly shut down at some point in the future. Also, bitcoin’s value has fluctuated wildly since its introduction in 2009: at its peak, bitcoin’s value approached $19,000 per coin, but right now it’s value is in the mid $7,000 range. There have been quite a few rapid drops in value, not only for bitcoin but for other cryptocurrencies as well. Hence, small business owners who choose to take the bitcoin route could end up losing in a big way. At the same time, however, bitcoin’s market value may skyrocket, and so selecting bitcoin could also turn out to be a great investment in the long-term.
There is a still a bit of uncertainty as to the exact role bitcoin will play in small business. For more information on bitcoin in the world of small business, please take a look at the following infographic: