Bitcoin was the world’s first digital currency – also known as Cryptocurrency – and it took the whole world by storm! While you may have probably heard about Bitcoin, you may not realise that this alternative form of payment could benefit your business in so many ways. It has materialised as the most successful decentralised payment method. With its innovative aspects and cutting edge technology, Bitcoin has wholly changed business and industry and still has a long way to go. It was the world’s first Peer-to-Peer currency and has changed the conventional approach of carrying out online transactions. We believe that the most significant benefit of using Bitcoin is that it is decentralised, meaning that there is no central system or broker that controls the flow of this form of cryptocurrency.
There is no involvement of any third party which makes it as private as it could ever be. Every time a Bitcoin is spent, a block is created to record the transaction. All the transactions in Bitcoin are recorded on a publically shared cryptographic ledger called Blockchain.
Network users known as miners run computers 24 hours day, seven days a week, 365 days a year to automatically confirm any transactions that take place. Every time a miner confirms a purchase, they earn some Bitcoin for their effort. Bitcoin has been running for almost ten years now and is sufficiently well-established that many businesses in the real world already accept Bitcoin as payment for goods and services. Many other smaller cryptocurrencies have also emerged using the same or similar methods.
However, it is not all about the money. A blockchain is a series of linked transactions, all confirmed by third parties (distributed ledgers) in unchangeable blocks. The chain is formed because every transaction, known as a block contains a numerical reference to the blocks that came before. The transactions can’t be edited and, although you can see the contents of a block, you cannot automatically view all the information in the chain, which makes it incredibly secure.
How Bitcoin Can Benefit Business
There is no denying that Bitcoin could be revolutionary for your business. There are a number of reasons as to why you should adopt this decentralized payment method for your business operations. The first and most important reason to consider it for your business is the decentralized concept of Bitcoin. As we mentioned above, it is not regulated by any third party, broker intermediary or a central system like a bank. Although this did make a few of the early enthusiasts nervous, decentralization has its own benefits. You do not have to rely on any bank or central system for approving and processing your transactions. Instead, all the Bitcoin transactions are approved by miners and added to the blockchain. This has the benefit of making the process much faster and avoids you having to pay high transaction fees to the banks. You can have your transactions processed by paying a low transaction fee or no fee at all. However, paying a small fee can make the process even faster, and with Bitcoin, you have the ability to choose your own fee. Another benefit is that there is basically no risks of inflation. Inflation usually occurs when the Government issues more money over the year, decreasing the worth of the money and the purchasing power of the people. However, the Bitcoin system was created with the sole purpose of being finite (and that number is speculated to be around 21 million). This means that without the possibilities of issuing excess currency, the threat and worry of inflation comes down to almost zero. This point benefits both the seller and the buyer.
This form of cyber currency also gives you additional protection against various forms of online fraud. Because of the way Blockchain works, it is impenetrable and utterly immune to cyber attacks. You are very unlikely to get a cyber fraud email if you do choose to use this form of currency! One of the (many!) potential risks with accepting credit or debit cards, PayPal and other similar types of payment is that the payments can be reversed later on approval of the bank. For instance, it is possible for a customer who made an online purchase via a credit card to put in a request for a chargeback from the issuing bank after receiving the purchased item. If by any chance, this chargeback request is approved by the bank, the transaction gets cancelled, and the customer receives a refund of the amount they paid. This kind of fraudulent transaction is known as a chargeback fraud and sadly a common occurrence these days. The seller is then accountable for whatever losses they may end up making. Bitcoin payments, on the other hand, are irreversible, so you can rest assured that this will not happen to you.
Another one of the benefits of using Bitcoin in your business is that international transactions are much faster, with them being verified almost immediately. It is so easy to send and receive Bitcoin on an almost global basis, with no additional costs involved or any restrictions. This is just another reason why Bitcoin is an ideal choice for your business.
More and more people are shunning traditional forms of payment because of the issues that we have described above. They may not have credit or debit cards and are looking for alternative ways to pay for services and goods. By offering this additional form of payment, many businesses have seen an increase in new customers, who are drawn to the ability to use Bitcoin. Being recognised as one of the early adopters of this alternative digital payment method has attracted more customers, and as existing users are seeking places to use their Bitcoin, they will be thrilled to find that you are accepting this form of payment.
Bitcoin and other blockchain technology give you the opportunity to build a digital identity that can be used just about anywhere at any time. When it is fully adopted, there will be no need to present your passport or driving license to prove or validate your identity as all your information is held in an immutable chain.
Blockchain technology introduces smart contracts. These are agreements that are signed digitally between two parties. It is executed when certain specified conditions are met.
You can use blockchain services like Agrello to sign a smart contact without the need of a lawyer. Smart contracts are safe as you are sure that you will get your pay when you deliver your services at the agreed date. The contract agreement cannot be altered, and it is continuously monitored to make sure it delivers on its premise. Once both parties have delivered as agreed, the cryptocurrency is exchanged without both of you having to do anything, so it is much safer than going through the traditional route.
Bitcoin and other forms of digital currency’s value can only reinforce the cryptocurrencies’ reputation and status as fully-fledged and legitimate currencies that are here to stay. With so many advantages, especially for small online businesses, it is more a matter of ‘when’ rather than ‘if’ the majority of online merchants adopt it. Bitcoin and blockchain banking and technology are a massive step towards transparency in the financial sector, and is a step that can only be considered an incredibly positive move in the world of both online and high street business.