As a business owner, it’s likely you’ve heard a lot about bitcoin over the last few years. From Elon Musk flip-flopping between liking and loathing this as a payment method to the Central African Republic recently becoming the second country to approve bitcoin as a legal tender, there is a growing fascination with this currency.
But have you considered bitcoin as a form of tender? Do you ever think it might be a useful addition to your financial operations? If you want to find out more, read on.
Why introduce bitcoin?
The last two years have seen a shift towards digitising economies around the world and we’re becoming open to new cryptocurrencies
According to recent research, 30% of UK consumers are planning on using crypto as a form of payment this year. With more people growing in confidence when it comes to digital currency, it might be worth joining them.
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As well as opening up your business to a crypto-savvy shopper, you’re also placing yourself firmly among competitors. With more businesses allowing for alternative payment options like open banking solutions, there is something of a race on to keep up. Therefore, by giving customers the chance to buy with bitcoin, there is that additional option that could give you the edge.
The pros and cons of bitcoin
Before we go into how to set up bitcoin for your business, it’s important that you know the pros and cons involved.
By accepting bitcoin you’re increasing your reach. In fact, you can go international as bitcoin is rapidly becoming a form of payment that is attracting people from different countries.
Additionally, you’re adding a level of security to payments. Bitcoin – and other types of crypto – are secured by blockchain. This digital ledger includes information about financial transactions, who is making the transactions, and a unique code. As this is such sensitive information, it can’t be changed easily, making the risk of fraud minimal.
However, there are issues to consider. First up, security. The risk of fraud is significantly reduced thanks to blockchain and the lack of third-party verification that comes with debit and credit transactions. But there is an increased risk of cyber attacks as crypto grows in popularity.
There are other ways digital currency can be corrupted, too. For instance, illegal funds can be transferred to crypto wallets, making the recovery of funds difficult. According to the FBI’s recent internet crime report, this type of criminal use of cryptocurrency was in the top three most-reported incidents last year.
So, there are plus points and some negatives to consider. What next?
Steps to accepting bitcoin
We’ve just mentioned the wallet. While there are issues there, this remains a secure way to access the blockchain. It’s software that stores your private key that gives you access to your balance and sends and receives money.
There are different types of wallets available and the one you choose will depend on what you need it for. Hot wallets connect to the internet and are probably easiest to access on the go, or there’s a desktop wallet that, as the name suggests, can be accessed from your computer’s desktop via software you download. Mobile wallets are connected via an app and web wallets are browser-based.
Cold wallets don’t require internet access and are less likely to be hacked as a result. Hardware wallets fall into this category and are offline until you connect them to your computer.
Once you’ve chosen a wallet, you can set up accepting payments. Look out for fees and any issues around the countries the payments are coming from.
Research what works for your organisation before you dive into accepting bitcoin.