Everyone is talking about cryptocurrency and Bitcoin is its naive boy. In 2021, Bitcoin reached one milestone after another. While not mainstream just yet, it is definitely gaining momentum to eventually enter.

What gives the Bitcoin craze a certain legitimacy is that there are now well-known companies that accept Bitcoin as a valid means of payment. That’s right, Bitcoin payments are accepted by trusted companies, which is a sign that the cryptocurrency now has more favorable views than it did before.

Companies that accept Bitcoin include Starbucks, Microsoft, Etsy, Rakuten, PayPal, Whole Foods, Home Depot, BMW, AT&T, among others.

But the question that needs to be asked is: should your company also accept Bitcoin as a means of payment?

What is bitcoin

Bitcoin is a type of cryptocurrency. This is a “decentralized” currency, meaning that your transactions are carried out directly from the buyer to the seller. The transactions are not controlled or monitored by outside regulators such as a government or a central bank.

Bitcoin essentially eliminates the need for a middleman to process payments that one makes. The currency is stored in an online wallet that only the user has access to. It uses what is known as a blockchain, essentially a public ledger, to record all transactions in a time-based order. This reduces the risk of fraud as, according to experts, once recorded, transaction details cannot be changed.

The benefits of accepting Bitcoin as payment

There are some real advantages to using Bitcoin and accepting such payments. Here are the things small businesses should be aware of:

Reduced transaction fees

If you accept any form of online payment, you are already aware of the onerous transaction fees or usage fees that you have to pass on to the payment processing platform. Credit card transaction fees are no less painful for many companies, although bank fees are a thorn in their side.

And since people are all about digital wallets and payments these days, cash transactions are steadily declining. So, depending on the payment method and platform you use to process these payments, your company could end up paying 2-4% of the transaction fees alone.

Bitcoin payments take that out of the equation. Most bitcoin and cryptocurrency payments have very low to no transaction fees. Indeed, over time and transaction volume, you would achieve significant savings as you would not have to pay an intermediary for online and card payments.

Protection against chargebacks

Since Bitcoin works on the concept of decentralization, once a transaction has been processed, it cannot be returned. It’s like a cash transaction in that sense, and all payments made are final and irrevocable.

Many companies and merchants experience this recurring chargeback problem. With Bitcoin payment, the decision to reverse a charge rests solely with the company and not with a third party provider.

International payments become a lot easier

If your company has international customers, you already know the hurdles you have to go through in order to be able to accept payments from another country. It’s not a pretty picture.

Accepting international payments is not only complex, but also usually very slow. Bitcoin payments change that completely. Payments are processed within minutes and your company can easily accept payments in Bitcoin from any corner of the world.

Bitcoin payments are super safe

Due to the decentralized and public ledger nature of Bitcoin, it is difficult to play around with their transactional information. The transactions once made are final and cannot be changed or deleted in any way.

Bitcoin can be an investment

Bitcoin has a limited capacity, which means that only so many of them can be mined. Once this threshold (of 21 million) is reached, no more can be created. When supply is scarce, demand automatically increases.

Holding the bitcoins your business receives in payment can create a godsend when the time is right.

The not-so-great aspects of accepting Bitcoin as a form of payment

It is not all good, however. There are a few pitfalls to be aware of when considering accepting your business payments in Bitcoin.

The market volatility of Bitcoin and cryptocurrency

Due to its nature, there is no official regulation of Bitcoin. But the lack of regulation leaves it open to market forces to decide the price of Bitcoin. This is not something that companies would ideally want.

If the value of Bitcoin has gone down from the time you received it to the time you converted it to dollar value, your business will lose.

State measures and official sanctions

Cryptocurrency and Bitcoin are legal in the US. But there are no laws to regulate it, although some are now being crafted. This creates some uncertainty and questions about how to consider policy changes and government measures to use Bitcoin and cryptocurrency for businesses.

Taxes on Bitcoin and Cryptocurrency

The IRS is now asking companies and individuals to declare their Bitcoin activities. It has introduced tax rules by classifying profits generated through Bitcoin as capital gains and taxing them as such.

If you’re a business, this adds an extra shift of work to figure out all of your Bitcoin transactions and report them on your tax forms during the tax season.

Then what should a company do?

Bitcoin is still in the making. Lots of people don’t know how it works, and it still hasn’t proven reliable.

However, it is quickly gaining ground and could soon be actively considering and accepting even more companies as a means of payment. It depends on the particular company and whether you feel like experimenting with this trend or taking advantage of it, it appears to be attracted to the company.

It really depends on if it’s something your customers want. Why go to all the trouble when nobody asked you about it. But if it does, it is worth figuring out how to do it for your business.

One thing is certain, however – the digital currency is our new future. This fact cannot be denied. And being at the top of Bitcoin has an advantage. If your business accepts payments in Bitcoin, you can potentially make a profit from it.