Accepting Cryptocurrency at Your Business
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- December 28th, 2017
As the goldrush Bitcoin phenomenon sweeps the world, are you on the right side of history? Accepting payments in cryptocurrency can give your business an additional stream of revenue. It will also grow your clientele to include those people who are most in touch with digital currencies.
What is Cryptocurrency?
Cryptocurrency refers to all digital currencies that use blockchain technology. Bitcoin is the most popular. All other currencies are commonly referred to as "alt-coins", as in, alternatives to bitcoin. Crypto is easily transferable from one individual to another. It can even be used to make purchases from vendors, just like USD.
Understanding What a Ledger is
When you transfer money out of your bank account to a different account, your bank keeps a record of the transaction. The copy of all your transactions is called a ledger, and you can access your specific transaction through your online account. Your bank account shows how much money is in the bank, which accounts it is in, and the history of all deposits and withdrawals. Your accounts are part of the larger ledger that keeps track of every deposit and withdrawal occurring in the bank.
The bank is the only entity that has complete control over the ledger. It is stored in an internal database. You, and everyone else using a particular bank trust in the bank's ability to keep the ledger accurate and secure.
Because there is a single entity controlling the ledger, it makes auditing each bank account fairly
When it comes to the blockchain, there is a ledger recording every transaction made but every individual on the network holds a copy. This is referred to as a distributed ledger.
The difference between blockchain and banks is the lack of centralized authority controlling everyone's ledger. Instead, each person's ledger holds a copy of every transaction that has ever occurred on the blockchain. Every person who accesses the blockchain and conducts a transaction is both adding to the blockchain and hosting the blockchain. This creates a decentralized method of transactions that cannot be controlled by a bank or a government.
The only way to destroy the blockchain would be to shut down the internet — which is unlikely to happen.
The Value of Crypto
The inherent value of crypto is because it is decentralized. There are no government regulations or institutions slowing the flow of money. There is no such thing as a bank holiday to prevent transactions from happening. Everything is done peer-to-peer and it makes transactions more efficient, easier, and cheaper.
As a business owner, having access to capital that is faster than the dollar and ultimately unable to be controlled by the government is inheritable valuable. With crypto, you can make a sale without credit card fees, bank processing times, or failed card readers.
Marketing Benefits of Cryptocurrency
By accepting crypto payments, you are announcing to the world that you are onboard with the blockchain movement. Although growing rapidly, it is still a small enough community where word travels fast.
Launching a short marketing campaign around your acceptance of crypto as payments can quickly catch the attention of an entirely new demographic. Those who are heavily invested in the crypto marketplace are always looking for real-world applications. Selling products or services for crypto creates value for the currency. You profit by accepting crypto and those who have crypto profit by spending it. Businesses have lucrative opportunities to show inherent value and utility in the real-world application of crypto.
Embracing Technology as it Rapidly Advances
As the 21st century marches forward, computing power continues to accelerate. Observing Moore's law, businesses will continue to feel the rapid advance of digital technologies. Blockchain and cryptocurrencies is a revolution in economics not seen since the advent of fiat currency.
With bitcoin becoming a household name, digital currencies are only the beginning of what blockchain technology can provide. The potential for peer-to-peer communication is almost unlimited.