To Bitcoin or not to Bitcoin… that is the question
Bitcoin has had its ups and downs over the last few years – 2013 saw its value peak at $1,200, but at the time of writing the value sits at $447 – and some have decided this means Bitcoin is on the way out. But with the unveiling of the first Bitcoin debit card last year, there are whisperings that 2016 is the year this cryptocurrency really starts to take off, not just in niche online communities, but out “there” in the “real world”.
When it comes to the relationship between your business and Bitcoin, there are a whole load of reasons why it could be beneficial to start accepting this currency, and a few things to be cautious about too. So let’s do the crypto conga with our trusty friend the Pro-Con List.
PRO Totally international, at no extra cost
Consistently one of the most-celebrated advantages of Bitcoin is that it’s considerably cheaper to work with than major credit cards (taking only a 1% transaction fee), simpler to set up, and it costs as much (or rather, as little) to transfer large amounts across continents as it does to transfer a tiny amount to the house next door. What this means for your business is that the moment you start accepting Bitcoin, you are essentially international.
A major drawback of Bitcoin as a currency for everyday use is the steep rise and fall in value that can happen at the drop of a hat. This isn’t ideal for people who want to use it as a means of currency rather than for speculative investment, but it can’t be helped in these early days, when one big enough transaction is enough to affect the value of the whole currency.
Even though this is technically a con, it could actually work in your favour if you’re interested in holding onto your Bitcoin and seeing if the price goes up. But if you’re not wanting to use it this way, there’s an easy way to get around the fluctuation issue. That is, exchanging your Bitcoin as soon as you get them. Appointedd’s payment processor of choice, Stripe, actually does this for you automatically, so your client can pay in Bitcoin and you get pounds or dollars in your bank account.
PRO Bypass the bank
The USP of cryptos is that they are completely decentralised and peer-to-peer, which means transactions made with Bitcoin don’t go anywhere near a bank. This is appealing to a lot of people, either for practical or ideological reasons. For a start, Bitcoin is a way of accepting online payment from someone without a bank account. It also means that the problem of chargebacks (as can occur with credit card transactions) is totally wiped out, since a Bitcoin exchange is as final and undoable as a cash exchange. And, as mentioned earlier, Bitcoin transfers are far cheaper to accept than debit and credit card payments.
CON Tax complications
This is more just a heads up than a full-blown con. Bitcoin is different to other currencies (in case you hadn’t realised yet) and so it requires some careful attention when it comes to tax returns et al. It probably helps to think of Bitcoin transactions as similar to cash transactions (in that they’re anonymous), but it’s important to be aware of the fluctuation in value as well.
FYI: The IRS recognizes Bitcoin not as currency but as property, and taxes it accordingly. HMRC does not, but you should keep up-to-date with changes since cryptocurrencies are ever evolving.
PRO Free publicity
Probably the biggest, and most immediate, benefit of accepting Bitcoin is that it brings your business to the attention of whole new community of consumers. Check out this directory of places that accept Bitcoin – once you become part of that circle, you may find that you gain a potentially big number of loyal clients who will bring repeat business.
Getting in on this new tech could also create a real buzz around your product and service, even before you take your first Bitcoin payment!
So, if you think the Bitcoin road might be for you, why not start by looking at this step-by-step guide to launching your business into the crypto world. Good luck and godspeed to you, entrepioneer!