Cryptocurrency is now an instant, low-cost and secure payment option for small businesses, and those that accept it can stand apart from competitors. However, cryptocurrency presents risks and a learning curve that can be difficult for small-sized business owners to overcome.
As opposed to fiat currency, which is issued and managed by central government agencies, cryptocurrency is decentralized and operates without an authority central to them. They utilize blockchain technology to keep track transactions in an immutable, secure ledger. The absence of a central authority can help lower transaction fees for businesses, which could be 2 to 5 percent versus up to 4% for credit card transactions. It also eliminates the requirement for a bank to verify every transaction, which reduces the risk on chargebacks that are fraudulent.
Demand and scarcity determine the value of cryptocurrencies. For instance, the amount of people mining Bitcoin increases the coin’s value due to the fact that it reduces the amount available to spend. Certain coins also utilize the burning process to increase their value through the destruction of some of the supply.
It is vital that business and consumers are aware of the dangers associated with the cryptocurrency industry. Any legitimate business won’t ask for money via email, text message or social media in exchange for products or services. Don’t click on links provided in unsolicited emails. These are typically phishing attempts designed to steal your computer or private information, such as username and password.