Pros and Cons of Accepting Crypto as Payment

Cryptocurrency is a digital currency that can be exchanged for different types of goods and services. It is an emerging market that enables you to get more exposure to the global economy while also providing new possibilities for making payments via the internet. This article aims to discuss how accepting cryptocurrency will benefit your business or organization, as well as some of the challenges associated with running a cryptocurrency-based enterprise!

What is cryptocurrency and how does it work

Cryptocurrency is a digital currency that uses cryptography to secure its transactions and to control the creation of new units. Cryptocurrency is decentralized, meaning that it is not subject to government or financial institution control. Bitcoin, the first and most well-known cryptocurrency, was created in 2009. Bitcoin, like most cryptocurrencies, operates on the blockchain. The blockchain is a digitized, decentralized, public ledger of all cryptocurrency transactions. All Bitcoin transactions are recorded on the Bitcoin blockchain; this ensures integrity while also enabling users to remain anonymous.

Conversely, traditional payment systems require trusted third parties to facilitate transactions (e.g. banks). These third parties are often referred to as centralized authorities and can pose a threat to privacy. Cryptocurrency eases the process of making digital payments by eliminating this need for centralization and thus bypassing any third-party authority (e.g. banks).

There has been an increase in the number of businesses recently accepting Bitcoin as a form of payment. Some notable examples include:

Microsoft, Overstock.com, Travala, Paypal, CheapAir.com, Dallas Mavericks, KFC Canada, & Burger King Venezuela (to name a few).

Benefits of accepting cryptocurrency

There are many reasons why a business or organization should consider accepting cryptocurrency as a form of payment. Some of the key benefits include:

1. Increased global exposure

Bitcoin and other cryptocurrencies are global currencies that can be used to pay for goods and services all over the world. By accepting Bitcoin, your business or organization can tap into a global market of potential customers.

2. Reduced transaction fees

Cryptocurrency transactions are much cheaper than traditional payment methods (e.g. credit cards, Paypal, etc.). This is because there are no third-party intermediaries (e.g. banks, payment processors) involved in the transaction process. This can save your business or organization a significant amount of money in transaction fees!

3. Protection from fraudulent activity

Cryptocurrency transactions are irreversible and secure (i.e., less likely to be subject to fraud and hackers). By using Bitcoin or other cryptocurrencies as a form of payment, your business or organization can enjoy increased protection against these types of issues!

4. Privacy benefits

Bitcoin users within the Bitcoin network are anonymous by default. This enables users to protect their identities while also preserving privacy in the transaction process. However, since Bitcoin transactions are recorded on the blockchain, there have been companies that have emerged to analyze and track transactions. Ultimately, if you use a centralized exchange that uses KYC (know your customer), transactions can be analyzed and led back to you.

Challenges associated with running a cryptocurrency-based enterprise

Running a cryptocurrency-based enterprise comes with a number of unique challenges. For starters, the volatility of cryptocurrency prices can make it difficult to predict how much revenue your business will generate from day to day or week to week. In addition, there is still a lot of uncertainty surrounding the taxation and regulation of cryptocurrency enterprises, which can make it difficult to stay compliant with government regulations. Finally, the security of cryptocurrency-based businesses is often a major concern, as cybercriminals are increasingly targeting these entities in order to steal their digital assets.

In terms of taxation and regulation, this one is still a bit up in the air. What we do know for certain: all cryptocurrencies are typically viewed as commodities and transactions involving them will be taxed like barter transactions — i.e., they'll be taxed based on their fair market value at the time of the transaction (the rules that would seem to apply to regular cryptocurrency transactions between individuals or businesses would also appear to apply here). We don't know how the government will regulate cryptocurrencies (e.g., whether certain types of cryptocurrency business activities will be regulated differently than others, etc.), but it's possible that those seeking more clarity either for themselves or on behalf of their customers can turn to resources provided by state governments.

Security, not surprisingly, is a major issue with cryptocurrency businesses. In this field, the most important thing to remember is that you should follow all applicable laws and regulations with respect to cybersecurity — whether or not they exist yet. Make sure that your transactions are compliant with know-your-customer guidelines (KYC), anti-money laundering guidelines (AML), and other relevant rules. And, since you never know what might happen tomorrow, make sure that your current security practices are up to snuff.

That said, the cybersecurity threats facing cryptocurrency businesses are often different from those facing other types of companies in one significant way: criminals tend to be much more interested in stealing your cryptocurrency than your customers' credit card information. This means that you should be more concerned about things like phishing, SQL injections, social engineering, and other non-traditional cyberattack vectors.

In Summary

Cryptocurrency provides a number of benefits for businesses and organizations, including increased security, privacy, and protection against fraud. However, running a cryptocurrency-based enterprise also comes with a number of unique challenges that must be taken into account. In order to stay compliant with government regulations and protect your business from cybercrime, it is important to follow all applicable laws and implement robust cybersecurity measures.

At DigiGrowth Marketing we strongly believe that cryptocurrencies will bring a major benefit to businesses long-term and to financial freedom to the masses. We happily accept cryptocurrency as a form of payment! For more information on our services visit the website digigrowthmarketing.com or email us directly at [email protected].