Cryptocurrency has become an instant, low-cost payment option, and small businesses that accept it can be different from their competitors. However, cryptocurrency presents risks and a learning curve that can be difficult for small-sized business owners to overcome.
Unlike traditional fiat currency, that is issued and controlled by central government agencies, cryptocurrencies are decentralized and operate without any central authority. They use blockchain technology to record transactions in an irreversible, secure ledger. That lack of a central authority lower transaction fees for businesses, which could be anywhere from 2 to 5 percent versus up to 4 percent for credit card transactions. Additionally, it prevents fraudulent chargebacks by removing the requirement for banks to validate every transaction.
The value of cryptocurrencies is influenced by demand and scarcity. For instance, the number of people who mine Bitcoin increases the coin’s value due to the fact that it decreases the amount that can be spent. Certain coins employ a process known as burning to increase the value of their coin by destroying a part of the total supply.
The cryptocurrency industry is rife with fraud and scams and it’s crucial for consumers and businesses to be aware of the risks. No legitimate business will ever ask you for money via text message, email or social media to purchase products or services. Never click on links in unsolicited emails. These are usually phishing scams to take your personal information or computer information, such as your username and password.