The Bitcoin is a crypto currency or we can say, the digital kind of money, which was invented in 2009. It hinges on the technology system known as block chain. It keeps your bit coin wallet protected and secure from counterfeit. This digital formatted currency makes the exchange of cash faster, easier and cheaper which could benefit the many small businesses. And the technology on which it relies on does not require any bank process for financial transaction.
Reasons for considering Bitcoin:
- No Wait:Unlike bank transactions, since there is no centralise institution which checks all the bitcoin transactions so you don’t need to wait for long for receiving payment, it requires only fraction of time for transaction. And this could benefit the small business holders.
- No Fees: During merchant transaction you have pay 2 to 3 percent merchant transaction fees which could drain your cash flow. But in bitcoin transaction, it can cost you between 1 to zero percent. Also, you can accept or send the bitcoin as payment with no fees attached to it as there is no bank involvement in the transactions and you don’t need to sacrifice your money to financial foundation which owns your business loans.
- No Borders: If you purchase supplies or materials or export goods and services to abroad then you have the best solution, you can use bitcoins for dealing with foreign exchange rates, transaction fees or currencies. Reason for using bitcoin for foreign exchange is that bitcoin is not fixed to a single company or government so it can be used worldwide without any border restrictions.
- No Payment Disputes: Since bitcoin is digital and it works more with cash than credits. This type of transaction is final and cannot be challenged by a customer. If you have any problem with customer’s credit card payments then you can accept bitcoin also.
- Unregulated: It is unregulated. Although United States government has recognised bitcoin as valid but as many of the countries have banned the use of bitcoin.
- Unstable: It is unstable. Since it is not supervised by a single financial foundation, so depending upon the economy requirement, the Federal Reserve can raise or lower the interest rates, but no such option exist with bitcoin.
- Difficult to plan: Since it is a decentralised, unstable and purely digital currency, it is difficult to plan financial statements, determine your prices and figure out taxes.
Conclusion: The final conclusion is that there is a lot that bitcoin can help small business.