Small businesses that accept cryptocurrency can distinguish themselves from their competitors. However, it is a risk and a steep learning curve that can be difficult for small-sized businesses to conquer.
Cryptocurrencies are decentralized and they operate without a central authority. Blockchain technology is used to keep records of transactions in an unchangeable, secure ledger. The absence of a central entity helps reduce the cost of transactions for businesses, which could be as low as 2 to 5 percent, compared to up to 4 percent for credit card transactions. It also eliminates fraudulent chargebacks by eliminating the need for banks to verify every transaction.
The value of cryptocurrency is driven by demand and scarcity. The number of people who mine Bitcoin for instance will increase its value as it reduces how much is available to spend. Some coins employ a technique known as burning to increase the value of their currency by destroying a portion of the total supply.
The cryptocurrency industry is inundated with fraud and scams and it’s vital for both business and consumers to be aware of the dangers. Any legitimate business won’t ask you to pay via email, text message or social media in exchange for products or services. Don’t open links in uninvited messages. These are typically phishing attacks designed to steal your computer or personal information such as username and password.