What is Cryptocurrency and Should Your Business Accept it?
Cryptocurrency was first invented in 2009 as an alternative to traditional forms of money and has only gained popularity since then.
What is Cryptocurrency?
Cryptocurrency (or crypto, for short) can be thought of just like any other kind of currency. It can be exchanged for goods and services. Cryptocurrency is different from traditional currencies in that it is not regulated by a central authority like the US Dollar and Euro. This makes it possible for cryptocurrency users to transfer money instantly, globally with low fees. Because there is not central authority, anyone can participate. A system called Blockchain keeps track of all transactions of any given cryptocurrency in order to prevent system failure. Popular cryptocurrencies include Bitcoin (the first cryptocurrency created), Ethereum, and Litecoin. Recently a newer currency called Dogecoin came into the spotlight in part due to popularization by tech mogul, Elon Musk.
Should Your Business Accept Crypto?
Maybe. Larger international businesses might have more of an incentive to accept crypto because it provides and alternative to accepting payment in numerous other currencies. Cryptocurrency is advantageous because transfers are instant and there are low fees.
There are, however, major drawbacks to accepting cryptocurrency. Hacking remains a major concern for crypto users. Crypto has also been used for illegal transactions because its users can stay anonymous. The most significant obstacle for business owners accepting crypto is its extreme volatility. Because cryptocurrencies lack central regulation, their prices can rise and fall unpredictably.