What is it?
The truth is Bitcoin is a hard concept to understand. It completely changes the way we think of transferring monetary value. The good news is that you don’t need to understand how it works to understand the benefits it offers. Bitcoin is a consensus network that enables a new payment system and a completely digital money. It is the first decentralized peer-to-peer payment network that is powered by its users with no central authority or middlemen. From a user perspective, Bitcoin is like cash for the Internet. Over $50 million is transferred every day over the Bitcoin network, and it is constantly growing.
To learn the finer details
Bitcoin’s design allows for it to process transactions using a distributed payment network that is extremely low cost. The average transaction fee is .0001 Bitcoins, which is currently about 6 cents. It is even possible to send transactions for free that do not require instant verification! This is a stark contrast to accepting credit cards, which cost most small businesses about 2.9% + 30 cents. A business can either keep the bitcoin, or have it instantly converted to dollars using a service like Bitpay to avoid the risk of holding the value of Bitcoins which can fluctuate from day to day.
Protection against fraud
Any business that accepts credit cards or PayPal knows the problem of payments that are later reversed. Chargeback frauds result in limited market reach and increased prices, which in turn penalizes customers. Bitcoin payments are irreversible and secure, meaning that the cost of fraud is no longer pushed onto the shoulders of the merchants and consumers.
Fast international payments
Bitcoins can be transferred anywhere in world in 10 minutes. In fact, Bitcoins never have any real physical location, so it is possible to transfer as many of them anywhere with no limits, delays, or excessive fees. There are no intermediate banks to make you wait three business days.
No PCI compliance required
Accepting credit cards online typically requires extensive security checks in order to comply with the PCI standard. Bitcoin still requires you to secure your wallet and your payment requests. However, you do not carry the costs and responsibilities that come with processing sensitive information from your customers like credit card numbers. The complications of keeping the transaction secure is easily offloaded to a bitcoin payment processor for no fee.
Get some free visibility
Bitcoin is an emerging market of new customers who are searching for ways to spend their Bitcoins. Accepting them is a good way to get new customers and give your business some new visibility to an appealing demographic. The Bitcoin demographic is 88% male and the average age is 32. Nearly half of the people who use Bitcoin have annual incomes of $50,000 and above. More than one-third have incomes over $100,000, and more than a quarter make more than $150,000.
Many organizations are required to produce accounting documents about their activity. Using Bitcoin allows you to offer the highest level of transparency since you can provide information your members can use to verify your balances and transactions. Non-profit organizations can also allow the public to see how much they receive in donations.
At this point Bitcoins are by no means a replacement for accepting credit cards and other standard forms of payment. However, it offers a unique opportunity to attract new customers and add a little extra to your bottom line.