These days you might have heard that many businesses are using bitcoin as a payment method. Bitcoin is a technologically advanced digital currency that lies outside the management of traditional banking and government systems.
If you want to invest in bitcoin for your business, you need to be aware of the advantages and disadvantages of bitcoins. Get details about bitcoin investment : how can bitcoin make you rich
Advantages of bitcoins
Following are the major advantages of using bitcoins:
Low transaction fee
When you use your credit card or debit card to make any payment, you may need to pay a transaction fee between 2% to 4%. Most small businesses that want their customers to not pay any transaction charges can look for bitcoins as a payment method. The main reason behind this is that bitcoin charges are quite low. Most bitcoin third-party vendors charge 1% or less for each transaction. In addition to this, since no middlemen are involved, you don’t have to worry about any processing fee.
Quick and easy payment option
Another important benefit of using bitcoin for your business is that your customers can make quick payments. All types of transactions in bitcoin get completed within a few minutes. In addition to this, bitcoin payments are also translated to cash quicker than card payments. In the case of credit card and debit card payments are locked for one or more days, and they are kept in custody. This means, if anyone asks for a refund, the payment can be refunded. But, nothing of this sort happens when you are using bitcoin as a method of payment. Thus, for quick and easy payment options, nothing can be as good as bitcoins.
No hassles of billing
All types of purchases that you make by using bitcoins are final. Thus, companies can save money differently. Another important point is that your customers can’t challenge any transaction. Thus, as a business or a company, you are safeguarded against all types of fraud.
Simple for an international trade
If you are involved in any type of international business, bitcoin can be a good method. The rules of debit cards and credit cards differ from one country to the other. But, when you use bitcoin, you don’t have to worry about any international law. No foreign transaction charges are applicable for bitcoins. Thus, even a small company or a startup can easily accept international payments without paying any transaction fee.
Disadvantages of bitcoins
Bitcoins also come up with many disadvantages. Thus, as investors and business person, you also need to be aware of the disadvantages associated with bitcoins:
The biggest disadvantage associated with bitcoin is that it is a volatile currency. The biggest volatility in bitcoin was witnessed in 2013 when the price of bitcoin rose from $13 to $1000. Thus, if you are not a risk-taker, investing in bitcoin may not be the best option.
Most business people don’t use bitcoin for everyday transactions because they are not sure about the security features of bitcoin. If you use a bitcoin wallet and by any chance, if you forget the password of the bitcoin wallet, you will lose all bitcoins. In addition to this, different types of threats are also caused by spammers and hackers. Thus, the lack of security is one of the major disadvantages associated with bitcoins.
Fiscal rules and rates
In many cases, acceptance of bitcoin may be a headache for tax payment. In case of an increase in the value of bitcoin from time to time, the merchant has to pay capital gains tax. Thus, companies need to maintain track of every transaction. This may be a cumbersome task for many businesses.
Return on investment
The increase in the price of bitcoin and the acknowledgment of Bitcoin as a potential investment show that it offers a good return on investment. But, since lots of hassles are associated with the bitcoin investment, you may not get the expected return on investment when you rely only on bitcoin investment.
So, these are some of the major advantages and disadvantages associated with bitcoins. Make a wise decision by going through this list of advantages as well as disadvantages. Let us know if you want to know more about bitcoins.