Cryptocurrency is a type of digital currency that can be used as an exchange between a merchant and buyer to buy goods or services. In fact, it’s considered by many experts to be the future of payments that all merchants will be required to use to keep a competitive advantage in the future. In this article we’ll cover what it is, the most popular forms, and how you can go about accepting cryptocurrency at your business.
Not only is cryptocurrency a digital currency, it’s also a technology of blockchains or digital ledgers used to record digital transactions in chronological order. There is no physical form of cryptocurrency, and so it relies on the blockchain system to store data of assets and transactions of the individual end users.
Cryptocurrency is a decentralized network without the use of banks. It is stabilized by the record of every transaction made by (p2p) -technology. Each player in the network has a record of their activity and balance.
Cryptocurrency Benefits & Setbacks
|Cryptocurrency Benefits||Cryptocurrency Setbacks|
Brief History of Cryptocurrency
Perhaps to better understand cryptocurrency we need to go back to the 90’s where the first form of digital currency was accepted. In 1996, E-Gold, which was backed by real gold, was one of the first forms that was successful. Even though the internet was still new it seemed as though it would survive. That is until thieves outsmarted the system and targeted E-Gold as their next victim, and the technology wasn’t prepared to deal with it.
Our world did not lapse venture in this new innovative technology so easily. In December of 1998 PayPal emerged as the first step in digital payments and today allows consumers to send money and pay online, and merchants to set up their own accounts to receive payments.
Eclipsing all of these digital feats, came Bitcoin in 2009. “Bitcoin is an innovative payment network and a new kind of money,” according to Bitcoin’s website. It is the first decentralized form of currency, also the first form of cryptocurrency and most widely used.
Top Cryptocurrency for a Small Business
There are many forms of digital currency to follow, using the same p2p and blockchain technologies. Today, we are only going to compare Bitcoin to two others: Ethereum and Litecoin.
Bitcoin is the first form of cryptocurrency widely used. Just like the post-it or velcro Bitcoin was invented accidentally. What Satoshi Nakamoto meant to invent was “A Peer-To-Peer Electronic Cash System”. That sounds a lot like today’s app Venmo. Instead, what he fashioned may change the way we exchange business transactions in the future.
1 BTC = 1 Bitcoin
1,000 mBTC = 1 BTC = MilliBitcoin
1,000,000 uBTC = 1 BTC= MicroBitcoin
100,000,000 Satoshis* = 1 BTC
* Satoshis are the smallest unit of Bitcoin and are named after the founder, Satoshi Nakamoto.
Ethereum is a newer form of cryptocurrency, however is expected to outlast its associates. “It is a decentralized platform that runs smart contracts: applications that run exactly as programmed without any possibility of downtime, censorship, fraud or third party interference,” according to its website.
Ethereum has even taken this technology further and is not just currency but has developed innovative components meant to drive business modernization.
Create store registries of debts or promises
Issue smart contracts
Create your own cryptocurrency
Provide organizational structure for your own decentralized application
1 Kwei = 1,000 WEI
1 Mwei = 1,000,000 WEI
1 ether = 1,000,000,000,000,000,000 WEI
If you are interested in investing in Ethereum it is still a good time to be ahead of the curve. Although you should seek advice and make decisions based on your financial advisor, this website can help offer information about its price. Its price has been on a steady increase, with a month low of $275.44 and month high of $371.22 this past month.
Litecoin was conceived from Bitcoin in 2011, its purpose was to improve the Bitcoin technology. It was considered the silver to Bitcoin’s gold. To that effect, it has been able to lessen the time to create a block to 2.5 minutes as opposed to Bitcoin’s 10 minutes. This also obviously allows Litecoin to create a larger blockchain faster for its users.
1 mLTC = 1,000 coins = millicoin
1 uLTC = 1,000,000 coins = microcoin
Comparing Bitcoin, Ethereum, and Litecoin
|Value||$ 10,623.70 USD*||$458.20 USD*||$93.65 USD*|
|Minutes to generate a block||10 minutes||Seconds, however shows as pending for 30 minutes||2.5 minutes|
|Stands out||First and most popular form of cryptocurrency||Additional features, not just a payment transaction system||Fastest form of cryptocurrency|
*Data taken from Coinmarketcap.com at https://coinmarketcap.com/
When making decisions on which cryptocurrency best works for you be sure to continue your research. Or you can be like some companies and accept all three.
Nicole Bermack of Sturm Media LLC says, “Our digital agency accepts payment in the form of either Bitcoin, Ethereum, or Litecoin. We love it- it’s easy and reliable. Additionally, as much as we’ve made from consulting, we’ve almost made that amount from the appreciation in value of our crypto holdings!
We’re big believers in the hold mentality if we can afford to do it, and we’re glad that we have been following this.”
Reasons to Accept Cryptocurrency as a Business
Here’s what companies that already use cryptocurrency as a form of transaction have to say about it.
“Yes I own one of the world’s top boutique yoga resorts and we recently started taking bitcoin and other currencies. We’ll take any cryptocurrency because we can easily just set up a wallet to accept it, and then change it to bitcoin in an exchange like Cryptopia.co.cz or Shapeshift.io,” says Geoff McCabe of Anamaya Resort.
Tim Backes’ company, Diversity Links is keeping up with the times commenting, “I run a small SEO services site called Diversity Links and we accept Bitcoin. We chose to accept crypto because many people in the digital marketing field are quite tech savvy. Also, people that are into SEO seem to be into crypto as well. We only accept BTC for now as it’s fairly easy to set up a payment portal with Stripe to accept BTC.”
“Cryptocurrencies are ideal for a travel business because the transfer happens without an intermediary taking a large chunk of it (like PayPal or Visa taking 4% or more) and all cryptos work across international borders,” Geoff McCabe of Anamaya Resort.
To reiterate how easy it is to do business with different countries Mary Clare Bland of Bespoke Digital Solutions agrees, “I own the digital marketing/content creation agency Bespoke Digital Solutions (www.bespoke-digital-solutions.com). Although I am based in Madrid, I have a global clientele. I have clients in the US, Argentina, Australia, NZ, the UK, Europe, the Middle East and India.
Because it can be difficult/expensive to make bank transfers across different regions (for example, making transactions between US-based and European SEPA accounts can be tricky, with high transaction costs faced by both parties), I started accepting cryptocurrency payments last year. I accept payments in Bitcoin and Ethereum.”
John Gilbert of Prime-Ex Perpetual uses the technology to reach new levels in his industry saying, “We have revamped the second-oldest business known to man to better fit today’s human mobility. Instead of a land developer, a home builder, a real estate agency, a mortgage broker, a mortgage servicer, and a maintenance company each trying to get rich of selling their one thing to the home buyer, we’ve combined all of these layers into one efficient package and we’ve done it in a way that limits risks to the borrower like never before.
“For our token holders, we’ve created a token that will experience more and more demand over time as more and more people need to use them to pay their mortgage payments, and they’ll need to purchase them from the existing token holders. Token holders will enjoy not only increasing demand against a fixed supply of tokens, they’ll also enjoy their fair distribution of 80% of the company’s profits for as long as they own the token. Everybody wins! We are the decentralized, token-powered real estate spaceship landing in the middle of the real estate stone age. No matter where we land, our home packages combined with our Revolution Loan has no rival.
“You have to consider all the things that we offer… a great home at a great price point inside of a great loan program that protects the borrower like never before.”
Braden Perry of KENNYHERTZ PERRY LLC focuses on the needs and trends of his clientele which brought him to the world of cryptocurrency. He says:
“Our willingness to accept Bitcoins is more of a philosophy of our firm as far as supporting our clients and supporting entrepreneurial types of businesses. We represent entrepreneurs of all shapes and sizes, from startups to innovative publicly traded companies. We have clients from coast to coast and a few clients internationally, and so it does create or allow our clients to have different options for paying us, and sometimes just providing those options is attractive to entrepreneurial types that are looking for legal services.”
Max Robinson of FishTankBank finds safety in its usage saying, “We’ve worked with quite a few freelance graphic designers and digital marketers who’ve asked us to pay in cryptocurrency (Bitcoin), and it seems to be something which is becoming increasingly popular in this space. For us it’s becoming more normal and something which we have no qualms with – I’d actually rather pay someone that I’ve never met before with cryptocurrency as I believe it’s safer.”
Lower Transaction Fees
“The transaction costs with cryptocurrencies are much lower than bank transactions. In theory, it should be simpler for customers to pay me in cryptocurrency,” says Mary Clare Bland of Bespoke Digital Solutions. Although she does agree that not everyone is on board yet saying, “The truth is that most of my customers don’t have the faintest idea how to buy currency, set-up a wallet, shapeshift or send money to another person’s wallet.” All of these incentives to use this technology are strong, it will be interesting to see what the future holds.
Step by Step on how to accept online payments
You need equipment, either a mobile device or a POS machine to make transaction.
Setup a virtual wallet. Coinbase is a great example of a trusted trading site that can help you setup your wallet.
Go through all of your current POS, cash register, online shopping cart, etc. and integrate the cryptocurrency option.
4. Get the word out
Let your customers know that you are now accepting cryptocurrency payments. Put up a sign, put it on your Facebook and website.
5. QR Code
To make the actual transaction a QR code will come up that you have to scan
How it Works in 6 Steps
1. Transaction requested
2. Nodes in a P2P network receive request
3. Validation through the work of the nodes is accomplished with an algorithm
4. Transaction is combined with other information to create a block of data
5. New block is added to others in a permanent blockchain
6. Transaction is completed
Blockchain: continuous growing list of records, each new record is referred to as another block
Block: files recorded that contain data made in each transaction made between two parties
Ether: Currency used within Ethereum
P2P-Technology: peer to peer technology
Litoshi: the smallest unit of Litecoin
Satoshis: the smallest unit of Bitcoin
Smart Business Hack
Cryptocurrency is still not widely used, to become an ecommerce company that accepts cryptocurrency now would be innovative and ahead of the curve. It is better to get involved now more than ever.
To start accepting Bitcoin click here.
To start accepting Ethereum click here.
To start accepting Litecoin click here.