Why Small Businesses Should Turn To Bitcoin

All around the world, there are more and more companies accepting bitcoins, including such giants as Microsoft, Dell, and Overstock. Possibly, now is the time for small businesses to turn their attention to bitcoin as well.

What makes bitcoin so attractive to entrepreneurs, and why has it been on everyone’s lips for several years in a row? In this feature, ForkLog analyzes the basic advantages and disadvantages of the first cryptocurrency.

 

1. Negligible Fees

As we know, bank transactions are infamous for their high fees. As for bitcoin network, they are much lower than those of traditional organizations, and hardly depend on the transferred amount or locations of the parties to the transaction. Aside from that, there are no recurring fees, limits and other substantial restrictions. Some online wallets like Xapo don’t charge any transaction fees whatsoever.

 

2. Nearly-Instant Transactions

It takes 3 to 5 business days for a bank transaction to go through. Cryptocurrency transactions take minutes: a transaction is confirmed when miners create a new block of 1 MB, which takes around ten minutes. Bitcoin is widely criticized for instances when transaction confirmation time takes up to seven hours. Still, there are ways to bypass it as offered by Segregated Witness and Lightning Network. Their implementation is likely to enhance the network’s scalability, and therefore accelerate transactions.

 

3. Borderless Transactions

Bitcoin is beyond nation states and central authorities. It is not controlled by any organization, and it has no jurisdiction. It could help many companies go international by dramatically cutting OPEX as it requires no exchange for local currencies and losing money on omnipresent fees. Companies could accept cryptocurrency payments anywhere in the world, which would take only a couple of clicks. Aside from that, blockchain has a great potential in such areas as cross-border B2B payments where it could remove numerous intermediaries.

 

4. Security

Bitcoin network is very hack-resistant as it takes controlling at least 51 per cent of its power, which is nearly impossible as the entire network is more powerful than all supercomputers in the world combined. Using cryptography with open and closed keys makes digital asset storage and transactions truly safe. There also is the multisignature option, which allows one to require several independent confirmations to send money.

Offline storage (so-called ‘cold storage’) is the best option for long-term storage of cryptocurrency savings. In fact, it is a wallet disconnected from the network and stored in a safe place.

However, one should be extremely cautious about services offering online storage of your assets: they’re not insured against hacks and could have vulnerabilities as evidenced by notorious instances of numerous exchanges and wallets. Still, if you’re all about online services nonetheless, make sure your passwords are complex, and two-factor authentication is on (which means you have to enter your own password and a random one sent to you in a text message or in a special app installed on your phone.)

One of the most popular options here is Authenticator app by Google that generates confirmation codes. It’s available for both iOS and Android. On 2FA settings page of your online service you’ll see a proposal to scan a QR code with Google Authenticator app. Then you’ll receive a random 6-digit number you’ll have to enter to complete the setup.

 

5. New Opportunities and Advantages

Bitcoin is perfectly divisible, and it takes just a couple of clicks to send it. Smart contracts, multisignatures, and diverse services make it an attractive and convenient means of payment.

 

6. No Intermediaries

In the traditional system, the intermediaries in question are banks. Direct payments cut the transaction time, cost, and risks of errors. Notably, recent researches by Facebook and MasterCard have proven that most U.S.-based youngsters have not trust to the traditional banking system, and prefer new fintech services.

 

7. Clearing Transparency

All payments within the system are traceable down to the time of creation of bitcoins themselves. The history of transactions is stored in blockchain, a distributed database. Therefore, all incoming and outgoing payments may be traced provided a bitcoin address is known.

 

8. No Control

As blockchain is a distributed database without a central authority, nobody’s entitled to cancel or block payments, or change the supply of coins in the system. Bitcoin has no third parties or supervisors that could enforce their policies, require personal data, set limits, and interfere with the network’s operation.

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