Here’s how the use of cryptocurrency can benefit small businesses

On Wednesday, Elon Musk tweeted about Dogecoin again – a move that sent the meme-based currency up by 25%. At 8 a.m ET, the Tesla CEO and SpaceX chief tweeted just one word: “Literally.” Attached was a photo of the meme-famous Shiba Inu in a spacesuit, planting a flag emblazoned with the word “WOW”. To follow-up just ten minutes later, the billionaire tweeted: “On the actual moon.” – in response to the first.

Dogecoin, which started as a joke in 2013, as of 10:17 a.m ET was trading higher by 23.11% to US$0.0581. This isn’t the first time a tweet from Musk sparked a rally in dogecoin, nor is it the second. The internet has coined the term “Musk Move” to capture his influence in moving prices – from Bitcoin, GameStop to Etsy.

Cryptocurrencies such as Dogecoin, Bitcoin, and other virtual currencies are on a roll and have been for the past few years, surpassing the returns seen in stocks, bonds, and most other investments. Bitcoin hit a new high in early January, reaching a price of nearly US$42,000.

JP Morgan said, in the long-term, if the market cap gets high enough that it competes with gold, the price of bitcoin could reach $146,000, in a note published in January. The company currently has a market value of over US$600 billion.

It’s clear the game of money is changing. Built on blockchain technology, cryptocurrencies have the potential to change multiple industries. Plenty of businesses such as Microsoft, AT&T, Starbucks, Whole Foods, and Wikipedia have decided to start accepting Bitcoin payments. While global adoption might be a couple of years away, there is no denying that the early adopters have a lot to gain over their competitors.

So what does this mean for small business owners? Can joining the cryptocurrency bandwagon open numerous lucrative doors for those with growth in mind? The simple answer is: yes. 

According to a survey, 39% of people would prefer the addition of Bitcoin as a payment method for general purchases.

When small businesses pick up on trends, and more payment options are offered, it creates additional appeal for customers.  It also presents small businesses an opportunity to portray themselves as up-to-date and future-focused. 

By announcing that your business is accepting cryptocurrency as a payment method, you will set your small business apart from the competition. There’s a passionate community of users that are keen on buying from and supporting a business that accepts this method of payment. 

Its digital format makes cash exchange easier and faster, eliminating the middleman (financial institutions), which makes accepting customer payments less expensive. Traditional transaction fees can prove to be a major expense, especially if your business deals with overseas orders in which two currencies need to be used. By accepting cryptocurrency as a form of payment, no currency conversion will ever need to be made. 

An added bonus is the speed and security that cryptocurrency transitions have built into them. Banks can take days to process payments, however, the blockchain behind cryptocurrencies enables transactions to be completed in the matter of minutes, sometimes even seconds. 

The fact that these transactions are verified and irreversible makes them even more secure. Furthermore, with cryptocurrency, there’s no such thing as a loan, which means the concept of debt is non-existent. Consumers paying with cryptocurrency will not be able to spend what they do not have.

Small businesses could view this as an advantage, as it prevents fraud and chargebacks that make monetary transactions clearer cut and much simpler. 

To begin accepting cryptocurrency, you will need a digital wallet that stores both private and public keys. Unique identifiers are used to mark the ownership of tokens. A number of startups such as Crypto.com, Coinbase, and TenX often platforms on which any business can trade and use their digital funds. 

While they contradict the whole idea behind cryptocurrency, eliminating the involvement of a third-party, these companies are known to provide an extra layer of safety – ensuring effective transactions. 

It’s obvious small businesses have a lot to gain as cryptocurrency grows in popularity. However, it is important to remember that the regulatory landscape is subject to change in the near future, and lawmakers are still crafting regulations that all sectors will need to adapt to. Regardless, it will never be a bad idea to start planning ahead.