Cryptocurrency is the latest breakthrough in online commerce. This online money source is getting more and more attention in today’s business world.
It has no bank or governmental controls. Cryptocurrency functions on a network of volunteer digital systems to maintain it.
If you’re a business owner considering this innovative payment method, then this article is for you.
Check out this article on cryptocurrency for beginners. Learn how it’s changing our traditional monetary system. Then, you’ll know if it’s right for you.
Cryptocurrency for Beginners: What is it?
Cryptocurrency is open-source software. This software allows a group of online members to buy services or goods from each other.
Members of this association are “miners.” Miners create the electronic monetary units. Then they validate any transactions on encrypted general ledgers known as a “blockchain.” The first cryptocurrency unit created was the bitcoin.
There isn’t any centralized authority like a government or banking system to protect the funds or track transactions. Bitcoin mining refers to exchanging cryptocurrency units with other entities.
You can use cryptocurrency to buy gift cards, housewares, and airplane tickets. Other cryptocurrency trends include investing in cryptocurrency itself.
Investors consider cryptocurrency a commodity. They’ll buy it, relying on it increasing its value over a period of time.
Benefits of Cryptocurrency Explained
Both large and small companies recognize the benefits of accepting cryptocurrency in their online and retail stores. Cryptocurrency makes online payments faster and easier.
It also enables merchants to streamline online transactions. That way they can reach more international customers.
When a business owner creates their online fund transfer capabilities, the bank and credit card companies have many requirements for them.
These companies will have to fill out applications and pay user fees to use online transfers. They’ll also have to pay a user fee to maintain their online accounts.
With cryptocurrency, a member only needs a free address to launch online transactions. They can also advertise on their company’s website that they accept electronic payments.
If you think you’ll get more cryptocurrency transactions than you can manage, you can also engage a payment processor. Payment processors like CoinGate will then manage your sales.
Cryptocurrency can also help control transaction fees in a cost-effective way. Smaller companies sometimes have a hard time getting a lower transaction fee with the credit card companies than larger retailers can.
Cryptocurrency payors (parties sending the money) set their own transaction fees or don’t charge fees at all. Cryptocurrency also helps prevent fraud. Transactions are transparent between members on a business network.
That way, miners can review the history and transfer of funds immediately. This capability helps them recognize and can see suspicious transactions immediately.
Cryptocurrency can also protect consumers. A cryptocurrency company and its customers conduct their transactions without ever revealing any confidential information. This keeps personal information out of reach for cyber criminals.
Where Can You Use Cryptocurrency?
There are a growing number of countries that use cryptocurrency. In the US, cryptocurrency is classified under the legal term Money Service Business (MSB). An MSB means any bank or financial institution that sends funds.
Cryptocurrency is a commodity in Canada. Any crypto-generated income there is labeled as “business income.” Cryptocurrency has also seen wider acceptance in Japan and Australia.
Cryptocurrency is common in the United Kingdom as well. Over 80 percent of cryptocurrency mining today takes place in China.
What Can You Buy With Cryptocurrency?
There are plenty of conventional and non-conventional items you can buy with cryptocurrency. This list of consumer items grows longer every day. Examples of these items include:
Online Services
Online game developer Zynga accepts cryptocurrency for in-app purchases. Microsoft also accepts cryptocurrency for apps, games, and movies from the Xbox and Windows online stores.
Dish Network started accepting cryptocurrency payments for satellite television as early as 2014.
Travel
CheapAir.Com, an online travel booking agency, started accepting cryptocurrency for flight reservations in 2013. Expedia lets travelers use cryptocurrency to pay for their hotel room reservations.
Housewares and Other Consumer Products
Online retailers like Overstock.com began accepting cryptocurrency in 2014. They’ll accept crypto for everything from jewelry to bed and bath décor. Tesla, Inc. the electric vehicle manufacturer, accepts cryptocurrency purchases.
Online retailer Newegg.com also accepts cryptocurrency. Digital funds are acceptable for consumer products ranging from beauty care to electronics.
Non-Retail Uses for Cryptocurrency
Cryptocurrency is also gaining wide popularity as a payment method for professional services as well.
Some life coaches, web designers, and accountants now accept cryptocurrency for their services.
The digital professional services marketplace, Fiverr, now accepts cryptocurrency. Online dating service OKCupid.com accepts cryptocurrency as well.
Bitcoin is also an easy and effective way to promote global philanthropy. The International Save the Children Fund uses blockchain technology.
This technology allows donors to track their donations. Donors can see if their dollars reach their intended goals.
As mentioned above, you can also buy, sell, or trade cryptocurrency. Cryptocurrency trading involves buying bitcoins when their price is low and selling them off when their value gets higher.
Cryptocurrency traders use this investment method to capitalize on lower buying prices. They’ll buy crypto funds with the expectation that its value will increase in the future.
If you invest in cryptocurrency, the US tax laws require you to pay capital gains tax on the profits you make from these sales. Investors then report these profits on their annual tax returns.
Check with your accounting firm to see if they can guide you on today’s best cryptocurrencies. You can also read more here on two of today’s leading cryptocurrencies, Bitcoin and Ethereum.
What Are Your Next Steps?
If you’re a business leader considering cryptocurrency, follow these steps to help get you started on the right path.
Create your cryptocurrency address. This address, or “wallet,” is the place where customers will send their payments. Some popular crypto currency exchanges include companies like Coinbase, Binance or Kucoin; or sign up for a wallet with Metamask or Trust Wallet.
Once you have your “wallet,” start accepting or trading cryptocurrency. You simply provide the account details for the crypto currency you want to receive. Your payee can then pay you a dollar value (for example $100) in the currency of your choosing.
The best currencies to use for actual payments include Stellar Lumens (XLM), Ripple (XRP) and Tron (TRX). The reason is that all of these currency have very low transaction fees.
Receiving crypto means you are building an asset, as crypto can remain in your wallet and gain (or lose) value. The value of the crypto you hold will not be subject to tax until it is withdrawn to a fiat bank account.
Although many do see crypto as a form of ‘get rich quick’ or ‘ponzi scheme’, the truth is that it’s neither of these. There is a world of potential in crypto currency, as money moves from physical to digital form. And for those savvy enough to invest, financial freedom is very much a possibility.
Don’t forget to check our website where you’ll find more advice on cryptocurrency for beginners. Read up on this revolutionary payment system to see if it’s right for you.
