Starting a small business can be tough at the best of times. You’ve got all the initial costs that you have to plan for, setting pricing for whatever goods or services you will provide in order to turn over a profit, and the question of will the business even be successful? So planning, research and hard work are all integral to starting a new business, and never more so than now with so many businesses going under in recent times, or not being allowed to operate in normal circumstances.

One thing we do know is businesses need to keep with the modern times. Whether it be technology or legislation that changes, you have to be quick to react to ensure that your business isn’t going to be held back. One of the biggest changes in the modern world is the introduction of cryptocurrencies, and many businesses, big and small are looking to get involved in these. Just look at Elon Musk’s Tesla buying $1.5bn in BitCoin (BTC).

But what are the pros and cons of accepting cryptocurrencies like BTC for small businesses? Well, let’s take a little look shall we?

Pros

Elimination of Banking Fees

When you use a traditional bank, you’ll have to pay business rates for account maintenance, you may be required to have a minimum balance or at the least an income, and you’ll get charged for features such as using an overdraft. Whilst many exchanges that deal in BTC do charge a deposit or withdrawal fee, kind of like when buying and selling stocks and shares, you don’t have any of the other fees associated with traditional banking accounts.

Accessibility

Since 45.4% of the world’s population are predicted to have a smartphone, that means in theory, BTC is available to a whole chunk of the world’s population who may not have access to traditional banking systems.

Mobile Payments

Sticking with the accessibility side of things, people can make payments from their computer or mobile devices, much like they already do with contactless payments. They can also transfer funds between crypto wallets too, meaning they can get access to funds there and then, and don’t have to go away and come back because they need to visit a bank.

Discretion

So sometimes, we don’t want people knowing our business. Maybe we’re buying some adult toys, or even just a surprise for a loved one. Well, BTC payments are discreet, unless the person purchasing decides to publish their transactions. This gives a lot of people comfort knowing their identities are secure.

Profitability

Because the value of BTC and other cryptos can change so quickly, it does mean that by accepting crypto, you could make more money. Just look at how BTC has gone from averaging between $7,000-9,000 for 1BTC to now over $40,000 in just over a year. That’s why places like sportsbooks offer crypto deposits, because it can benefit them greatly as someone’s deposit with them could be worth double the amount the next day.

Cons

Volatility

As much as there is a chance to make profit mentioned above, the price can also come crashing down too. There is no stability really, or security when it comes to their value. Which is why in the example above of sportsbooks accepting BTC, they also allow you to cashout in BTC as well, as a way for customers to be able to make money, but also to limit the risk of the business losing lots of money by accepting crypto too.

Security

Whilst many cryptos are secure, because they are digitally based, there are some security issues involved. One such issue is when you have a wallet, you’ll be given a list of 20 words for security. You may be asked to provide random ones, or to list them all in the order given to you. But if you lose this, you lose your funds, because there is no way of getting it back.

Lack of Regulation

Whilst traditional currencies are regulated, cryptocurrencies are not. This means they lack the protections that the Government will give their national currency. This means increased risk of investing and a worst case scenario of the cryptocurrency imploding and everyone losing everything.

Scalability

Whilst more and more people use cryptocurrencies each day, the number of transactions made compared to traditional banking systems operated by VISA and Mastercard is miniscule. And part of that reason is the infrastructure is not in place to be on the same scale as those big names. Now that will likely change in the future, but it is something to consider for now.

Have we missed anything?

So there you have it, a list of 9 pros and cons in total, outlining the benefits that accepting cryptocurrencies could bring to your business, but also the risks that come attached too. Is there something important you think we’ve missed out? Or maybe some helpful tips you can offer to new startups? Then comment below to let us know, or drop us a message on social media.

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