What exactly is a cryptocurrency
It is a digital form of currency that can be used to purchase anything on the Internet. Most cryptocurrency is stored in a public distributed ledger called a blockchain, enabling anonymous transactions and ownership tracking. Because a blockchain does not require intermediaries like PayPal, it allows instant global payments to people around the world with virtually no fees extracted from the senders or recipients.
Bitcoin – the legacy player
In 2008, the world had to suffer a massive financial crisis. The traditional means of investors and banks were not providing a suitable solution. The situation naturally led to an ‘alternative’ being sought after – the Bitcoin. It offered a better option for international trade that was decentralized and virtually free. While the initial technology may have been slow and clunky, it has grown. The crypto coin is now largely recognized not only by tech-savvy individuals but also the masses in general, especially after 2017, when Bitcoin became viral. It made many Bitcoin believers millionaires overnight.
A small business and a crypto wallet – a match made in heaven
Cryptocurrencies are a great way for small businesses to reduce costs and grow their customer base. With the use of blockchain technology, small businesses can accept payments with much less risk than ever before. It’s also an attractive marketing method – by accepting cryptocurrencies, small businesses stand out from competitors who do not accept digital currencies. To be factual, one-third of small businesses accept crypto payments.
How are cryptocurrencies beneficial for startups and SMBs
Over the past few years, many businesses decided to embrace new technologies, as the current ones were either too expensive or too slow. Intermediaries have always been a significant factor that smaller companies had to comply with. And it is quite often they have encountered a bad experience. For that reason alone, small businesses were willing to give cryptos a try.
Cross-border payments have caused a headache for decades. International trade has been a crucial part of business operations – global sales enabled many newly found businesses to scale. Bank transfers can take up to a few days, which is too long for today’s standards. And some payment providers such as Paypal are not globally accepted. Cryptocurrencies, however, are peer-to-peer, so the location is no longer an issue. If the client and the merchant have crypto wallets, then transactions can happen in minutes.
Lower transaction fees
Bank transfers and different payment gateway services come with high fees. One of the primary goals of cryptocurrencies significantly reduces transaction costs. For example, an average Dogecoin transaction costs $0.24. Payment processors usually charge a higher flat fee – and this sum even excludes the commission based on transaction value. So, the bigger the transaction, the more worthy it becomes to utilize cryptocurrencies.
Chargebacks are simply non-existent
Nothing bothers small businesses more than chargebacks. Everybody knows that chargebacks were made with good intentions. However, in many cases, customers exploit chargebacks to request a refund, even if they have received their goods. They can be an expensive, time-consuming distraction for your team. But there are ways to prevent them from happening in the first place. With the help of blockchain technologies and by cutting the middleman, the completion of transactions makes them irreversible.
Dogecoin – a new era in cryptocurrencies
Although Dogecoin has been named after an Internet meme, it is actually a very popular and reliable cryptocurrency as it has lower transaction fees and minimal risk compared to Bitcoin. In fact, the cryptocurrency once created as a joke, turned out to be a big success. A business can enable clients to purchase goods or services from their company or buy Dogecoin as an investment tool on the cryptocurrency market. Not only that – Dogecoin was endorsed by Tesla’s CEO Elon Musk, who is an avid fan of blockchain technology.
Many people didn’t predict how cryptocurrencies would perform in 2021. Some believed that they would be a nine-day wonder; others imagined a world without fiat currency. The truth, however, is entirely different. Digital currencies are made to be a reasonable option for financial transactions that will be processed quickly and at the same time will not cost a fortune.
Thus, it is no wonder small businesses were the first to adopt cryptocurrencies. They were not only more flexible and eager to try something that would favor their bank accounts – they were waiting for a technology designed for their needs.