Three pros and cons of using Bitcoin for your business

bitcoin_guy

By Mars Dorian, {grow} Contributing Columnist

Imagine if you could have 100% control over your money, pay every person on the planet in seconds, even if they don’t own a bank account, with almost zero fees and absolute freedom?

Sounds like a cheesy ad for a sleazy bank, but the vision is more real than you think. I’m talking about an innovation called Bitcoin. Since most of us work digitally, why do we cling to currencies that belong to the physical world?

What is Bitcoin (explanation)
First of all, let’s define Bitcoin. It’s an encrypted digital currency that gets distributed peer-to-peer. It functions without a central authority and works everywhere you can access the web.

But why use it ?

bitcoinA few weeks ago, curiosity washed all over me. A friend of mine cajoled me into visiting the official Bitcoin Exchange of Berlin. I had heard about Bitcoin before, but I thought it was for digital freaks who lived at the periphery.

Boy was I wrong.

I had no idea about the global economy that sprang from this digital currency. Heck, I even met one of the co-developers who programmed the Bitcoin Wallet app (that day, he bought Bitcoins worth over 1,500 € ($2,025), I was sweating waterfalls just seeing that happening.)

I met Bitcoin-iacs left and right … a biz owner who sells vinyl around the planet and accepts Bitcoin payments, a digital artist who offers his artwork in Bitcoins, and a guy who created a service that lets you pay for any Amazon products and pay with Bitcoins. They all spread the gospel and drooled over a Bitcoined world (one of them gave me the WTF look with eyes wide open when I admitted I didn’t own a single Bitcoin yet).

After that hefty event, we went to Room77, a hip restaurant that allows Bitcoin payment. One of the speakers of the exchange paid for all of our beer and pizza – guess – in Bitcoin again.

This was surreal, as if I discovered a secret world beneath the surface.

Now you could say, well, a bunch of hipster folks use it, so what? But the crazy news doesn’t stop there. Germany is the first country to accept Bitcoin as a private currency, giving it quasi-legal status. China’s biggest site, Baidu, now accepts Bitcoin as payment. The market price of this digital currency is skyrocketing, and startups around the globe get funded to make Bitcoin more mainstream.

With so much action going on, I’ve decided to offer my services in Bitcoin as well. I’m not a maniac who bets his future on it, but I also don’t want to get swayed sideways if it becomes mainstream.

No matter if you’re into social media or other web related work, you should think about accepting Bitcoin for your business.

Let me show you the pros and cons about using that exciting new currency that knows no country, no owner, no boundaries.

3 major pros and cons for using Bitcoin

Pros
1) Ease of payment, because it’s truly global.
International transfers are still a pain in the butt. They can take days or even weeks and come with bureaucratic nonsense. Most countries in the world don’t have access to Paypal, since it requires a “normal” bank account to work. But everyone who’s got access to the internet has access to Bitcoin.

Heck, it’s made for the web, a truly global currency.

2) Very low fees (if any at all)
Visa, Paypal and Co. demand hefty percentages from your transfers – they are the middlemen to you and your clients. Bitcoin comes with low fees, or no fees at all. Since no single entity owns it, you can’t put price tags on it.

3) Freedom of use.
Let’s face it – your bank and Paypal accounts can get frozen on a whim, or shut down completely. The government could take your money to bail out their shenanigans. (Cypress anyone?)

With Bitcoin, you have 100% freedom over your money. You, and only YOU decide what happens with it.

Cons

1) Takes (minor) tech knowledge to handle.
Unfortunately, Bitcoin isn’t as straight forward as our traditional currency. You have to find services online to use it properly, and you have to take care of your Bitcoin key storage and make backups.

2) Huge fluctuations.
Bitcoin has skyrocketed in value (from $14 in January to $211 in November 2013), it is still prone to rollercoaster up and downs. With the lack of mass market adoption, major events like the shutdown of Bitcoin based sites like Silkroad cause it to fluctuate dramatically.

3) Current lack of mainstream appeal.
Many startups and businesses around the globe are working to make Bitcoin mainstream, but it has a long way to go. You probably can’t pay your rent or for your food with Bitcoin. As of the writing of this post, is still limited to specific pages and products. (You can however exchange your current Bitcoins into real currencies, e.g. Dollar and Euro.)

Since most of us are doing business on the web, it makes sense to use a currency that was created for the web. If have $100 you can spare, why not experiment with it? It could be huge.

Have you tried it yet?

mars dorianMars Dorian describes himself as a creative marketeer with a moon-melting passion for human potential and technology. You can follow his adventures at www.marsdorian.com/

Original illustration by the author.

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  • Mars this is really interesting! I’ve never heard of Bitcoin before (which is surprising to me because I am an early adopter whenever possible) and before I got halfway through your article I knew I would sign up. (Which I will do right after I write this comment.)

    Way back in 1996, I subscribed to a service that gave a me a special personal home phone that allowed me to dial up certain utilities (electric company, water company, a few participating credit card companies and I forget what else), and swipe my credit card into the phone to make my payments. I invited all of my friends over to watch, of course. It was sooo cool and cutting edge! Ha! We’ve come a long way, baby.

    I can’t wait until Bitcoin (or other global digital currency) really becomes mainstream. What is really fascinating to think about are all of the issues that the EU had to deal with, and still do. e.g. will it homogenize our cultures over time? Will it turn the western world into the serfs of the Chinese? Will I still be able to afford Netflix???

    Thanks for putting this on my radar.

  • Christine Webber

    Very interesting thanks. I will pass the info to a few of my business clients who are starting up online shops. Not sure I am techi enough to have a go myself but will let you know.

  • I might be missing something, but don’t you need a bank account to buy the Bitcoins in the first place? Doesn’t that mean that those countries without one still won’t have access to purchase Bitcoins?

    To be honest the whole thing confuses me! 🙂

    Nice, informative article though, cheers!

  • no, you don’t need a trad. bank for Bitcoins, that’s the advantage. You may need one if you want to trade them back into a local currency though. For Bitcoins, all you need is basically a bank account.

  • I just dove into it, and I don’t find it as complicated as it sounds. I think the “negative” hype about its apparent complicated usage is more twisted than the access itself 😉

  • jennifer lehner

    I hadn’t heard of Bitcoin until I read this, and I’ve been thinking about it all day. I’m thrilled about it, because I think it makes sense. But I imagine that in addition to the cons you mention, I am sure Bitcoin, or whatever universal digital currency arises, will present the world with similar problems that the EU had to address, like, will this homogenize our cultures? Or, will the western world become serfs to the newly industrialized east?
    I remember, way back in 1997, ordering a phone that allowed me to swipe my credit card into it to pay certain utility bills. I thought that was sooo modern and cool. Ha! We’ve come a long way haven’t we?

  • kradel

    I’ve got the Bitcoin option for people to give reader appreciation donations to my web site. I’ve had it set up for a few months, but nothing yet. As with dollars, reader appreciation donations just aren’t that common.

  • That’s an interesting thought.
    I believe globalization in total homogenizes our world. Just look out the streets – you’ll find Coca Cola and McDonalds in almost every part of the world. I also believe that Bitcoins give people more freedom, as no single entity from above can freeze your BTC account and take your money. Diversity will always exist, because different people like different things. Also, Bitcoin wouldn’t replace local currencies, but add a global possibility to your business. You can always pay in your local currency when you’re in local surroundings, but when you do biz with people around the global, you can use a global currency for that.

  • jennifer lehner

    I think in our lifetimes that is true. But currency and language and culture are intertwined and I do think that in time, all of our currency will be digital. No time soon, but eventually. In the interim, I look forward to using Bitcoin as a consumer, and as a business owner.

  • This certainly is a hot topic. I was approached recently by a company looking to play in this market and needing my finance/banking background. I don’t see virtual currency disappearing, but I do see regulations and compliance coming down the pike.

  • Christine Webber

    Will let you know how my clients get on

  • Karen Lancaster

    How does one get involved in Bitcoin trading?

  • marina

    All new-born frontiers, stocks, babies etc, fluctuate according to interest in the beginning. When a fundamental change comes along that ‘blows peoples minds’ and the quagmire of what they hold familiar is shaken lose, they panic. They can suppose much, assume much, fear much and frenzy themselves stupid.

    Of course the Bitcoin currency to some seems to flicker wildly because their sights are so narrow. But add it up as one should by assessing the start point and current point only, and there you will have it. Was what, and is now? After all that it has been through and all that it gives in possibilities, why pain yourself to ridicule it? Evolve dear reader and see it for what it really represents and that is, a new frontier in trade possibilities.

    A new and open trade space that is brilliant in concept, beautiful in creation, blazing in traction and blinding in scope.

  • The most popular go-to site is https://www.mtgox.com/ , which is the mainstream source for Bitcoin exchanges.
    You can also check out meetups.com and check whether they have live Bitcoin events / groups in your area, which means you can locally buy Bitcoins.

  • Maybe you should formulate it more like sponsoring, or a business transaction than a donation ?

  • I hope that won’t happen, because the strength of Bitcoin is its lack of regulation. But then again, specific humans want to control over everything.

  • Karen Lancaster

    Thanks, going to take a look

  • kradel

    Probably should have said that first. The site was a business site that
    didn’t fly (a subscription membership site for artists and cultural
    travelers), now it’s just a personal blog. It never really mattered what
    I called it – subscription, membership, sponsoring, donation, etc. the
    internet (at least my corner of it) just isn’t ready for pay per use.

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