Advantages and Disadvantages of Digital Money for Business

Today’s post is from our guest, David Koller. You can learn more about David in his author profile below the article.

On the eve of 2018, digital currency is the phrase on everyone’s lips. Namely, in 2017 alone, the value of Bitcoin moved between $750 (in January) to little short of $19,000 (at one point in December). Needless to say, this alone was enough to start stories about cryptocurrencies becoming a high-tech replacement for precious metals, where Bitcoin will play the natural substitute for gold. On the other hand, there are still those who claim that this is all a bubble which is about to break. Which one of these groups will eventually end up being right is something that remains to be seen.

On the other hand, this is just the tip of all the questions that are currently being asked. You see, while skeptics had some serious doubts about digital currencies ever becoming mainstream, the fact is that more and more businesses are accepting this kind of payment. Will this rise in value further facilitate this process? Most definitely. Should you rush to accept this kind of payment for the services provided by your business? Well, not before you are fully informed of all the advantages and disadvantages of digital marketing. Here are some of them.

Advantages

Digital currencies require lower fees

When you start comparing cryptocurrencies to some of the most widely spread payment methods and gateways (like PayPal), what you will notice is that the transfer fees are significantly lower. It gets even better, seeing as how the standard cryptocurrency fee of between 0 and 1 percent is also significantly lower than credit card fees. These differences are huge even for the smaller transactions and become more and more substantial as the value of transaction goes.

In other words, if you aim to switch to digital money transactions at one point, either way, it might be a good idea to do it as soon as possible. The longer you postpone, the more of your assets will get drained by these transaction fees. Needless to say, the money you save could be used much better and in this way facilitate the growth of your company.

Fraud protection

Unlike the popular belief that the theft of physical assets is the most dangerous thing out there, you need to keep in mind that in the age of information, losing your personal info or revealing identity to an unknown third party online can be much more dangerous. By trading with cryptocurrency you won’t be forced to reveal your personal information such as personal name or address.

On the other hand, such a thing is impossible to imagine with a standard payment method such as credit card. For this reason alone, a lot of people are drawing a parallel between paying with cryptocurrencies and paying with cash. In fact, some even speculate that cryptocurrencies might replace cash altogether in the future.

Simpler international payments

The international business world is getting more and more intertwined by the hour. You see, starting an overseas office, having an international supplier or even outsourcing your customer/IT/HR services to a company that is half a globe away is nowadays a common occurrence. According to experts behind GWM SEO hub, same goes for other aspects of your business infrastructure, like digital marketing, that require highly-skilled workforce and high-end tools. Furthermore, with the present-day office getting more and more digital, telecommuters are quickly becoming the backbone of the digital world’s workforce.

With this in mind, it might not be long before your startup is forced to conduct international payments on a regular basis, as well as receive them. On the other hand, accepting cryptocurrency payments is cheaper and even time-saving, which makes it into an ideal solution. You see, the transactions are much quicker, which allows you to get cash on hands much quicker than you usually would. Needless to say, this can give your cash flow a substantial boost.

Disadvantages

The volatility of prices

So far, we’ve mostly discussed the pros of going with digital money, whereas there are some downsides that need to be explored as well. First of all, the prices are quite volatile, which means that your investment can go both ways.

As we mentioned in the introduction, the price has jumped almost 25 times since the beginning of the year but it’s not that hard to imagine this trend reversing itself. In other words, with the price that changes every day, there is no telling how much will your investment or the payment you’ve received be worth in a week or even tomorrow.

For those who follow the current Bitcoin trend, this might seem quite optimistic, seeing as how the price seems to be on a constant rise, however, this lack of predictability is usually not a great business practice. For this reason alone, some people are cautiously still supporting the traditional payment methods, despite all their apparent flaws.

The lack of trust

Finally, one of the things that stand in the way of cryptocurrencies getting the respect they deserve is the fact that most of them are still startups. Sure, over the last couple of years they’ve received a lot of practice, recognition, and even upgrades but some of the major conglomerates doubt the ability of these ‘laymen’ to deal with all that the open market has to bring. This mostly goes beyond Bitcoin, seeing as how it is the largest name in the game and, therefore, has the most solid infrastructure. Still, Bitcoin is not the only cryptocurrency out there.

In Conclusion

At the end of the day, it is clear that cryptocurrencies definitely have the potential to change the world of business as we know it. On the other hand, it wouldn’t be the first time to see such a massive potential wasted. Be that as it may, as more and more companies hop on this bandwagon, we will see how this situation further develops.

While it is more than clear that digital money offers numerous benefits that venture capital does not, some business owners aren’t comfortable with making this switch just yet. In other words, obstacles that digital currencies have to overcome in order to become ‘mainstream’ are not just economic but mental, as well.