How are bitcoin payments lucrative for businesses?

Managing the complexity of the supply chain can be challenging enough for traditional paper-based transactions. Consider the difficulties involved in managing complex intra-company transactions with bitcoin payments. Also, one to take into consideration is the government limits of effective control and regulation of bitcoin.

Bitcoin payments offer one potential solution to this problem: they simplify cross-border and intracompany payments without an intermediary by using the blockchain ledger as the authoritative source of record and transaction validation.

Why is bitcoin profitable for businesses?

 It reduces costs, speeds up transaction clearing time, and eases the reconciliation of accounts across borders. 

How can it help companies?

The potential usefulness of blockchain technology extends beyond financial institutions. For example, companies involved in the oil and gas sector are already seeing ways to use the technology to track ownership of products and components and conduct payments. Uses are varied but include:

Managing contracts via intelligent contracts – Smart contracts embedded in blockchains execute automatically when certain conditions are met. This technology can increase the speed of contract verification and protect against fraud.

Tracking products along a complex supply chain – Blockchains can track the serial numbers of components to ensure that they reach their intended destinations. The system can also have a use case to confirm real-time oil and gas trades and other contracts.

Vetting suppliers – An oil field services company could use a blockchain to get references for potential new suppliers from existing partners in similar fields. The blockchain would verify that a partner is accurate based on identifying information listed in the blockchain. The partner’s prior transactions would be accessible, as well, so their proven trustworthiness could be considered when vetting future partners.

Blockchain technology could also help create a universal currency – such as bitcoin – that improves business transactions globally. However, before a cryptocurrency becomes mainstream, its volatility must have a reduction. One way to do this is to add rules or algorithms to control inflation and other inherent problems in any new currency. Blockchain technology can also simplify transaction processing by digitizing and storing data on distributed computers worldwide. 

Perks of bitcoin payments in business:

It is an attractive option for businesses to accept payments in cryptocurrency. While it has become popular to pay salaries with bitcoin, it is not very useful in day-to-day transactions. Still, as retailers accept bitcoin, it will become frequent in the upcoming years. Businesses can use bitcoin as an investment asset.

 Bitcoin has been around since 2008, but the number of businesses using this digital currency is less than one percent. However, with growing awareness about cryptocurrency, more companies are looking at accepting bitcoins as payment for their products, services, and other offerings. Also, since the transactions are not linked to a person’s identity, there is no risk of identity theft, unlike regular credit card transactions. 

How many companies accept bitcoin payments? 

There are some popular companies accepting bitcoin. For example, a plane ticket purchased via Expedia or a gift purchased via Overstock come with a 5 percent discount if paid with bitcoin. Some of the famous companies accepting bitcoin as a mode of payment include:

Some businesses that accept bitcoins don’t use the currency as an actual payment but only accept it as an investment. For example, Bitcoin ATMs allow users to deposit cash in exchange for bitcoins and vice versa. In addition, some online retailers like Overstock and Newegg take payments in bitcoins. As a result, the Bitcoin market is getting more stable and is attaining maturity with time. 

Some of the use cases in which value is still being created include: 

Bitcoin transaction cost is volatile (fluctuates), low (as low as 0%) to very high (as high as 10%) based on transaction type and current market conditions. Fees are unrelated to the amount transacted, so small transactions can require hefty fees. On average, fees are around $0.25-$1 per transaction, but sometimes it depends upon the time of transactions. 

Closure:

Blockchain technology is still in its infancy and the evolution of blockchain will be worth watching. As a result, the initial enthusiasm for technology has waned. Still, there are indications that financial and non-financial institutions are continuing to investigate the use cases of blockchain technologies.