Risks and Dangers for Small Businesses Accepting Cryptocurrency
Small businesses that accept cryptocurrency can differentiate themselves from their competitors. Small-sized business owners may find it difficult to learn about cryptocurrency and its risks.
In contrast to traditional fiat currency that is issued and controlled by central governments, cryptocurrency is decentralized and operates without any central authority. They make use of blockchain technology to keep records of transactions in an unchangeable, secure ledger. The absence of a central authority helps lower transaction fees for businesses, which could be 2 to 5 percent versus up to 4% for credit card transactions. This also eliminates the need for a bank to verify each transaction, which can cut down on chargebacks that are fraudulent.
The value of cryptocurrency is determined by demand and scarcity. The amount of people who mine Bitcoin for instance, increases its value because it decreases the amount available to spend. Certain coins utilize a method known as burning to increase the value of their currency by destroying a part of the total supply.
The cryptocurrency industry is inundated with fraud and scams and it’s essential for business and consumers to be aware of the risks. For example, no legitimate business will contact you via text message or email, or even social media, soliciting money in exchange for goods or services. Be sure to not click on links that are provided in uninvited messages. These are often phishing attempts to obtain your personal information or computer information, like your username and password.