Bitcoin is the first decentralized, digital currency. It can be used to transfer payment to individuals or businesses. To gain a better understanding about Bitcoin and if it’s a right fit for your business, we’ve done a little research and answered some important questions.
How do you use Bitcoin?
First, you must create a Bitcoin account and purchase Bitcoin currency through an exchange. Your Bitcoin will be stored in your virtual wallet. When you want to make a purchase to either an individual or a business, you would log in to your virtual wallet and transfer Bitcoin. Be careful! If you accidentally delete Bitcoin, you cannot get them back. Sounds easy enough, right!
How are Bitcoins created?
Bitcoins are created by “mining.” Bitcoin mining involves individuals or groups that work to solve complex algorithms. Currently, the winner is rewarded with 25 Bitcoins roughly every 10 minutes. Bitcoin mining is so called because it resembles the mining of other commodities: it slowly makes new currency available at a rate that resembles the rate at which gold is mined from the ground.
How do you buy/sell Bitcoins?
Buying and selling Bitcoins must be done through a Bitcoin Exchange, such as Coinbase. Once Bitcoins are acquired you can transfer them using mobile apps or a computer to individuals or businesses.
What are concerns that I should know about regarding Bitcoin?
- Funds are not insured by the FDIC
- No customer support
- The average amount of time to transfer Bitcoin payment is 10 minutes
- Sometimes fees are charged and there is not a strict fee schedule
- The more you pay, the faster your transaction can be processed
- The fee amount is partially determined by how often you send/receive Bitcoin and the amounts in which are sent
- Transactions are anonymous
- Due to anonymity, Bitcoin has become the currency of choice for people online buying drugs or other illicit, illegal activities
Should your business accept Bitcoin?
Now that you know a little more about Bitcoin, the question is – should your business accept them. Our personal opinion is that it’s still very new, so be cautious. If you’re interested, do a little more research and possibly talk to a business that currently accepts the currency.
Best Card has no affiliation with Bitcoin. This article is only to inform you of new technology in the payments industry. For more information about the merchant services industry and Best Card, please contact us at (402) 206-2233 or visit us online at www.BestCardPayments.com.