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Should Businesses Accept Bitcoin? 6 Myths Debunked

The hype around Crypto is not slowing down. What are the claims to accept Bitcoin as a business?

1/8 ● Frederik Today
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MYTH #1 BY ACCEPTING BITCOIN, YOU LOWER THE TRANSACTION FEES.

Transaction fees by credit cards are between 2% to 4%.

I checked the average bitcoin transaction fee and checked out CoinDesk. CoinDesk is the #1 news website specialized in Bitcoin and other crypto.

On Feb 26, 2021, a CoinDesk article wrote that the average transaction fee was $23

On April 21, 2021, Coindesk published another article with the worrying title "Bitcoin transactions are more expensive than ever", and the average transaction fee is $59"

Let's do some calculations: Let's take the highest credit card transactions fee of 4%, and the lowest Bitcoin transaction fee of $23, you need to sell at least $575 in 1 transaction to have a benefit to accept Bitcoin.

With the $59 transaction fee, you need to sell at least $1.475 before profiting from lower transaction fees.

Credit card transaction costs are fixed, but Bitcoin transaction costs are very dynamic.

MYTH #2 BITCOIN GIVES YOU MERCHANT PROTECTION AGAINST FRAUDULENT CHARGEBACK

The idea is that once the transaction is registered, the transaction is final. No third party can reverse it. While technically this is true, it doesn't mean it protects you against chargebacks, fraudulent or not.

Yes, you can't reverse the transaction, you still can get scammed by paying back the Bitcoins, and that transaction is again irreversible. Good luck by getting your money back after you proved it was a scam.

With Bitcoin, you have fewer issues with stolen credit card numbers, I agree. But Bitcoin is not 100% safe neither. Criminals can still get access to digital wallets, pay with those wallets and get the goods. That's the same.

In both worlds, companies try to get this solved. Credit cards companies do a lot of work to prevent/block stolen credit cards numbers, and Coinbase is holding less than 2% of their customer's digital currencies online.

Bitcoin is not the bulletproof solution against scams.

MYTH 3 BITCOIN WILL INCREASE SALES

By adding Crypto, you can sell more products and services; you can expand to international buyers.

Again, maybe, but doesn't Credit Cards offer the same? More people abroad have credit cards than Crypto. If you want to expand internationally, you must add credit cards first.

Credit card companies and payment processing companies like Stripe and Checkout do many anti-fraud checks. With bitcoin, you sell anonymously.
Except for the transaction added to the blockchain, there is no factual verification of who is behind it.

I am just thinking, most of the crypto people believe the cryptocurrency will reach 1 million; The famous "To The Moon" Theme.
Why would they use Bitcoin to buy your product or service for $100 if they make millions? It doesn't make sense.

Do you want to reach more people buying from you online? Work with companies like Stripe and add Credit Cards; you will sell more. Not Bitcoin

MYTH 4 WITH BITCOIN YOU DON'T HAVE FLUCTUATING EXCHANGE RATES RISK

While again, partly is true. If you sell goods in bitcoin and get paid bitcoin, you have no Exchange Risk.

But, that is not the whole story!: Your staff and suppliers need to be paid. Your taxes need to be paid, your internet connection, etc...
How many of your suppliers accept Bitcoin? Not that many, so you need to change your Crypto to your local currency. And there you have exchange rates implied. (plus withdrawal fees)

With credit cards, when I sell my services in Swiss Francs to visitors from the USA. I receive Swiss Francs on my account, the amount I asked for (minus the transaction fee)
Exchange rates can have an influence on the buyer.

Exchange rates are always happening, Bitcoin or Credit Cards or Cash, depends who pays them.

MYTH #5 BITCOIN IS MORE EFFICIENT

Some say that current transactions can take hours or days and bitcoin transactions are instant.(3). Let me tell you, when you accept Cash or Credit cards; the transaction is instant.

I did some extra research on how long a Bitcoin transaction takes
"In general, sending Bitcoin can take anywhere from seconds to over 60 minutes. Typically, however, it will take 10 to 20 minutes." by Cryptovantage (4)

Yes, you can speed up the transaction; the most common method is to pay a higher transaction fee so that miners will prioritize your transaction.
Please go back to #1 and review the calculations

Bitcoin transactions are not instant. You are better off with Credit Cards

MYTH #6 BITCOIN IS THE TREND!

Some say if you don't propose BitCoin, your business will lag, and you will lose customers. We work with 5.000 enterprises from small to huge, from local spa centre to the Nike's of the world.

Noone we know is openly promoting BitCoin as a payment system.

Of course, we all read the news that Tesla was accepting Bitcoin to buy a car..... only two weeks later to cancel it.

I recommend watching the video by Patrick Boyle on Bitcoin.

Let me give you a last example of the risk.
Let's say your offer massages; one massage is $100. When you ask your customers to pay in BitCoin, they will pay you the equivalent of $100 in Crypto. The clients paid $100 at that moment.

Crypto falls by 12% in a week, but you have to pay your staff and suppliers. You transfer your Bitcoins to your bank account and get $88. ( (even less due to withdrawal fees and exchange rates) A loss! Lovely isn't it?

Trends are not enough to make it a success. Trends for who anyway?

CONCLUSION

Swipe up for the conclusion if you should accept Bitcoin or not...



I would not recommend Bitcoin or any other crypto as a currency, as a payment system.
Crypto is a highly speculative investment vehicle, and we must see it as an investment tool, not a payment tool.

For once, we should follow Elon Musk advice and leave Crypto (temporarily) aside as a payment feature ... Until....

Until a severe StableCoin, linked to the existing payment processors, like Stripe, CheckOut, PayPal, is available, I will not consider Bitcoin or other Crypto as a payment feature.

What do you think of businesses accepting crypto as a payment tool?

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