Nuban Institute

Risks and Dangers for Small Businesses Accepting Cryptocurrency

Cryptocurrency has become an instant, low-cost and secure payment alternative, and small businesses that accept it be different from their competitors. However, cryptocurrency presents risks and a steep learning curve that is difficult for small-sized businesses to conquer.

Cryptocurrencies are decentralized, and they operate without a central authority. Blockchain technology is used to record transactions onto an unchangeable and secure ledger. This lack of central authority allows businesses to lower the cost of transactions, which can range between 2 and 5 percent as opposed to up to 4% when using credit cards. It also eliminates the requirement for a bank to check every transaction, which helps cut down on chargebacks that are fraudulent.

The value of cryptocurrency is driven by demand and scarcity. The amount of people who mine Bitcoin for instance increases its value due to the fact that it decreases the amount available to spend. Certain coins also employ a mechanism called burning to increase their value by eliminating an element of the supply.

It is essential that business and consumers are aware of the potential risks that come with the cryptocurrency industry. No legitimate business will ask you to pay via email, text message or social media to purchase products or services. In addition, never click on links that are provided in unsolicited emails. These are usually phishing attempts designed to steal your computer or personal information such as username and password.

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