- 10 November 2017
- Posted by: Staff
- Category: Brief consultancy, Cryptocurrencies
What is cryptocurrency? And why is everyone talking about Bitcoin at the moment? Learn everything you need to know, plus how you can prepare your business for the future in this quick guide.
There’s been a lot of talk about cryptocurrency recently. What is it? Where can I buy Bitcoin? How will this impact my business’ strategy and day to day operations?
While it might not yet be able to compete with other forms of global currency found in your wallet or purse, cryptocurrency is gaining some rapid traction in today’s market.
And as consumers start to get more comfortable with the concept of digital money, it’s essential that businesses in Europe and beyond start to take note.
What is cryptocurrency?
Cryptocurrencies use algorithms to make payments on a person to person basis without the need for a central entity. Like a Peer-to-Peer network for file sharing, such as the BitTorrent protocol.
To put it in layman’s terms, Blockgeeks describes cryptocurrencies to be just ‘limited entries in a database no one can change without fulfilling specific conditions.’
It’s an innovation which consumers and businesses alike are starting to accept. So the question is, will it impact your business? Or can you afford to ignore its surge in popularity?
The current state of cryptocurrency
Slowly but surely, more and more businesses are starting to accept Bitcoin and other cryptocurrencies as a form of payment. Whether it’s for a sandwich or a pint, you’ll gradually start to see more stickers in shop windows next to other forms of payment like Visa and Mastercard.
However, for most businesses, the world of cryptocurrencies is and will continue to be a testing one until it becomes more widely known. Unfortunately, the services and hoops required to trade in these coins can be perceived as a lot of work, with many methods either untried, brand new, or completely untested.
There’s also the fact that many of these service providers charge rates well above the true value to buy digital coins, often ranging between a premium of 10% and 20%.
Yet, the fact remains, Bitcoin and other cryptocurrencies are in demand. To offer the option of paying for things in a cryptocurrency gives the customer an instant impression that you are modern trendsetters who are prepared for the future. These kinds of impressions are particularly important in the fast-moving and highly competitive cities in Europe, such as London, Paris and Berlin. Customers like new trends and want to deal with businesses that share the same thirst for new modernisations.
In today’s economy, businesses that fail to accept contactless or debit cards are already losing out. Give it a few years and the chances are that other SMEs might have the same issue when they refuse to deal with cryptocurrencies.
Are cryptocurrencies secure?
With there being no central regulating authority to investigate any issues you have with cryptocurrencies, it has raised a couple of concerns amongst businesses and traders. Luckily, there is an easy solution.
If a business or customer wrongly walks away with your money, the team at Bitcoin can trace them as soon as they withdraw money from a bank account. This offers traders peace of mind that their money won’t be lost in the great digital abyss.
However, as a precautionary measure, it’s strongly advised that businesses only accept cryptocurrencies from customers who provide their real identity through another e-commerce profile.
What does cryptocurrency mean for businesses trading overseas?
The beauty of cryptocurrencies is that it makes it far easier to sell and trade with the foreign market. Accepting foreign-currency payments are slow and fluctuating exchange rates are a constant nuisance.
Cryptocurrency is instant, sending payments safely and securely. It also safeguards your business from any negative movements in currencies, allowing you to store away cash and protect your investments. This is very relevant now with the devaluation of the pound following Brexit.
How does tax work with cryptocurrency?
Taxing your cryptocurrency is like declaring PayPal profits and other forms of digital currency.
In fact, moving your transactions to a digital environment makes it remarkably easier for your accountant to organise, as there’s a clear trail without the complications of unreported cash. To accurately report this, you just need to make a note of the sterling equivalent of that transaction at that point in time by simply using a free online currency converter.
Although, if you’re working with quantifiable amounts of cryptocurrency, it might be worth using an expert in the field for some guidance.
Here at European Business Advisory, we can help you make smarter and more informed decisions with cryptocurrency. We use our industry-leading expertise to help you find opportunities within the European marketplace and ensure you are utilising the benefits of cryptocurrency and beyond.
For more advice on Bitcoin and other forms of cryptocurrency, get in touch and we’ll help you decide whether it’s a right move for your business.