Despite the many setbacks to the Bitcoin platform (like the shutting down of the world’s largest Bitcoin trading platform, Mt. Gox, hacking of Bitcoin wallets), it has not dampened the appetite for the cryptocurrency. The BitPay directory lists over 30,000 businesses and non-profits that accept Bitcoins and the number is till growing. Why has the business still retained its fondness for Bitcoins in spite of all its flaws?
Speculation is actually benefiting the Bitcoin
Many businesses have gotten into the Bitcoin game, partly because they want to benefit from speculations. Consider that a Bitcoin is trading at $100 now. It could easily become $150 tomorrow, depending on the market’s supply/demand.
Bitcoin mining is also a growing community, served by some of the largest real-time cryptocurrency trading and Bitcoin mining platforms, such as CEX.io.
Small processing fees
One of the advantages of accepting Bitcoins is that the transaction fees are very small. Contrast this with the processing fees on credit card payments or even PayPal and you will see how businesses benefit from Bitcoins. While most credit card companies, PayPal and other money transfer agencies like Western Union charge average transaction fees of two to four percent, the transaction costs in accepting payments via Bitcoins is one percent.
For a company doing transactions worth thousands of dollars every day, the savings can be quite big. Moreover, there are no charge backs because the Bitcoin system is not designed that way.
Lesser risk than currency
Bitcoins are not tied to countries, so the associated currency risks (stability and political risks) are very low. The biggest political risk connected to Bitcoins is that the government refuses to recognize Bitcoins, like what the Chinese did some time back. The bright side is Bitcoins can be a lifesaver when countries are faced with unstable economic and political situations. Money printing by governments is a big reason why inflation is rising the world over. On the other hand, only a finite number of Bitcoins will be mined, so inflation will not affect Bitcoins like how they affect physical currency.
Security
Another redeeming feature of Bitcoins is, processing and transacting with them is safe. Unlike when you use credit cards when you use Bitcoins no data is left behind that others can steal and use to make counterfeit credit cards. Key encryption was created especially for internet transactions (Bitcoins use them). Opposed to this, if you are shopping at a mall, you have to swipe your credit card and enter your PIN, as what happened recently at Target and other large retailers in the US shows.
As you see, businesses benefit from accepting transactions in Bitcoins. If they become regulated which analysts are saying they might, the Bitcoin wave will only become stronger.
