Small-scale businesses that accept cryptocurrency can distinguish themselves from their competitors. However, it is a risk and a learning curve that can be difficult for small-scale business owners to overcome.
In contrast to traditional fiat currency that is issued and controlled by central government agencies, cryptocurrencies are decentralized and operate without any central authority. Blockchain technology is used to record transactions onto an unchangeable and secure ledger. The absence of a central authority can help reduce transaction costs for businesses, which can be between 2 and 5 percent, compared to up to 4% for credit card transactions. Also, it helps prevent fraudulent chargebacks, by removing the necessity for banks to verify every transaction.
Demand and scarcity drive the value of cryptocurrencies. For example, the number of people who mine Bitcoin increases the coin’s value because it reduces the amount available to spend. Certain coins also utilize burning as a method to increase their value by eliminating an element of the supply.
The cryptocurrency market is rife with scams and fraud and it’s essential for consumers and businesses to be aware of the dangers. For instance there is no legitimate business that will contact you via text message or email, or even social media, asking for money in exchange reference for goods or services. Never click on links in unsolicited emails. These are usually phishing attempts designed to steal your computer or personal information, like a username and password.