Entrepreneurs Jump on the Bitcoin Bandwagon
The media is covering it. Universities are studying it. The government is seeking to regulate it. And entrepreneurs are embracing it. Business owners throughout the country have begun to accept bitcoin as the currency of the future.
Launched in 2009, bitcoin is a form of digital currency created and held electronically. It allows individuals to transmit money to one other online without using a bank or other intermediary. Since its inception, some of bitcoin's most avid and vocal supporters have been entrepreneurs.
CheapAir.com, for example, has accepted bitcoin as payment since 2013. CEO Jeff Klee recently told Entrepreneur.com that the idea to accept the digital currency sparked from a customer's inquiry. Today, the company not only accepts bitcoin but finds that one of its key advantages is that these transactions are irreversible. Unlike a credit card transaction, where customers can later dispute charges or submit claims of fraud, once a bitcoin payment is finalized, it can no longer be disputed or reversed.
Business owners who accept bitcoin are also subject to lower transaction fees. Most owners typically pay processing fees between 2 percent and 4 percent of the revenue from each credit card transaction. But the use of bitcoin is free. (Business owners who convert their bitcoin revenue to U.S. dollars my face a processing fee, but that fee ordinarily hovers around 1 percent.)
The bottom line cost on business owners to accept bitcoin, then, is much lower than that of many other forms of payment.
Another advantage associated with accepting bitcoin is that the practice opens a new customer base. A little over a year ago, BloomNation became the first floral website to accept bitcoin as a form of payment. David Daneshgar, one of its founders, describes bitcoin users as a “tight-knit community.” According to Daneshgar, bitcoin users are particularly supportive of companies that use the currency. During a recent Mother’s Day special, BloomNation.com saw a spike in sales, partially as a result of a message posted through a bitcoin website forum.
Finally, bitcoin provides for an easier online checkout for customers. When customers are purchasing products or services online with a credit card, they are oftentimes required to provide their address, phone number, email and other pierces of personal information. Bitcoin transactions don’t require such information and allow for a much quicker and easier checkout process.
Is bitcoin the wave of the future? Maybe. But entrepreneurs, the quintessential risk-takers, are willing to hedge their bets. For those business owners thinking of offering bitcoin as a method of payment for customers, Stephen Shearin, president of AmericanGreen (the first publicly traded medical marijuana dispensary brand in the world), recommends maintaining the traditional methods of payment, like credit cards and even cash.
Because bitcoin is not yet universally accepted, a fair amount of public education is still necessary before people accept bitcoin as a legitimate currency.
Jaia Thomas is a Los Angeles-based sports and entertainment attorney. She also assists business owners with intellectual property matters, such as copyright and trademark registrations.