Risks and Dangers for Small Businesses Accepting Cryptocurrency
Small-scale businesses that accept cryptocurrency can distinguish themselves from their competitors. However, it comes with risks and a learning curve that can be challenging for small-sized businesses to overcome.
Cryptocurrencies operate decentralised, meaning that they operate without the oversight of a central authority. Blockchain technology is used to record transactions onto an immutable and secure ledger. The absence of central authority allows businesses to lower the cost of transactions, which can range between 2 and 5 percent compared to up to 4 percent when using credit cards. It also helps to prevent fraudulent chargebacks because there is no requirement for banks to validate every transaction.
Demand and scarcity are the main factors that determine the value of cryptocurrency. For example, the number of people mining Bitcoin increases the coin’s value due to the fact that it reduces the amount of money available for spending. Some coins use a mechanism known as burning to increase the value of their coin by destroying part of the total supply.
It is vital that consumers and businesses are aware of the potential risks that come with the cryptocurrency industry. For instance No legitimate business will contact you via text message or email soliciting money in exchange for products or services. Never click on links in unwelcome emails. These are usually phishing attempts designed to steal your computer’s personal information, such as username and password.