How Bitcoins Work and Why Your Agency Should Accept Them
Bitcoins have been the topic of conversation for many small businesses lately, but that doesn’t make them any less confusing. It can be overwhelming to think about offering another payment option in addition to the credit card and PayPal options you offer, but if you break down how Bitcoins work I think you’ll find that they’re actually not too confusing. Their use is growing rapidly; so the sooner you can understand how Bitcoins work, why they matter, and if you should be using them, the better.
What are Bitcoins and How Do They Work?
Bitcoins were first introduced in 2009 and are essentially a digital currency that people can use to buy things online. Bitcoins are primarily used online only and works as data that you trade. The system uses a software that will give you a small about of Bicoins to start all determined through a mathematical equation. According to the Bitcoin FAQ page:
It is the “first decentralized peer-to-peer payment network that is powered by its users with no central authority or middleman. From a user perspective, Bitcoin is pretty much like cash for the Internet. It can also be seen as the most prominent triple entry bookkeeping system in existence.
For agencies or users using Bitcoing, it looks like a mobile app or computer program that provides a personal Bitcoin wallet where you can send and receive Bitcoins (more on getting started later). Through digital signatures, each transaction is protected.
The Benefits of Bitcoins to an SEO Agency and to Clients
There is one major benefit of Bitcoins that is hard to deny, but there are also other factors to take into consideration as you try to understand exactly how they work. The benefits include:
If your agency accepts Bitcoins, you can do business with anyone around the world.
Everyone in every country can use Bitcoins. PayPal, for example, blocks access from over 60 countries because of fraud, financial reasons, etc., and credit card companies usually even worse. Because of this, people from these countries were essentially denied from all sorts of online tools. Bitcoins fortunately don’t have these stipulations.
Bitcoin payments are processed with very small fees.
The services that Bitcoin offers are for much lower feels than PayPal and credit card networks. Users might want to include a fee in order to make the processing faster, but in general you’re not going to see anything too high.
Bitcoins are safe and secure for merchants and consumers.
These types of transactions do not hold any customer’s personal information, so fraud and identity theft is much less likely. Bitcoin users can also protect their money with backup and encryption.
They might soon be necessary in order to compete with others in your industry.
This isn’t a benefit so much as a reason it might be necessary in the near future. According to Bitcoin, at the end of August 2013 the value of all Bitcoins in circulation exceeded 1.5 billion US dollars with millions exchanged daily. WordPress started offering Bitcoin in November 2012. Until this date, many countries weren’t even able to use WordPress—hard to imagine isn’t it? A few SEO agencies and SEO companies now accepting Bitcoins include Monitor Backlinks, Ideal Media, Bill Hartzer, and Market Appeal.
So are there any negatives? According to Fronteirsin.org, Bitcoins have a somewhat unstable future. We don’t really know how long they will last or if they will keep their value. Furthermore, if they somehow end up in the hands of governments many suspect that they would pass regulations and restrict their usage, and then we’d be right back where we started. Bitcoin software is still evolving and growing, so it’s hard to say where the future will take it.
In the end I would say that Bitcoins are worth it for agencies because the pros outweigh the cons right now. Because they are becoming so popular, I don’t see them losing value anytime soon. Of course the decision is up to you, and I recommend researching about Bitcoins in your industry before making any quick decisions.
How to Get Started with Bitcoins for Your Agency
Getting started with Bitcoins is by far the most frustrating part of the whole process, and although it is said to be getting easier, this is where we see a lot of small businesses and agencies give up. Before jumping in to offering Bitcoins for your clients, there are four ways that you can acquire Bitcoins that I think helps give you the full picture:
- As a payment for goods or services. This is the main way that your agency would acquire Bitcoins, and for most agencies this is the only option they bother with.
- By purchasing Bitcoins at the Bitcoin exchange.
- By exchanging Bitcoins with someone near you.
- Earning Bitcoins through competitive mining.
For the purposes of this article, I will explain the easiest and most popular way to get started with Bitcoins for your agency. If you’re interested in mining and trading, visit this page for more information.
Get a Wallet. Your wallet works sort of like a dashboard for all of your Bitcoins and purchases. You can choose from a web wallet, which is the easiest and most popular, a software wallet, which is downloaded and run from your computer, or a mobile wallet. This is more for consumers as opposed to an agency looking to accept Bitcoins; however I like to encourage it because it gives you a much better idea of how Bitcoins work (and how they’ll work for your company).
Earn Bitcoins. This is how you actually get your Bitcoins and offer them to your consumers. You need to sign up for a Bitcoin merchant account. Once you do, you can send invoices and offer Bitcoin on your online order pages. BitPay is definitely the most popular option to get started.
I always like to point people toward a We Use Coins article that talks about getting started in greater detail.
Have you started accepting Bitcoins at your company or used Bitcoins as a consumer to buy goods and services? What did you find to be the biggest benefit, and what was your overall opinion? Let us know your story and your thoughts in the comments below.
Creative commons image by Antana / Flickr