Why your company should accept BitCoin

Unless you’ve been living under a rock, you’ve seen cryptocurrencies getting tons of attention; Bitcoin in particular. For those who are unfamiliar, here’s a short introduction:

Rich in potential and steeped in controversy, Bitcoin is a radically new kind of money that operates without governments or banks. Already available and in limited use, Bitcoin has recently become a hot topic thanks to intense value-fluctuations, political pressure and surging media attention, here is some of the news that happened in 2013:

• The Winkelvoss brothers invested $11,000,000 in bitcoin, and became worth $32,000,000
• The US Senate Hearings regarding the use of virtual currencies turned out favorable, Bitcoin received a preliminary “Stamp of Approval” in the US Senate.
• The rise of the world’s best performing hedge fund in history, with a return of 4847%
• Business Insider names ‘Satoshi Nakamoto’ Person Of 2013
• Bitcoin has surpassed Western Union in transaction volume, getting very close at beating PayPal

There were several adoption stories as well:

• Richard Branson endorses Bitcoin, says Virgin Galactic will accept the virtual currency
• Bitcoin Black Friday was a huge success
• Zynga starts to accept Bitcoin
• Overstock starts to accept Bitcoin, first day brings in $130,000 of Bitcoin sales over 840 transactions
• Tigerdirect accepts Bitcoin

There are also some rumors around large companies that are working on support:

• Overstock CEO predicts Amazon will start taking Bitcoin, too
• EBay/Paypal considering accepting bitcoin as payment
• Google confirms their payments team is working to incorporate bitcoin

Adoption rate (source: blockchain.info/charts] #

^{The transaction volume went through the roof in November, but has calmed down a bit ever since.}

^{Bitcoin went as high as $1,200/BTC before the China clampdown in late December. It has been floating steadily around $900 afterwards.}

^{However, the adoption of online wallets services such as blockchain.info/wallet has been steadily increasing, acquiring over 1,000,000 users in a year.}

But Dennis, the Bitcoin markets have been all over the place! #

True, but it’s possible to get immediate conversion and payout in US dollars via payment gateways such Bitpay and CoinBase. There have been several businesses picking up on this such as Overstock and TigerDirect. It’s made so easy that it’s it was possible for an LA Lamborghini car dealership to offer Lamborghinis and Teslas for Bitcoins.

Advantages #

• Global! Easily monetize new markets without having to worry about currency conversion, etc.
• (Almost) no transaction fees! Bitcoin disrupts the payments ecosystem: transactions are free in bitcoin and Bitcoin merchant fees far below credit card fees (calculator)
• Safe! (for merchants)
• Fast! Payment itself is instant, and you can see it has been sent immediately. Verification takes about ~10 mins. This can be made faster if you pay a small transaction fee of a few cents.
• Easy to integrate! Services such as BitPay and Coinbase make it super easy to integrate in Atlassian’s existing payment system.
• Great publicity: The media regularly write articles on businesses that accept Bitcoin.
• Fanboy factor: People who own bitcoins will go out of their way to support businesses that offer Bitcoin as a payment method. They show remarkable and deep loyalty and will share your business via word of mouth.

Disadvantages #

• Market Price volatility: Bitcoin is notorious for it’s price swings, but this can easily be countered with BitPay and Coinbase payment to US dollars.
• (Potentially) less customer insight: Bitcoin is largely anonymous, this would mean that we would have less insight in our customer base. This can be countered by requiring address data.

Bitcoin has the potential to increase sales and deliver great publicity in one go, so go and implement it now!