Why we accept cryptocurrency as payment 💰

On August 25th, 2018, ABEM Digital Creations started accepting cryptocurrency payments for our digital marketing services.

How exciting! But why did we do this?

“A cryptocurrency (or crypto currency) is a digital asset designed to work as a medium of exchange that uses strong cryptography to secure financial transactions, control the creation of additional units, and verify the transfer of assets. Cryptocurrencies use decentralized control as  opposed to centralized electronic money and central banking systems. 

The decentralized control of each cryptocurrency works through distributed ledger technology—typically a blockchain—that serves as a public financial transaction database.

BitCoin,first released as open-source software in 2009, is generally considered the first decentralized cryptocurrency. Since the release of Bitcoin, over 4,000 altcoins (alternative variants of Bitcoin, or other cryptocurrencies) have been created.” Source: Wikipedia

What happens when the way we buy, sell, and pay for things changes, perhaps even removing the need for banks or currency exchange bureaus?

This the radical promise of a world where cryptocurrencies like Bitcoin and Ethereum are the medium of exchange. The idea of cryptocurrencies makes some folks flinch… but is it any more or less “real” than other types of money?

This notion—whether or not any money is “real”—describes the collective fiction of money. More on this can be found in a couple of TED talks I recommend:

1. Neha Narula’s “The Future of Money”
2. Don Tapscott’s “How the blockchain is changing money and business”

It could be that cryptocurrency becomes the world-changing, trust-building technology with the potential to transform money, business, government and society.

Before we start… semantics

Make sure you know the basics when communicating about cryptocurrency. Ethereum and Bitcoin are examples of the currency; BitPay and Coinbase (and Coinbase Pro) are the exchange houses.

Cryptocurrency wallets are for holding, payments and are used by vendors for taking payments and then move into their bank accounts.  Here are some examples of cryptocurrency wallets:

In what ways is cryptocurrency advantageous?

Credit cards take up to 3% in processing fees on every transaction.  When an international business accepts Bitcoin and Bitcoin Cash using a service like BitPay, it’s possible to get direct bank deposits (in the of the business’s country) currency for a flat 1% settlement charge.

Also, it is possible to connect to a borderless payment network with Bitcoin and Bitcoin Cash.  A business can receive payment in any amount, from anywhere in the world, from any computer or mobile device.

Other payment gateways force customers and businesses to shoulder the risks and costs of payment fraud. With Bitcoin and Bitcoin Cash, customers can pay without handing over sensitive personal information, and refunds are made through the merchant — no chargebacks.

The way forward

I interviewed my friend and finance/corruption specialist Dr. Jodi Vittori to get her to give me the scoop on whether or not cryptocurrency is ‘for real’ and whether or not it would make sense for ABEM to offer it as a payment option.

Here’s what she had to say:

1. Watch out! Theft has been a major issue.
2. Even though it may be less than the fee of a conventional bank, there is a fee for using and converting. Someone can pay in Bitcoin and you can hold this or it can be immediately put into your account (as if they’re paying in Euros and then the Euros are being exchanged).  Be smart and be aware that you might not get the full amount you’re expecting.

So we decided to go for it!  It took about 15 minutes to read through “how to do it” documents and to set up the ABEM BitPay account.

Our recommendation is to start with the basics and see how it goes… but be cautious and ask questions when you need help or clarification.

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