9th October, 2021
Many individuals and businesses are planning to take Bitcoin payments for products and services. However, they are uncertain about the move, considering the volatile nature of this virtual currency.
Bitcoin and other virtual currencies might not have a mainstream adoption yet.
However, the number of businesses accepting it as a payment method is increasing. Whether you take this cryptocurrency or not depends on your business plans and goals.
Bitcoin is a pioneer digital asset that is decentralized, and people use it as a currency to pay for services and goods.
Also, some people use Bitcoin for value storage. Many individuals and companies turned to this virtual currency during the global pandemic as a cash reserve.
Essentially, some people see Bitcoin as a haven for storing value during economic uncertainty because they think it’s immune from government manipulation and inflation.
The decentralized nature of this virtual currency makes it resistant to the government’s manipulation. However, the lack of government control makes Bitcoin tremendously volatile.
So far, Bitcoin is the most common and popular cryptocurrency, with many businesses accepting it as a payment method.
Platforms like BitQL allow people to purchase and sell this virtual currency using fiat money.
That means you can quickly get Bitcoins and use them to complete a transaction. But before accepting a Bitcoin payment, here’s what you should know.
You Require a Bitcoin Wallet
You can’t purchase, store or sell Bitcoin without a digital wallet. Essentially, Bitcoin is a virtual, electronic currency.
Therefore, you need software for holding it in your device. A Bitcoin wallet has a private key, a secret number that you use to access your crypto.
Alternatively, you can use a hardware wallet, requiring you to keep the keys in a hard drive or write them down if you don’t want to store them online.
You can also sign up with a Bitcoin exchange to use a third-party server to store the keys.
You Might Need a Bitcoin Payment Processor
Perhaps, you do business online, and you wish to accept Bitcoin payments. In that case, you can partner with a Bitcoin payment processor. That way, you can receive Bitcoin payments via the processor.
The payment processor is a company that allows you to accept payments from your customers anywhere globally.
You Can’t Reverse a Bitcoin Transaction
Reversing a Bitcoin transaction is impossible unless the recipient agrees to send the funds back. That means the merchant and customer require trust before completing a Bitcoin transaction.
If your business accepts Bitcoin, prepare for the possibility of refund requests. Also, track the amount your business receives from every customer.
Bitcoin Tax Implications
According to the IRS, virtual currencies like Bitcoin are property, meaning the government can tax them. Therefore, prepare to report your gross income depending on Bitcoin’s fair market value when receiving it.
Thus, when you buy, sell, or use Bitcoin, the government subjects you to a capital gain tax.
Once you decide to accept Bitcoin in your business, prepare to track its value when you receive and sell it every day. Also, factor variables may affect your total amount owed.
Small companies with several daily transactions can find the process complex. Therefore, such businesses may opt to accept Bitcoin for luxury purposes only.
The Final Thoughts
The staggering volatility of this virtual currency dissuades some individuals from accepting payments through it. Nevertheless, many businesses globally are allowing customers to pay with this virtual currency.
Also, individuals are receiving payments for services via Bitcoin.
However, take your time to learn how this virtual currency works before accepting your first Bitcoin payment. That way, you’ll know how to receive and spend your Bitcoins.