By now, you would most likely have an awareness of Bitcoin and the controversies, debates and discussions surrounding bitcoin. No doubt, it is an interesting topic and can serve as great fodder for discussion.
Bitcoin is the world’s first digital currency (also known as Cryptocurrency) that took the whole world by storm and emerged as the most successful decentralized payment method. With its groundbreaking aspects and state-of-the-art technology, Bitcoin has completely revolutionized the FinTech industry.
Being the world’s first Peer-to-Peer currency, it has changed the traditional approach of making online transactions. Perhaps, the greatest benefit of using Bitcoin is that it is decentralized which means there is no central system or intermediary that controls the flow of this cryptocurrency.
The Bitcoin network is run by its peers and there is no involvement of any third party which makes it as private as it could ever be. All the transactions in Bitcoin are recorded on a publically shared cryptographic ledger called Blockchain.
Bitcoin for Business
There’s no denying that Bitcoin could be a game-changer for your business. There are a number of reasons as to why you should embrace this decentralized payment method for your business operations in Nigeria. The first and foremost reason to consider it for your business is the decentralized nature of Bitcoin. The latter is not regulated by any third party, intermediary or central systems like Bank.
Although this may scare a few of the early enthusiasts, decentralization has its own perks. You don’t have to rely on a bank or central system for approving and facilitating your transactions. Instead, all the Bitcoin transactions are approved by miners and added to the blockchain. This also makes the process faster and you don’t have to pay high transaction fees to the banks.
You can have your transactions processed by paying an extremely low transaction fee or no fee at all. However, paying a small fee can make the process much faster. With Bitcoin, you can choose your own fee.
Bitcoin also provides protection against all kinds of online frauds. The involvement of Blockchain makes it impregnable and highly immune to cyber-attacks. One potential risk with accepting credit/debit cards, PayPal and other similar modes is that the payments can be reversed later on approval of the bank. For instance, sometimes a customer who made an online purchase via credit card requests for a charge-back from the issuing bank after receiving the purchased item. If by any chance, this charge-back request is approved by the bank, the transaction gets cancelled and the customer receives a refund of the amount they paid. These kinds of frauds are known as charge-back frauds and they are a common occurrence these days. The merchant is accountable for whatever losses they may cause. Bitcoin payments on the other hand are irreversible. So there’s no such risk involved.
Another great benefit of using Bitcoin in your business is that you can have faster international transactions with instant validation. You can send and receive Bitcoins across borders with utmost ease. There is no additional cost involved and no amount restrictions of any kind. This and many other benefits of Bitcoin make it an ideal choice for your business.
Despite your angle on this topic and what your impressions might be, do you know what the actual benefits of adopting Bitcoin are? Twitter CEO Jack Dorsey has recently stated that he believes that Bitcoin will likely become the native currency of the Internet, so it may be worthwhile taking a closer look.
Due to the unique traits and characteristics of this cryptocurrency, Bitcoin delivers some definitive benefits and if you can position your business to take advantage, you may be able to reap substantial rewards.
Summarily, let’s have a look at the benefits of adopting Bitcoin for Nigerian business transactions:
15 Ways Nigerian Businesses can benefit from Bitcoin
- Low Transaction Fees
The fee per transaction when using Bitcoin or any other cryptocurrency is usually cheaper compared to the fees of conventional debit or credit cards. This is because these cryptocurrencies are decentralized and do not need a central bank or any other financial intermediary to manage and verify transactions. What this means, is that Nigerian businesses can reduce those fees by saving about 2% -5% on every transaction.
- Faster Transaction Processing
On the Bitcoin network, transactions are processed roughly every 10 minutes. This is true whether you are buying a coffee or transferring funds internationally. There are no required wait periods or authorisations that often slow processing down because the financial “middle men” have been removed from the transaction process. The transfer of funds is often completed in real time or after a few minutes.
- Bitcoin Currency Conversion
A number of cryptocurrency exchanges like Instantgold are available to help traders and individuals convert Bitcoins back to normal currency and vice-versa. There is no need to think that you will ever have to be locked into your Bitcoin holdings. You can cash out at any time and with very reasonable fees. The fees involved for cryptocurrency exchange are typically lower than those you would expect from equivalent currency exchange services or banks.
- Reduced Fraud
The good news for traders is that there are no charge-backs as far as cryptocurrency transactions are concerned. This is quite different from credit cards through which merchants are often inflicted with charge-backs against earlier payments.
A charge-back occurs wherever customers request refunds from the credit card company after a sale has been put through. This scenario is impossible with cryptocurrencies because all payments are final and irreversible.
With cryptocurrencies, there is also no such thing as counterfeit money and you do not have to worry about checks that bounce. The opportunities for fraud are far less prevalent with Bitcoin than they are with other forms of payment.
- Privacy and Security for Customers
Strictly speaking, when transactions are recorded on the Bitcoin network, personal data is not attached to or recorded along with these transactions. As such, greater levels of anonymity are afforded through Bitcoin transactions. As we already know, this is not the case with credit cards or with bank transfers.
In this current age that has seen our personal data and preferences being commoditized, many people have begun to place a premium on their privacy. By offering your customers this added option of Bitcoin payments, you are also offering them an extra layer of protection for their information as well.
- Bonus Publicity
Given this early stage of Bitcoin adoption within business circles, it is still interesting and noteworthy news when traders start accepting cryptocurrencies, especially if they are the first to do so in their area or industry. Interviews and features in magazines and local newspapers are still quite possible, depending on circumstances.
- New Customer Base
Simply by accepting Bitcoin payments, you can position your business for increased sales. Sometimes, all it can take is for your business to simply announce that you are receiving such payments. By accepting such currency, you are opening your business up to a customer base that might not have otherwise been accessible.
What you may find is that there are potential customers out there who would prefer to pay in Bitcoin for a variety of different reasons. Such people may desire anonymity or perhaps you may be dealing with a younger demographic that has Bitcoin in their possession and are simply seeking ways to spend it.
Bitcoin is simply a new alternative that may open your business up to a new customer base. Doing so safely, effectively and wisely can potentially enable you to reach customers with virtual wealth and that are willing to do business with you. Given that Bitcoin has a current market capitalisation of US$102,728,723,663 as at the time of writing this post should give you pause. How are you tapping into this market?
- Increased Sales Revenue
As described above, it is possible for businesses to increase sales revenue through the expansion of their customer base. Sales revenue can also be increased by businesses simply empowering their customer experience through the addition of Bitcoin transactions, as an additional option. In combination, these factors allow far more scope for your business to be even further exposed at international levels.
- Bitcoin as a Deflationary Currency
You may not be aware of this but Bitcoins are limited by the Bitcoin network itself, to a maximum of 21 million Bitcoins. There can never be any more than this number and this makes Bitcoin a scarce resource, much like gold. It is this scarcity that makes Bitcoin a deflationary currency.
What this means is that the value of Bitcoins will increase over time because there are only ever going to be a finite number of them. Demand with limited supply will continue to drive the value up and this is why some call it “digital gold”. This characteristic of Bitcoin underpins its value and should provide a large degree of confidence that its value will never drop too far. In fact, it should continue to climb steadily.
- Innovate with Bitcoin
There are real opportunities for businesses to innovate with Bitcoin and accepting such cryptocurrencies is a great way for your business to stand out from other businesses in your industry and to showcase the forward-thinking, innovative nature of your organisation. Right now in the developed countries, there are supermarkets, coffee shops, retailers, restaurants, and even yacht builders that are accepting Bitcoin. They have benefited from this addition to their business and if positioned well, your business can benefit too.
- Bitcoin as a Global Currency
Bitcoin is a global currency because it is not tied to any single government, nation or such other body. Also given that there are no central banks or finance companies involved in any way with Bitcoin transactions, transfer fees across borders or even across different currencies do not exist. This is very good news for those who often conduct international transfers.
Furthermore, exchange rates, delays and transfer fees are no longer an issue. Given that Bitcoin is truly a global currency, it has the same value everywhere. It ignores border restrictions and as long as both parties accept Bitcoin, the transactions can proceed.
- Bitcoin has an International Audience
As mentioned above, cryptocurrencies are decentralized, which means that they are not tied to, or controlled by any nation or political group. That means that Bitcoin is accessible globally and can be owned by anybody, provided of course that they have internet access and the resources with which to transact. Anyone who owns Bitcoins can store it, spend it or send it as they wish, without unnecessary interference by banks, governments or other third parties.
- Safe Regulatory Environment
In Nigeria, we have already seen that the government is trying to embrace Bitcoin and cryptocurrencies rather than restricting or banning them altogether. The Central bank of Nigeria now views cryptocurrencies as neither money, nor Nigerian or foreign currency. Instead, cryptocurrency is viewed as property and an asset for capital gains tax (CGT) purposes.
The government has given Bitcoin a home in Nigeria for not out-rightly banning it altogether and has arguably shown that cryptocurrencies have a future in Nigeria. This should provide a measure of confidence to businesses seeking to get more involved with Bitcoin.
- Bitcoin is Secure
The Bitcoin network and the ingenuity of its architecture, design and use of military-grade encryption ensure that it is incredibly secure. It is a fact that the Bitcoin network has never been hacked and in truth, it is far easier to hack a bank rather than the Bitcoin network itself. Security is a strong inbuilt characteristic of this cryptocurrency and one of the reasons it has become so popular.
- Access to Millennial
From around the globe, various studies have revealed that the vast majority of cryptocurrency users are male millennial who distrust government and are early adopters of technology. If male millennial are a market that you are trying to reach, then it may be worth considering Bitcoin and other cryptocurrencies.
Do you recognise any benefits that your business can capitalise on? If so, I would encourage you to dig deeper. Don’t let misinformation and rumours be your guides. Rather, explore and investigate cryptocurrencies with reliable information in the context of your own business, customers and environment. Yes, it is a learning curve, but Nigerian businesses willing to grow and adapt to meet the will be rewarded.