Bitcoin (BTC) was made possible by the people who believed in it, and its future is heavily dependent on the torchbearers of this legacy — the general public. While Bitcoin’s rise from an online blog post into mainstream finance is worthy of a novel in itself, the constant support from the ecosystem of traders, miners and users has helped Bitcoin beat all odds and grow into one of the most profitable assets in humanity’s financial history.
Living the dream in cryptoland would ideally translate to buying a cup of coffee from a local store with Bitcoin. And the good news is that many businesses across the globe have started accepting the truly borderless currency. Given the increase in Bitcoin’s acceptance and considering the possibility of a great return on investment, the new generation of business owners wants to accept Bitcoin as payment for their services. But how?
The Bitcoin ecosystem currently hosts a plethora of players offering a safe place to store Bitcoin among other cryptocurrencies. However, the risk of storing the asset with an unsafe provider is very real, which can ultimately lead to losing your Bitcoin forever.
Here are various options available to get going with Bitcoin acceptance in a few clicks.
The essentials to accept Bitcoin
Bitcoin wallet — This is like your leather wallet where you store cash. The only difference is that it’s digital and that it stores Bitcoin. As someone running a business, always remember that a Bitcoin wallet can only accept BTC and no other form of cryptocurrencies.
Many wallet services allow users to store multiple types of cryptocurrencies using different addresses. Bitcoin wallets are protected by passwords and private keys and are the only possible options to gain access to the funds.
Bitcoin address — Every Bitcoin wallet comes with an address. This address will be unique to your wallet and can be shared with others to receive payments. Wallets also have the option to convert the Bitcoin address into a scannable QR code, which can be displayed at the store.
However, if you make a transaction to a wrong address or with an unsupported currency, the underlying technology will not allow users to reverse or cancel it. Since the creator of Bitcoin, Satoshi Nakamoto, did not hire a customer service agent before disappearing for good, it is impossible to request a refund on your Bitcoin transactions.
Private key — The private key acts as a mathematical gateway to your Bitcoin reserve. Without this key, you instantly lose access to your BTC wallet. While all Bitcoin wallets have a unique private key, digital wallets often have options to log in through passwords. In either case, it is recommended to store a copy of this information on other devices such as USB sticks as a backup.
All you need to accept Bitcoin
After getting familiar with the basic requirements to hold and store Bitcoin, there are a few more steps that need to be taken to set up a business for accepting BTC payments. One of the best practices is to do your own research and identify the platforms and services that best meet your business and regulatory needs.
Look out for local regulations — Before you put up a sign that says “Bitcoin accepted here,” it would be wise to check for regulations in your jurisdiction. Accepting Bitcoin in disputable geographies may incur serious legal charges ranging from hefty fines to jail time.
Wallet options — Setting up a new Bitcoin wallet is as easy as signing up for a new email address. Some of the most common platforms for a Bitcoin wallet include cryptocurrency exchanges, and online (websites) and app-based wallets. Businesses also have the option to procure point-of-sale machines for collecting payments in Bitcoin through cards.
Recommending wallet options is risky because the wallets are only as safe as the intent of the private companies hosting your BTC reserves. To help you get first-hand information on the latest and greatest in Bitcoin innovation, take a look at our beginner’s guide for you to find the best places to discuss Bitcoin and how to subsequently choose the best BTC wallet.
Online businesses can also make use of third-party payment processors, such as Coinbase and BitPay, to set up website payments gateways for BTC transactions. To see how a store that processes BTC payments operates, check out the Cointelegraph Store.
What to be aware of
Considering the massive price volatility, businesses are advised to maintain invoice copies with Bitcoin’s price based on the time of the transaction. This will help you keep track of your “true” income.
Taxes calculated on Bitcoin transactions are heavily dependent on local jurisdiction. For example, the United States considers Bitcoin as property and will tax it differently compared to a jurisdiction that accepts it as a currency. Portugal currently leads this space, allowing citizens to trade cryptocurrencies tax-free since 2018.