What is Bitcoin?
Bitcoin is a new form of money and payments network that cannot be inflated, censored or controlled by anyone – including governments. Bitcoin is a free and open source protocol, like those that make up the internet, not a company or organization. This means everyone is free to run the Bitcoin protocol and ‘be their own bank’, sending and receiving transactions to or from anyone they want anywhere in the globe at any time. Transactions of bitcoin are secured by a decentralized network of nodes running Bitcoin software.
What can Bitcoin offer local businesses?
Accepting payments in Bitcoin can save your business up to 3% in fees that are currently going to payment providers and card networks. If your profit margin is just 10%, that means a 30% increase in profit just by adopting Bitcoin!
Bitcoin payments are cheaper than credit card payments for a simple reason: competition. Instead of one of a handful of card networks and banks processing your transaction, in Bitcoin there are billions of parties competing to process that transaction.
Turning on Bitcoin payments for your business only takes a few minutes with a tool made for businesses like IBEX PAY. With this tool, you can choose to keep the bitcoin your customers pay you or automatically convert any percentage of each payment to dollars in your bank account. IBEX charges just 0.5% for Bitcoin payments, and a total of 2.2% for transactions converted from bitcoin to dollars. You can also accept bitcoin with a free smartphone wallet like Muun Wallet, but this solution lacks the business features of IBEX.
Comparing Bitcoin to the Traditional Financial System
This all may sound very abstract, so let’s make some analogies to the existing banking and monetary system.
- Denominations
- In the existing monetary system we have multiple denominations for our currencies, such as dollars and cents.
- In Bitcoin, we have denominations of money as well, like ‘bitcoin’ and ‘satoshi’ (1 / 100,000,000 of a bitcoin) – these are different denominations of the same currency.
- TotalSupply
- In the existing banking and monetary system, a central bank such as the Federal Reserve can create more of the monetary unit – dollars – based on the decisions of a few unelected people. When the Fed increases the money supply, they transfer spending power away from holders of dollars (like you and I) to their preferred partners like banks and governments.
- In Bitcoin, nobody can create more bitcoin out of thin air, and the total supply is capped at 21 million bitcoin.
- Payments
- When you make a payment with a credit card or a tool like PayPal, many intermediaries are involved in routing that payment, causing delays and fees to pile up. These intermediaries can also shut down your ability to pay and essentially ‘freeze’ your money at any time.
- In Bitcoin, there are no intermediaries in your payments, so payments of any size between anyone anywhere are settled in minutes, with minimal fees and no risk of a ‘freeze’.
- System Rules
- In our traditional financial system, banks and governments control the money supply and payment networks, allowing them to constantly change the rules in what we are told is a ‘free’ market economy, often hurting small businesses like yours.
- In Bitcoin, the rules of the system are simple, transparent, and impossible for anyone to change. There are no rulers in Bitcoin, only rules. Like the laws of physics, you cannot argue with Bitcoin or change how it operates by passing legislation – we can only learn to live by its rules.
Bitcoin: A Savings Account for the 21st Century
In our modern economy, it is nearly impossible to find any asset to reliably save in, due to the constant money printing of our central banks to fund out-of-control government spending and bailouts. Every asset class is now ‘overbought’ and susceptible to extreme volatility.
Bitcoin, with its limited supply and system of ‘rules without rulers’, serves as a lifeboat anyone can climb on to escape the turbulent financial world. In the short term, Bitcoin feels the waves and we see high volatility for the exchange rate between bitcoin and dollars. However, over periods of four or more years, we see bitcoin only going up in value against the dollar and other ‘fiat’ currencies controlled by central banks. One way to slowly get on board the lifeboat is through ‘dollar cost averaging’, which means saving a set amount of dollars in Bitcoin regularly.
Swan Bitcoin is perfect for dollar cost averaging in to Bitcoin. Start building your savings account today!
Attracting Customers with Bitcoin
Those in the Bitcoin community love to support businesses that accept and hold bitcoin. To let the community know you’re accepting bitcoin, reach out here to the team behind the Oshi app to get listed on their map of bitcoin businesses. If your business has a Twitter account, reach out to @BitcoinMagazine, @bitrefill, and @OshiApp to let them know about your business and that you’re accepting bitcoin.
Want to learn more about Bitcoin?
If you’d like help setting up IBEX PAY for your business or generally want to chat about Bitcoin, you can email me at captainsidd@protonmail.com.
Here are a few readings to help you better understand Bitcoin and why it exists: