How to Start Accepting Bitcoin in your Business

Step One: Understand Bitcoin

With all those blocks and chains, Bitcoin can get complicated. Before you start, make sure you understand the benefits and disadvantages of the cryptocurrency, as well as some of the basic mechanics behind it. While bitcoin is secure, simple and has a much smaller processing fee than credit cards, prices are still volatile and can rise and fall hundreds of dollars in just a day. What your customer pays you could be worth more or less the very next day.  When you use bitcoin, you are allowing your customer to send you money without a third party, meaning there is no bank in between the transaction. And when it is sent, it is completely digital. Before you start, also learn about the blockchain – the complex central program behind bitcoin that acts as a ledger for each transaction made.

Step Two: Set Up a Wallet

Wallets do exactly as advertised: hold your bitcoins. There are hundreds of different wallets available, each supporting different operating systems or platforms ranging from your computer, phone or internet browser. Each wallet offers different levels of security and anonymity, as well as different features ranging from server backups to USB options and fingerprint unlocks. Some are free, while some require a fee. There are plenty of wallets - Blockchain, Coinbase, Armory and Mycelium are the most popular. Research to find out which one offers the balance of security, simplicity and features you need.

Step Three: Let the People Know

No point in taking bitcoin if there’s no one to use it, so it’s important to make sure your local community knows. You can register your business on online directories that track different companies and businesses that accept bitcoin. Reach out to popular apps like Coinmap to include your business on a map with other bitcoin-accepting locations. Also contact local cryptocurrency meetups, gatherings and news-sites so the community knows about you. And don’t forget to place your bitcoin sticker on your window or the option to pay on your site! Advertising raises awareness about this new way to pay and might encourage someone to try bitcoin for the first time. 

Step Four: Make the Transactions

Now that you have a wallet and customers, you are ready to earn some bitcoin. Your crypto-savvy customers will make payments directly to your wallet through a one-time use address, often in the form of a QR code (the address will be changed each time you go through a transaction). Many places will use other programs to generate multiple addresses and store them beforehand so they don’t need to make them on the spot. Businesses often use tablets or hardware specifically to display the QR codes. Many also include premiums for using it. Once sent, the payment gets verified and the bitcoins will be in your wallet. That simple!  Oh, and bitcoin isn’t a workaround taxes. What you earn in bitcoin still counts as income and needs to be paid.

Step Five: Keep an Eye Out

Bitcoin, while quite successful, is in an incredibly volatile market. Prices have skyrocketed since its beginnings, but many fear it will drop over time. While debate over bitcoin’s future goes on, make sure to consistently check the price of bitcoin. Think of it like a stock or investment and try to find a price you feel comfortable selling at. Bitcoin’s exchange rate, just like other currencies, is determined by supply and demand, and what its buyers are willing to pay. Due to its small size, it doesn’t take much for the market to move. When you are ready to cash out, you can use one of the bitcoin ATMs scattered though major cities to trade your digital coins for dollars. Online exchanges also serve as marketplaces. Check local meetups or online sites like Craiglists to find people looking to exchange bitcoin for cash. Many of these individuals are willing to trade coin via Google Wallet, cash deposits or other mainstream transfer methods. 

Read our cryptocurrencies feature in the upcoming November/December issue of i3.