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How Accepting Bitcoin Can Help Your Business Grow

Bitcoin was originally designed as electronic cash—and for businesses, there are clear benefits to accepting payments in the cryptocurrency.

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In brief

  • Bitcoin was conceived of as an “electronic cash” system.
  • A growing number of merchants are accepting payments in Bitcoin and other cryptocurrencies.
  • The most popular method is a hybrid model where crypto remittances are settled with the help of a corresponding processor.

Although it’s often referred to as “digital gold”, Bitcoin was originally conceived of as a “peer-to-peer electronic cash system”. As recently as February 2020, more people claimed that its main use is for online payments rather than for investment, according to a survey by the Economist Intelligence Unit.

With PayPal now enabling its users to buy Bitcoin and pay merchants using crypto, it seems that mainstream use of cryptocurrency for online transactions is only set to grow. So what’s in it for businesses?

Direct Bitcoin payments

When one hears the phrase “crypto payments,” perhaps the most logical image that springs to mind is “a customer directly gives a merchant Bitcoin and receives goods or services in return.”

However, although it’s popular among some crypto-focused businesses, like Bitcoin-themed sock company MtSocks, it’s actually the least popular method of implementing crypto remittances among merchants today.

Speaking to Decrypt, Quantum Economics’ analyst Jason Deane explained that the traditional finance industry is not yet ready to let go of fiat currencies and fully embrace crypto on its own. While there is definitely a positive PR for a company that announces its support for BTC, right now Bitcoin is suited only for the most forward-looking firms.

“The reality is that Bitcoin is still hard to accept in its native form at point-of-sale, and systems still have a long way to go to make this slick and seamless. It also creates a number of issues with accounting, both at point-of-sale and in terms of bookkeeping,” Deane noted.

He added that most people are getting around this by ascribing a fiat value at the time of a transaction, but it’s not ideal and it can create additional tax liabilities if Bitcoin is stored and converted back to fiat at a later stage. These issues, combined with wild price swings Bitcoin is known for, complicate the matter even further.

“So, right now, Bitcoin is suited for the most forward-looking ‘cool’ companies, more likely to be an independent than a chain (retail) or publicly owned (corporate), with media presence and a PR angle,” Deane summarized.

However, he added, widespread, native adoption is inevitable. “It could well be that these earlier adopters, while having to suffer the pain of volatility and clunky payment systems, will be seen as market leaders and pioneers ultimately.”

Bitcoin-fiat hybrid payments

Another form of crypto payments emerged over the past couple of years—crypto remittances that are settled with the help of a corresponding processor. This method allows merchants to accept digital assets from their customers, but ultimately receive fiat for their goods and services.

Using this method, a customer indeed pays with crypto, but those coins don’t go directly to a merchant. Instead, a payments processor receives them, turns them into fiat and then sends those funds to their client. This way, while the payments may still be considered “crypto,” a business can receive its money without worrying about underlying processes. Notably, PayPal is offering this exact scheme to its merchants—to the ire of some crypto diehards. At the same time, implementing crypto payments today is as easy as embedding an API on a website.

According to Max Krupyshev, CEO of crypto processing service Coinspaid, this hybrid model is preferred by the overwhelming majority of mainstream merchants that want to integrate crypto payments on their platforms. While this is not a magical elixir that can boost a company’s profits overnight, accepting Bitcoin can be really beneficial for businesses—some much more than others.

The benefits of accepting Bitcoin

While traditional payment networks such as Visa or Mastercard are widely distributed across the globe, these systems are heavily controlled and regulated. This means that merchants can encounter unforeseen road bumps and limitations when setting up their payment channels. Not so with Bitcoin, which offers much more freedom and hassle-free operations compared to traditional finance.

Apart from that, transaction fees are often lower with crypto. Traditional payment processors usually take a cut of 2% from every sale on average (naturally, this figure may vary). In the case of crypto payments, this fee is reduced by at least half—to an average of 1%, Krupyshev noted.

Still, the main advantage of digital assets from a merchant’s viewpoint is that “crypto gets things done,” he explained. That means that a large established company—such as Amazon, for example—is unlikely to support cryptocurrencies any time soon, because things are working fine as it is. On the other hand, if a business is having some kind of issues with its current payment systems, Bitcoin may very well help solve at least some of them.

In particular, so-called “high-risk” enterprises—businesses that are not illegal per se but colloquially deemed somewhat ethically gray—can benefit greatly from using crypto payments, Krupyshev explained. Services that provide adult videos, live streams or even gambling and dating sites may often fall victim to mass chargebacks—even if customers actually receive what they paid for. Notably, in September 2020, adult site PornHub added Bitcoin payment options to its site, fulfilling a prediction made by Bitcoin creator Satoshi Nakamoto back in 2010.

Businesses that have more than 2% chargebacks may also be penalized by their traditional payment processors—not so much with crypto. Since blockchain transactions are immutable, companies can be sure that shady actors won’t try to exploit the system. While this may not sound beneficial for customers, reputable firms usually offer some kind of a refund system that implies mutual agreements—but not one-sided and sometimes fraudulent chargebacks.

Thinking globally

Another big advantage of implementing crypto payments is that digital assets are essentially borderless. Traditional finance solutions may differ drastically on a region-by-region basis, requiring merchants to set up their payments infrastructure in each locale individually. In contrast, Bitcoin can be paid with and accepted in any part of the world with equal ease.

“As a business, this lets you think not geographically, but in terms of user groups. For example, if you’re an online business and you sell some services over the Internet, it doesn’t matter whether your customers are from India, Latin America or Russia,” Krupyshev told Decrypt, adding that “By accepting crypto, you can direct your marketing not at any given region where you have already established payment methods, but at specific customers—no matter where they’re from.”

He also echoed Deane’s sentiment, noting that crypto payments are still “hyped” enough, especially among younger generations, to warrant some extra attention thanks to this fact alone. Thus, all a business needs to set up shop is a specialized API and a website translated into the required language.

Are these “true” crypto payments?

However, since most of the merchants that accept crypto do so through fiat in the end (partly because they don’t know how to, or don’t want to bookkeep digital assets), doesn’t this defeat one of the main purposes of Bitcoin—the removal of intermediaries? To a degree, Deane explained.

“It’s interesting because back in the day, I would have argued that this wasn’t ‘proper’ Bitcoin adoption, but my stance has softened a bit since then,” he said. “After all, the value of that transaction has come from the Bitcoin behind it; the fiat conversion is merely a vehicle to make that transaction easier.”

This way, a customer still wants to spend his Bitcoin and does so because his wallet balance goes down, the vendor wants to be paid in fiat—and they are paid in fiat, a payment processor then takes a cut of the transaction as normal and is the only party who collects Bitcoin.

“It all still works. No reason, in truth, it has to be a hard and fast native transaction. Best bit? This can happen now and already is,” Deane concluded.

Blockchain

TrustToken and Syscoin Partner on a Stablecoin Bridge

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Decentralized marketplace and e-commerce protocol Syscoin has partnered with the stablecoin platform TrustToken.

The goal of the collaboration is to speed up payments and to provide further solutions to Ethereum’s blockchain. It also means that the five stablecoins of TrustToken, namely TUSD, TGBP, THKD, TCAD, and TAUD, will run on Syscoin’s blockchain and be available for users.

A Collaboration Between Syscoin and TrustToken

According to a release shared with CryptoPotato, the popular decentralized marketplace and e-commerce protocol Syscoin has teamed up with stablecoin platform TrustToken.

Right off the bat, this means that the stablecoins provided by the platform will now run on Syscoin’s blockchain as well. These are TUSD, TGBP, THKD, TCAD, and TAUD.

Stablecoins have grown in popularity over the past few months, mainly because of the DeFi boom, where they are used to enable staking, liquidity provision, and so forth. However, there was also an obvious challenge with all of it – scaling. Supposedly, Syscoin is intended to help with that. Using Z-DAG (Zero Confirmation Directed Acyclic Graph), the protocol claims to be able to settle transactions in less than 10 seconds with comparatively low fees.

The partnership will also enable users to mine two cryptocurrencies at the same time – SYS and BTC.

Distribution of the Roles

While Syscoin’s task would be scalability, TrustToken comes in for the stablecoin part. It’s a platform that aims at an open financial system through a selection of stablecoins.

The stablecoins it offers are collateralized, and it has also partnered with Chainlink, as well as other protocols.

The overall partnership is aimed at creating a solution for scalable and secure token payments at a lower risk interoperability with Ethereum’s network. It should make TrustToken’s stablecoins function quicker and cheaper following the enabling of the bridge.

Speaking on the matter was Syscoin’s Foundation Chairman Jag Sidhu, who said:

“Digital assets have growing needs for better usability, robust decentralized security, and a scalable way of ensuring every transaction complies with regulations. Syscoin uniquely aligns with all of these requirements. We look forward to TrustToken’s family of stablecoins becoming future-proof and gaining significant advantage with Syscoin.”

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Source: https://cryptopotato.com/trusttoken-and-syscoin-partner-on-a-stablecoin-bridge/

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Visa And BlockFi Partner To Release A Bitcoin Rewards Credit Card

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  • The US-based cryptocurrency lending company BlockFi has partnered with the American multinational financial services corporation Visa to bring Bitcoin to the masses.
  • Bloomberg reported that the two US companies will offer a credit card that rewards clients’ purchases with the primary cryptocurrency, instead of traditional options such as cash and airline miles.
  • Dubbed the Bitcoin Rewards Credit Card, it will allow customers to receive 1.5% of their purchases back in BTC. 
  • Should the user spend more than $3,000 in the first three months after receiving the card, he will be entitled to a bonus of $250 in bitcoin. However, the innovative card will come with a $200 annual fee.
  • Evolve Bank & Trust, a subsidiary of Evolve Bancorp Inc, will be the card’s issuer. All three parties involved plan to launch the card in early 2021.
  • Founder and Chief Executive Officer (CEO) of BlockFi, Zac Prince, commented that his company is “excited to add credit cards to our suite of products and expand Bitcoin’s accessibility to a broader set of customers.”
  • With the BlockFi partnership, Visa has doubled-down on its endeavors with bitcoin-related collaborations. Earlier this year, the US giant and the BTC-friendly shopping app Fold launched a Visa co-branded debit card that rewards users with up to 10% of BTC back for every dollar purchase on retailers like Hotels.com, Nike, Starbucks, and Uber. 
  • BlockFi raised $50 million in Series C funding earlier this year, and Morgan Creek Capital’s Anthony ‘Pomp’ Pompliano joined its board of directors.
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Source: https://cryptopotato.com/visa-and-blockfi-partner-to-release-a-bitcoin-rewards-credit-card/

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Australian Crypto Exchange Accidentally Exposes Over 270,000 Customer Emails

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The Australian cryptocurrency exchange, BTC Markets, has inadvertently exposed more than 270,000 emails of its customers. The company apologized for the inconvenience and reassured that all other data, including users’ funds, is safe.

BTC Markets Exposes Customers’ Emails

A user going by the Twitter handle Stevosxrp.crypto took it to Jack Dorsey’s social media giant and Reddit to first complain about BTC Markets’ screw up. The Australian-based exchange later confirmed the breach on its official Twitter account.

The statement explained that BTC Markets “uses an external system to send client-wide emails.” Although the exchange has used this service for years “without an incident,” including sending test mails, this time, the testing “didn’t pick up that the sample email addresses in the batch were added to the same email, rather than sent individually.”

Consequently, the names and email addresses of account holders were exposed. BTC Markets claimed that this process was instant; therefore, “it was not possible to stop the batch send once the error was realized.”

The CEO of BTC Markets, Caroline Bowler, later revealed that all account holders were affected because the emails were sent in batches.

Funds Are SAFU, But The Damage Is Done

The exchange said that it will “self-report” to the Office of Australian Information Commissioner and “fully comply with the data breach reporting requirements.” Furthermore, the company plans to conduct an internal review.

Despite the data leak, BTC Markets reassured its users that the platform is still secure, no passwords were revealed, and all customers’ funds are safe.

Nevertheless, the exchange suggested that users’ should enable two-factor authentication (2FA) to enhance the security of their accounts.

None of those reassurances seemed to have an effect on the users, though. The Twitter thread explanation was met with numerous complaints from customers.

While most highlighted their disappointment with having their personal emails and names revealed, some took it a step further. One user claimed that the BTC Markets’ name is “now as good as dog s**t.”

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Source: https://cryptopotato.com/australian-crypto-exchange-accidentally-exposes-over-270000-customer-emails/

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