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Should your business start accepting Bitcoins?

Christopher Null | May 21, 2013
Will the alternative currency make or break the bank?

On the other hand, working with Bitcoins isn't easy. Pricing is the biggest challenge: With a currency this volatile, you must either update prices daily (or multiple times daily) or, as Josh Tordsen of Gigastrand does, let the shopping cart manage exchange rates in real time. And once you have Bitcoins, what do you do with them? Exchange them for dollars or hold on to them in the hopes the rollercoaster ride keeps getting better? (Most seem to be keeping them because they just want to see what happens.)

So far, businesses working with Bitcoins seem relatively happy. Domain registrar Namecheap has been accepting Bitcoins for its services for about three months. CEO Richard Kirkendall says, "We haven't had any problems at all," but notes that Bitcoin-denominated sales are still a tiny percentage of his company's overall sales. Even more experienced Bitcoin users report that only 1 to 2 percent of sales volume involve them.

Nonetheless, this is a real, happening thing and a growing phenomenon. A Forbes writer even lived exclusively on Bitcoins for a full week recently, and while it wasn't always easy, she made it through without starving. Total expense for a week of living in San Francisco: 4.85 Bitcoins.

For now, this is all fascinating stuff, but I'd be hard-pressed to suggest businesses jump on the bandwagon any more than they should start accepting euros or Canadian dollars. The work involved in accepting the currency isn't negligible, and you risk spending more time watching Bitcoin exchange rates than actually running your business.

On the other hand, if you're convinced this is going somewhere, why not? Sure, it's a gamble, but it might be a fun way to keep one eye on the future. And chances are you aren't going to make enough in Bitcoins for it to really matter anyway, at least not for now. As Tordsen puts it, "Whether we win or lose in the Bitcoin Market is not going to have much of an impact."

 

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