Cryptocurrency Adoption Rate & the Pros & Cons of Accepting Payments
Written on 3.28.24
I must admit, when I first learned about cryptocurrency, I was very dubious -- my reasoning? Nothing. I just didn't understand it. I didn't realize until years later that it's not at all complicated, and it's incredibly secure.
In just over a decade and a half, cryptocurrencies have grown from digital novelties to trillion-dollar technologies with the potential to disrupt the global financial system. That potential, is becoming a reality - and fast.
For me, it wasn't until 2017 that I elected to set up my business to take cryptocurrency. It worked well; fast, seamless, secure. In fact, multiple news outlets and Bellevue's own 425 Business Magazine wrote press release stories about our decision; showcasing that we were one of the first companies of our kind to take cryptocurrency in Washington State.
An increasing number of investors now hold bitcoin and hundreds of other cryptocurrencies as assets and use them to buy a swath of goods and services. With each month that passes, more and more businesses are taking cryptocurrency as a legitimate form of payment; e.g. Amazon, Tesla, Home Depot, Lowes, Kroger, Best Buy, GameStop, Microsoft, NewEgg, Sony PlayStation Store, 1-800-FLOWERS, Abercrombie & Fitch, H&M, Adidas, American Eagle, Banana Republic, Saks Fifth Avenue, Barnes & Noble, Whitehouse Black Market, Wayfair, GAP, Old Navy, Pottery Barn, Bass Pro Shops, Bath & Body Works, Guitar Center, Cabela's, Burlington Coat Factory, Delta, Petsmart, Uber, Chevron and Texaco.
After a little research, I was shocked to see certain restaurants and fast food chains setting themselves up for crypto: Chipotle, Dominos, Coldstone Creamery, Baskin Robbins, Subway, DoorDash, GrubHub, InstaCart, Uber Eats, Flemings Prime Steakhouse & Wine Bar, Jersey Mikes, Red Robin, Total Wine & More, Bahama Breeze, Steak & Shake, Burger King, Panda Express, LongHorn Steakhouse, Outback Steakhouse, Red Lobster, Olive Garden, Ruth's Chris Steakhouse.
Even Real Estate purchases with dozens of title companies such as, Cypress Title, Clear Title Group, Cornerstone Title, Guaranty Escrow, Sunbelt Title, West Coast Escrow, and many more.
Benefits of Cryptocurrency Payments
Cryptocurrency has become an easy way to accept payments from around the world. Featuring instant settlements, low fees, and broad asset support. Some of the many unique benefits include:
You Can't Keep A Good Thing Down
What the customer wants, will find a way. With every new technology and methodology, they're sure to come complete with the naysayers and the know-it-alls. Crypto has certainly had its ridicule and challenges from those who fear change.
What's clear, however, is that in spite of the hurdles directed towards the asset class, the developments we've witnessed over the past year have defied expectations. They are evidence that crypto is here to stay. This years forecast (2024) is looking very strong.
"We believe that 2024 will provide favorable macro tailwinds for risk assets and, perhaps more critically, that the foundations for crypto regulation will continue to be built, facilitating long-term adoption." -David Duong, CFA, Head of Institutional Research, Coinbase
The challenge now is to seize the moment and build something better.
I intentionally stay abreast of the new Fintech, Proptech, and Regtech developments, and I'm pleased to see the creative direction it's going. It is especially motivating to see advancements in cryptocurrency payment widgets and plugins coming to market, effectively bolstering the popularity of electronic currency and its adoption.
These advancements are streamlining the user experience with an ease of use that hasn't existed before today. One of the popular discussions (and adoptions) is centered around Web3 technology. The moniker is a convenient shorthand for the project of rewiring how the web works, using blockchain to change how information is stored, shared, and owned. In theory, a blockchain-based web could shatter the monopolies on who controls information, who makes money, and even how networks and corporations work. Advocates argue that Web3 will create new economies, new classes of products, and new services online; that it will return democracy to the web; and that is going to define the next era of the internet.
"We believe that the groundwork for a better crypto user experience is being built, which will help the industry cross the chasm from early adopters to mainstream users. We believe developers will continue building towards real world use cases — the foundations of which are already evident." -David Duong, Coinbase
Cryptocurrency Adoption Rates
Coinbase's Head of Institutional Research and CFA, David Duong wrote in the beginning of the '2024 Crypto Market Outlook' report that,
"The total crypto market cap doubled in 2023, which suggests that the asset class has already exited its "winter" and is now in the midst of a transition."
Those who are 'up to speed' on cryptocurrency have already felt the tailwind as of late, but to those who are on the sidelines, or who have just made their first investments, this is very good news. Especially in light of the fact that a lot of flack and vilification has been directed toward the cryptocurrency revolution.
According to the Security.org article 2024 Cryptocurrency Adoption and Sentiment Report, says that, "Since conducting our first study in 2021, crypto awareness and ownership has continued to grow. Fewer than half of respondents were aware of cryptocurrency in 2021. But today, more than 80 percent said they were familiar with the financial technology." Further facts and figures from the article are as follows:
Current owners and non-owners who are familiar with cryptocurrencies think that 2024 could be an excellent year for crypto prices. As for institutions, David Duong writes, "We believe institutional flows will remain anchored on Bitcoin, at least through the first half of 2024."
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Crypto advocates argue that digital stores of value (cryptocurrency) have an important role in this emerging shift from a unipolar to multipolar world, as the value of having a supranational asset (having power or influence that transcends national boundaries or governments) that is not owned or controlled by any single country seems evident.
Monetary transformations often take place in periods of socioeconomic upheaval that are only understood well after they happen, like paper money in 11th century China, promissory notes in 13th century Europe, or credit cards in mid-20th century America.
Others fear we are inching closer to the "One World Currency" that the book of Revelation references in the Bible, promoting we are nearing Jesus' return, and the end of the world.
Pros & Cons of Accepting Cryptocurrency Payments
The 2020 pandemic led to a surge in credit card fraud, and since then has continued to rise. Credit card fraud was the most common type of identity theft in 2022*. And, unfortunately, small businesses** are often the target of payment fraud and data breaches.
Cryptocurrency is considered more secure*** than credit and debit card payments. This is because cryptocurrencies do not need third-party verification. When a customer pays with cryptocurrency, their data isn’t stored in a centralized hub where data breaches commonly occur. Rather, their information is stored in their crypto wallet and is thoroughly encrypted. Plus, the blockchain general ledger is used to verify and record every transaction, making it very difficult, if not impossible, to steal someone’s identity.
Once a cryptocurrency payment goes through, it is permanent. This can be a double-edged sword for small businesses. “Transactions can be refunded only by the party receiving the funds. Businesses that accept Bitcoin should be prepared for the possibility of customers requesting refunds, and keep track of how much money each customer has paid. There are no chargebacks to worry about, and if someone requires a refund, the retailer has to manually pay them back.
2. Pay Lower Fees
Merchants are responsible for paying transaction fees, as well as setup fees for many payment processors. PayPal****, for instance, charges close to 4% per transaction (and sometimes more). Cryptocurrencies charge much lower fees, if any. Some bitcoin exchanges offer fees under 1%. Likewise, if your business serves customers overseas, cryptocurrencies can help avoid international currency payment fees. This is because cryptocurrencies aren’t tied to a country of origin or national bank. As a result, businesses don’t wait for payments to clear a foreign bank or pay the costs.
3. There Are Tax Implications
The IRS considers cryptocurrency to be “property*****” for tax purposes. This means that if you accept cryptocurrency, you must report it as gross income based on its fair market value when it was received. In other words, each time you sell, buy, or use Bitcoin, you're subject to a capital gains tax.
The IRS rules for accepting cryptocurrency also mean that you must keep track of the value for each cryptocurrency on the day it was received and the day it was sold.
4. Inflation Resistant
Crypto supporters appreciate that this currency is considered immune from inflation. Governments can’t manipulate the value of cryptocurrencies, which is both a risk and a benefit. On one hand, cryptocurrencies are a hedge against monetary inflation. On the other hand, the value of bitcoin and other crypto is extremely volatile.
Adoption Rates Around The Globe
Your best days are ahead! ??
-Blake E. Robbins
*Security.org images representing data and statistics are taken from analysts who conducted their annual cryptocurrency study for the 4th consecutive year; the current year’s research includes insights from over 1,500 Americans and gauges consumer sentiment and key factors in cryptocurrency adoption.
*Article from: The Ascent is a Motley Fool service that rates and reviews essential products for your everyday money matters.
**Article from: PYMNTS is a recognized global leader for data, news and insights on innovation in payments and the platforms powering the connected economy.
***Article from: Forbes: "One constant is our highest standards for quality and trustworthy journalism."
****Article from: The IRS mission is to provide America's taxpayers top quality service by helping them understand and meet their tax responsibilities and to enforce the law with integrity and fairness to all.
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