More and more businesses are accepting virtual currency transactions, but are they for you?
Like all things there are some pros and some cons. They include:
Transactions are not taxed—because many virtual currencies, like bitcoins, are treated as assets rather than currencies there is still no taxation on a virtual-currency transaction.
There are no third-party fees—with no middleman, such as a bank or credit card company, there is none of the associated cost.
There is no third party so security is better—again, because there is no stepping stone within the transaction, it will, in theory be more secure.
It is easy to set up—once you’ve made the decision to go into virtual currency, the set up is relatively straightforward and, again, involves no middleman fees.
There is little or no regulation—thus far the world of virtual currency is unregulated. The upside of that is that there is very little bureaucracy involved, but the downside is that if something goes wrong—theft or fraud for example—there is little or no legal structure with which to fight back.
Transactions can be subject to cyber crime—because virtual currencies are still relatively new, merchants using them are favorite targets for hackers.
The currencies are volatile—virtual currencies have seen extreme fluctuations in their values; you can make a fortune overnight but you can also lose a fortune overnight!
The transaction is not insured—if you accept or pay for goods or services using a credit card, the credit card company will also insure the transaction. There is no such coverage with virtual currencies.
And that last is an essential factor when thinking about moving your business into virtual currency.
Most traditional insurance policies will cover you against fraud, theft, or losses sustained during an interruption to your e-commerce. But those traditional policies will most likely not cover similar issues involving virtual currency. So…before you bite down on that virtual coin, weigh up the pros and cons and talk to your agent or broker to see what, if anything, they can provide you in insurance.