Running head: BITCOINS 1

Bitcoins

Name

Institutional Affiliation
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Abstract

While many companies have grappled with the decision to add PayPal or Apple Pay to the

payment techniques, the capacity to accommodate bitcoins is different. Accepting a Bitcoin is

like accepting foreign currencies than adding a new method for processing payments. Using

Bitcoin as a standard form of money has various merits, but it also poses some demerits.

Organizations should weigh the merits and demerits before accepting bitcoin as a means of

payment. The paper describes the reasons why some businesses accept, while others reject

bitcoin as a technique of payment. It further outlines significant organizations that use bitcoins in

business transactions.
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BITCOINS

Introduction

Bitcoin refers to a cryptocurrency invented in 2008. It is a kind of currency that lack any

physical form, established and traded electronically. Clients and organizations can use Bitcoin to

purchase commodities online. It is also designed to safeguard financial transactions that do not

need a central authority, financial institutions, and governmental agencies. Besides, Bitcoins are

transparent and easy to use. However, Bitcoin is an unregulated commercial product. This

exposes its users to unlawful and risky operations. It also lacks consumer protection and prone to

theft, hacking, and reduction of value due to volatility. Proper evaluation of the pros and cons of

Bitcoins allows organizations to make suitable decisions concerning Bitcoin.

Reasons why Organizations use Bitcoin

Bitcoins support affordable and borderless transactions. This allows clients across the

world, including those without traditional banks, but can access the internet to purchase an

organization's products and services (Sharma & Sharma, 2018). This capability allows

organizations to reach more customers and earn additional revenues. Besides, Bitcoins enable

organizations and clients to exchange large payment amounts immediately (Harrison, 2018).

This quick support delivery of products and money transfers. Bitcoins are also not regulated by

any particular nation's exchange rates. They are globally recognized and very attractive for e-

commerce organizations. Moreover, Bitcoin allows businesses to move capital in diverse places

quickly (Douma, 2016). This supports a new wave of international innovation and productivity.

Furthermore, Bitcoins allow organizations to control their transactions. This capability

assists in keeping Bitcoin safe for the network. Users are unable to charge extra charges minus

notifications. Organizations must communicate to the client before increasing the fees (Naware,
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2016). Besides, organizations can make and complete Bitcoin payments minus personal data

associated with the transactions. Since bitcoin safeguards a company's private information from

unwanted people, it protects identity theft. The Bitcoin wallet also has encryptions and a back up

to guarantee money safety (Naware, 2016). Therefore, organizations use Bitcoin to secure their

transactions and avoid additional charges.

Similarly, Bitcoins transaction fees are cheap. Users are charged minimal commissions

for faster processing (Stegaroiu, 2018). For instance, the charges for transacting 100 dollars

using a credit card are 3.37 dollars (Dumitrescu, 2017). However, a bitcoin transaction of the

same value costs approximately 0.67 dollars. This implies credit cards are five times costly in

this transaction. Therefore, organizations adopt bitcoins to minimize procurement costs and

introduce transparency to business operations.

Reasons Why Organizations Reject Bitcoins

It is very risky to invest in bitcoins since the value always changes. Therefore,

organizations remain uncertain about their investments. This price fluctuation occurs since a

bitcoin's value depends on its demand (Naware, 2016). Besides, the market for Bitcoin is small,

and any small change can quickly move the market price or down (Douma, 2016). Therefore, the

cost of Bitcoin remains volatile. The progress of bitcoin exchange rates is immature and illiquid

that can vanish and result in panic among organizations (Stegaroiu, 2018). The fluctuation can

also make it valueless and lead to loss of huge investments.

Furthermore, an organization cannot replace a bitcoin when lost or stolen. This is because

they occur in a sequence of hashtags alongside ones and zeroes. Although transactions are

transparent and public, bitcoins are irreplaceable (Sharma & Sharma, 2018). When an

organization's bitcoin is stolen or lost, it has lost everything. Besides, since bitcoins are
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associated with criminal operations and irreplaceability, the transactions conducted in bitcoin are

also irreversible (Dumitrescu, 2017). This is discouraging to organizations that no longer need

the goods purchased. All criminal operations create vital issues concerning the legality and safety

of the bitcoin systems (Sharma & Sharma, 2018). The finality and irreversibility of transactions

are a non-regulated system is complicated.

Similarly, many organizations reject bitcoins due to a lack of acceptance. Despite being

around for the past 12 years, minimal places and organizations accept bitcoins as a channel of

payment. Bitcoin is not connected to any nation, currency, or goods and services produced in a

given economy (Douma, 2016). This implies only organizations that accept bitcoins use them in

transactions. For instance, when the value of Bitcoin changes, organizations earn millions.

However, they have nowhere to spend the money since they are in bitcoins, and only a little

retail stores accept bitcoins. Therefore, if an organization has a lot of bitcoins but is unable to

transact using them, then the current is invaluable. Dell and TigerDirect accepts the use of

Bitcoins

Conclusion

Overall, the emergence of bitcoins has changed online transactions globally. They have

allowed organizations to reach more customers worldwide. Organizations can also transfer large

amounts of cash immediately. It is also cheap to make transactions due to low transaction

charges. However, the volatility bitcoins have forced some organizations to reject it as a standard

form of currency. Investment in Bitcoins is uncertain, and organizations might lose huge

investments. Besides, bitcoins are irreversible and lack worth due to low acceptance. Thus,

organizations should weigh the pros and cons of bitcoins before using them.
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References

Douma, S. (2016). Bitcoin: the pros and cons of regulation. Retrieved from

https://openaccess.leidenuniv.nl/bitstream/handle/1887/42104/Bitcoin%2C%20The

%20Pros%20and%20Cons%20of%20Regulation.pdf?sequence=1

Dumitrescu, G. (2017). Bitcoin – A Brief Analysis of the Advantages and Disadvantages.

Globecom, 5(2): 1-9

Harrison, K. (2018). Should Your Company Accept Bitcoin and Other Cryptocurrency

Payments? Retrieved from https://www.forbes.com/sites/kateharrison/2018/09/10/should-

your-company-accept-bitcoin-and-other-cryptocurrency-payments/#7e6cebaa3373

Naware, A. (2016). Bitcoins, Its Advantages, and Security Threats. International Journal of

Advanced Research in Computer Engineering & Technology, 5(6): 1732-1735

Stegaroiu, C. (2018). The advantages and disadvantages of bitcoin payments in the new

economy. Economy Series Issue1. Retrieved from

https://pdfs.semanticscholar.org/1802/e05b547e1df3f71068ab66c413bc44d3a65d.pdf

Sharma, R. & Sharma, A. (2018). Using cryptocurrency and associated advantages and

disadvantages. International Journal of Economics & Finance Research & Applications,

2(2): 17-22.