Should You Bank on Bitcoin?
While Bitcoin has been having somewhat of a renaissance as of late — more mainstream brands are allowing consumers to use the virtual currency as payment for purchases — the news this week wasn't all good.
According to an article posted yesterday on CoinDesk, a news information site that reports on Bitcoin and other digital currencies, the price of Bitcoin on the CoinDesk Bitcoin Price Index declined more than $60 (by the time of publication), falling to a low of $435.60. In addition, a more serious decline was observed at another major Bitcoin exchange. While that collapse was short-lived, The New York Times reported yesterday that Bitcoin’s price has been steadily falling in recent weeks.
Yet, at the same time, retailers continue to sign up to use the digital currency. In July, electronics e-tailer Newegg announced a partnership with BitPay, a Bitcoin payment gateway, to accept Bitcoin payments on its site. Newegg's more than 25 million registered customers can now pay for more than 10.5 million products, including electronics, computers, game consoles and household items, using Bitcoin through BitPay.
Newegg joins retailers such as Home Depot, CVS, Sears, Amazon.com, Overstock.com, TigerDirect, Dell and ASOS in allowing customers to pay using Bitcoin.
So, what's the appeal of Bitcoin payments for retailers? Lower processing fees, for one. Bitcoin payments are currently processed with either no fees or extremely small fees. What’s more, it’s great publicity. Some experts say it makes the brands appear edgy.
However, Bitcoin and virtual currency in general doesn't provide obvious benefits for consumers. In many ways, it's still easier for them to pay with a credit card or a PayPal account. Transacting in Bitcoin is also riskier because consumers aren't protected against virtual currency fraud. Furthermore, there's the value problem (see above).
So, what's your take on Bitcoin? Do you accept Bitcoin payments at your retail establishments? Are you considering it? Why or why not? Let us know by posting a comment below!