• Skip to primary navigation
  • Skip to main content
  • Skip to primary sidebar
  • Skip to footer
  • Facebook
  • Instagram
  • LinkedIn
  • Twitter
  • YouTube
Big Ideas for Small Business logo

Barbara Weltman

Big Ideas for Small Business, Inc.

Whitepaper download

Subscribe and download our eBook, "150+ Tax Deductions for Small Business A to Z."

This field is hidden when viewing the form
Get the:

  • Home
  • About Us
  • Big Ideas For Your Business
    • Idea Of The Day ®
    • SMB Legal
    • SMB Taxes
    • SMB Financial
    • Small Business
    • Newsletter Archive
  • Services
  • Books
  • Blog
  • Multimedia
    • Videos
    • Radio Shows/Podcasts
  • Be a Guest Blogger

The Good, the Bad, and the Ugly about Getting Paid in Cryptocurrency

May 29, 2018 / By Barbara Weltman

The financial markets are all abuzz about cryptocurrency. But as a small business, should you be accepting payment in this virtual currency? A growing number of companies, including a number of small businesses, accept Bitcoin; a list of them was last updated in March. There are certainly pros and cons to consider before you move ahead in this area.

The Good

Accepting payment in virtual currency, such as Bitcoin or Bitcoin Cash (the most popular cryptocurrencies) can offer you some advantages over traditional payment options:

  • Transaction fee savings. If you accept payment with plastic or electronic payment, such as PayPal, you bear the merchant fees, which can be a significant percentage of each transaction. You don’t have these transaction fees with cryptocurrency, but there are other fees associated with cryptocurrency which can be smaller than merchant fees.
  • There are no chargebacks. Once a transaction is complete, the customer can’t recoup payment through a payment processor (such as MasterCard or Visa).
  • There’s a marketing advantage. Taking payment in this new technology suggests to customers that your business is up-to-date.

The Bad

While there may be some advantages to accepting payment in cryptocurrency, there are some drawbacks.

  • Getting set up. To accept payment in cryptocurrency, you need to set up a digital wallet on a digital currency exchange. In the future, there’s likely to be exchanges accepting multiple types of digital currency.
  • Reporting payments in cryptocurrency can be complex. The IRS has determined that Bitcoin et al. isn’t currency; it’s property. As such, you must report as income the fair market value of the cryptocurrency on the date of payment or receipt, based on a listed exchange. And as yet, you can’t pay your taxes in cryptocurrency.
  • Cryptocurrency options may not comport with customer preferences. Because there are so many types of virtual currency, the one(s) you accept may not necessarily be the one(s) that customers are using. Most companies that have been accepting payments in cryptocurrency have restricted transactions to Bitcoin or Bitcoin Cash; they haven’t expanded to Ethereum, Litecoin, or other virtual currency (one exception is Overstock, which accepts all of them.)

The Ugly

Perhaps you can live with the bad, but can you handle the ugly? You can lose big time by taking payment in cryptocurrency.

  • The value of Bitcoin and other cryptocurrencies can swing dramatically. (Remember when it reached $20,000? It’s now about $8,500, but intraday changes can be hundreds of dollars or more). Once you’re paid, you don’t have to hold onto the Bitcoin; you can sell it but may have additional gain to report. But due to volatility, you could experience a loss from the time you receive payment to when you dispose of your cryptocurrency. This problem can be somewhat eased by using BitPay, Coinbase, or certain other sites to immediately exchange the cryptocurrency payment into cash.
  • There’s no protection for your Bitcoin if your account is hacked. You can lose it all. Tech guru Steve Wozniak, co-founder of Apple, reported in Febuary that he had 7 bitcoins stolen from him.

Watch for changes on the regulatory front that may ameliorate some of the bad and ugly concerns listed above. For example, Wyoming has enacted laws to permit cryptocurrency to be traded in the state, exempt virtual currency from property taxes, allow corporations to use blockchain technology to store company records, and do initial public offerings in virtual currency. But Colorado failed to pass the Cyber Coding Cryptology for State Records law.

Conclusion

Most small businesses likely don’t want to rush into a decision regarding payment in virtual currency, but you’d be wise to start looking into it. You don’t want to be getting around in a horse and buggy once Main Street switched to the automobile.

Tags bitcooin cryptocurrency getting paid small business

Primary Sidebar

Categories

  • General Business (505)
  • Guest Blog (113)
  • Homepage (20)
  • Small Business (1,000)
  • SMB Financial (326)
  • SMB Legal (66)
  • SMB Taxes (326)

Barbara’s Recent Posts

  • Creating a Feng Shui Office Layout for Your Business June 20, 2025
  • Scaling Your Business by Optimizing Social Media Marketing June 19, 2025
  • The Timeless Value of Business Cards in a Digital World June 18, 2025
  • What Does the Latest IRS Data Book Tell Us? June 17, 2025
  • Business Advice from Famous Dads June 12, 2025
  • How Important Is Higher Education for Small Business Owners June 11, 2025
  • Business Planning in a Period of Uncertainty June 10, 2025
  • 9 Smart Financial Decisions for Business Owners in Retirement June 6, 2025
  • Preview of Tax Changes this Year: Actions to Take Now June 5, 2025
  • Becoming Penniless: What Does this Mean for Your Business? June 3, 2025
  • Scale Your Business by Stepping Up IP Protection May 29, 2025
  • Disasters Happen: It’s Important to Be Prepared Now May 27, 2025
Awarded Top 100 Small Business Blog medal (link will open in a new window or tab)
Marquis Who's Who 2023 Badge
Top Small Business Blogs (Link will open in a new window or tab.)
8 Financial blogs small business Owners Need to Read. Invoice home.  (link will open in a new window or tab)
Best Small Business Blog, Expertido.org
Top 50 Small Business Blogs 2018
Best Small Business Blogs
BizHumm Top 100 Business Blog Award to Barbara Weltman
FitsSmallBusiness.com: Award for Best Small Business Blog 2017 (link will open in a new window or tab)
FitsSmallBusiness.com: Award for Best Small Business Blog 2016 (link will open in a new window or tab)

Footer

Big Ideas for Small Business logo

Small business ideas, business tax news and small business consulting from Barbara Weltman to provide business owners with the information they need to succeed. Visit our small business blog, Idea of The Day®, small business books and articles on small business taxes, small business finance and small business legal advice.

Contact Us

[email protected]

(772) 492-9593

gacor maxwin situs slot thailand terpercaya situs slot gacor situs gacor akun pro thailand slot bandar togel terpercaya

Latest Tweets

bigideas4sb Big Ideas for Small Business® @bigideas4sb ·
June 20

Mental Clarity: The Most Underrated Key to Business Growth During Tough Times https://bit.ly/443P627 #smallbusiness #leadership

Reply on Twitter 1936189923108741369 Retweet on Twitter 1936189923108741369 Like on Twitter 1936189923108741369 Twitter 1936189923108741369
bigideas4sb Big Ideas for Small Business® @bigideas4sb ·
June 20

Social Media Content Calendars for Property Managers: Plan Better, Post Smarter https://bit.ly/3HKQtvk

Reply on Twitter 1936153937855336706 Retweet on Twitter 1936153937855336706 1 Like on Twitter 1936153937855336706 1 Twitter 1936153937855336706
bigideas4sb Big Ideas for Small Business® @bigideas4sb ·
June 20

Scaling Your Business by Optimizing Social Media Marketing - https://bit.ly/4k3vK3p #smallbusiness #businessgrowth #socialmedia #marketing

Reply on Twitter 1936113087506977212 Retweet on Twitter 1936113087506977212 Like on Twitter 1936113087506977212 1 Twitter 1936113087506977212
Load More

Copyright © 2008–2025 Big Ideas for Small Business, Inc  |  Designed by Hudson Fusion

  • Privacy Policy
  • Sitemap