Photo credit: Zach Copley
Bitcoin is a virtual currency founded in 2009 by the mythic Satoshi Nakamoto.
It is a cryptocurrency, verifying transactions with the same state-of-the-art encryption used in military and government applications.
Recently featured in Forbes magazine as a sort of a wake-up call to the U.S. Government and Federal Reserve Bank, Bitcoin is now recognized as a legal form of private currency in Germany.
While accepting alternative currencies statistically increases the number of potential clients, Bitcoin in particular provides a number of additional advantages, making them a top choice for ecommerce websites. Alternative currencies bring alternative-minded, often tech-oriented clients who tend to be an impressively loyal group.
So, what can this virtual currency teach us about improving our own website? And is it worth adopting?
1. Involve Your Audience
Bitcoin is an open-source project, which has no official organization. Instead it is led by a vibrant and active Bitcoin community. Members exchange innovative ideas and discuss technical fixes in places like Bitcointalk and Reddit.
If you provide your customers with an outlet and serve them well, you will soon earn their friends, peers, and customers as clients of your own through word of mouth.
Bitcoin takeaway: How do you involve readers at your site? Is there a way you can get them more involved?
2. Leverage the Myth
Having a legend also helps. People are drawn to stories and love to solve a mystery.
The Bitcoin founder Satoshi Nakamoto has spurred a lot of discussion. With a name like Nakamoto, a Japanese auto magnate or female Muy Thai kickboxer might come to mind. But if you do a quick Google search, you’ll discover there are no photos of Satoshi, male or female.
Satoshi Nakamoto is more myth than mythical, but no one can seem to prove it one way or the other. There’s even a website featuring real gambling (SatoshiDice.com), supposedly founded by Nakamoto that sold for $11.5 million dollars (the sale itself is definitely verifiable).
With all this mystery and intrigue, it’s fair to ponder whether or not joining the Bitcoin brigade is financially viable.
Bitcoin takeaway: What’s the story behind your site? Is there a way you can add more mystery or intrigue to get more people talking about you?
3. It’s All about the Exchange
A consideration when accepting alternative currencies is how that currency may be exchanged for standard national currencies such as the U.S. dollar and the Euro. A number of services exist and are being created that exchange Bitcoin for other centralized currencies, with Mt. Gox currently dominating the market with over 80% of the Bitcoin-U.S. dollar exchanges (as of April 2013).
Accepting over 70% of all global currencies, Mt. Gox opens the door to international exchange previously closed to many small businesses. Bitcoin’s fees are considerably lower than institutions processing US dollar transactions, shaving operating costs and enabling local and online businesses to compete with mega-distribution centers and foreign online sales. Mt. Gox has an app so you can do all of this on your smartphone which can be found at m.mtgox.com.
Bitcoin takeaway: Your website doesn’t exist in a vacuum. Who could you partner or co-operate with to create new business opportunities? It’s all about the exchange!
4. Remember the Value
The value of Bitcoins has been designed to always increase, through scarcity and other key economic factors. They are, however, prone to market fluctuations, too.
BitcoinCharts is one service that provides financial and technical data for the Bitcoin network. Exchange rates for the US Dollar, Euro, Chinese Yuan, and many other standard currencies are available with one Bitcoin worth $113 USD at the time of this writing.
“No chargebacks” would be music to any online merchant’s ears, and might seem impossible. But with Bitcoin, there are no chargebacks. Due to the decentralized design and their crypto-security system which includes components such as block chains, miners, and private keys, the system operates without the need for users to make transactions, and then renegotiate.
Because those that use the currency are in essence their own bank, there is no “middle man” to execute chargebacks. According to CoinBase, essentially the PayPal of the Bitcoin world, there is virtually no waiting for Bitcoin transactions, stating that transactions arrive at about the speed of an email.
Bitcoin takeaway: What are the benefits of using your website? How can you add more value to your readers?
5. Be Aware of the Risks
There’s clearly a myriad of benefits in accepting alternative currencies like Bitcoin, but are their risks?
The short answer is always yes, but there are inherent risks in running any form of business accepting any form of payment. These days, it’s excessively easy to add a currency like Bitcoin to your payment options, with very few drawbacks. The Bitcoin community is especially tightknit and loyal, so becoming an early adopter to this currency could engender sincere loyalty within that user base.
Diversification is also almost always a good business tactic, and since Bitcoin transaction and conversion fees are so ridiculously low, it makes loads of sense to give it a go and accept it as payment.
Bitcoin takeaway: What risks do you ask from your readers on your website? How can you reduce that risk by offering more ways for your readers to take action?
Over to You
How great is it that we live in such a virtually focused world these days, there’s a virtual currency to support our cultural evolution? If you’re a business owner that loves the web, in part because it does represent the cutting edge of future technological advances, it’s time to start accepting virtual currencies like Bitcoin.
Do you use Bitcoin in your business? Please let us know your thoughts in the comments!
P.S. If you’re not yet ready for Bitcoins, check out a few PayPal alternatives instead.