Small-scale businesses that accept cryptocurrency can differentiate themselves from their competitors. Small-sized business owners may find it difficult to learn about cryptocurrency and the risks it poses.

As opposed to fiat currency, which is governed and issued by central national governments, cryptocurrencies are decentralized and operate without an authority central to them. Blockchain technology is used to record transactions onto an immutable and secure ledger. The absence of a central authority helps reduce the cost of transactions for businesses, which can be anywhere from 2 to 5 percent versus 4% for credit card transactions. It also eliminates the requirement for a bank to validate each transaction, which reduces the risk on chargebacks that are fraudulent.

The value of cryptocurrencies is determined by demand and scarcity. For instance, the amount of people who mine Bitcoin increases the coin’s value because it reduces the amount available to spend. Some coins employ a technique known as burning to increase the value of their coin by destroying a part of the total supply.

The cryptocurrency market is rife with fraud and scams, and it’s vital for both business and consumers to be aware of the dangers. No legitimate business will ask you for money via email, text message or social media to purchase products or services. Also, do not click on links in unsolicited emails. These are typically phishing attempts designed to steal your computer or personal information, such as username and password.

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