There are several reasons taken together that lead me to conclude that I should not promote bitcoin to businesses. Here in New Hampshire there are several businesses that accept bitcoin and I have taken advantage of this fact. The environment that I want to live in would have even more businesses accepting bitcoin. However, I won’t promote that businesses accept bitcoin.
Businesses exist for one reason
Businesses exist for only one reason, that is to make money. As with any voluntary exchange, all parties should benefit. If you sincerely believe that any extra business that accepting bitcoin would bring in would cover the costs associated with accepting bitcoin, have at it. Large businesses with many employees might incur a significant training cost however. Efficiency is difficult to obtain for any business, and introducing outside factors could disturb that efficiency. It’s hardly ever clear that an extra $100 or even $1000 of sells would make the transition worth it. This is even more dramatic for low margin businesses such as food service.
Bitcoin cannot support more use
Even with only small 300 byte transaction, bitcoin can only support 175 million transactions in a year. This means that about half the U.S. population (or 2.5% of the world population) can use bitcoin at most once a year. This is a hard cap, there is no more capacity without changes to bitcoin that are slow to be rolled out, in my view years late. As bitcoin gets more use, this problem only gets more severe. Without being a business that appeals to bitcoin users, this is a small number of possible transactions to promote a business try to capture.
Network congestion makes fraud more likely
During peak use bitcoin blocks can be full. This results in transactions with lower fees not being confirmed. In the worst case a transaction will never be confirmed. This creates an environment where double spends are possible. What’s worse is that accidental double spends are possible. What used to be the result of a malicious individual can now happen without trying. “No double spends” used to be a selling point of bitcoin. Now it can no longer be assumed. It does not seem that a solution to this problem will be forthcoming.
Technical knowledge is daunting and helpful
When promoting bitcoin to a business owner, there should be a desire to provide full disclosure. Two years ago, it could be said that there are reasons payments could not go through, but that’s unlikely. Today this statement cannot be honestly made. Given enough time, it’s certain that a business will run into business will run into problems. Having the technical knowledge can help. Rebroadcasting a transaction paying the business could help mitigate this problem. However, this puts the onus on the business owner. Because the bitcoin network is unstable, explaining the technical facts becomes more important and more difficult.
Bitcoin may be right for some businesses
Of course this argument does not apply to every business. Businesses based around bitcoin probably will still need to accept bitcoin. Also online businesses may want to accept bitcoin because of the ease of payment it offers customers. Online businesses without instant shipping can avoid pitfalls of the bitcoin network congestion quite easily. The internet remains the natural habitat for bitcoin. I also feel that a business owner that likes bitcoin for ideological reasons may want a customers bitcoin expertise. Most hurtles are removed if a business owner finds value in bitcoin independent from their business.
Consider the merchant expierence
If a merchant integrates bitcoin now, and has a bad experience. It is less likely that the merchant will be open to adopting bitcoin or bitcoin-like payments in the future. Perhaps it would be best for sustainable scalable solutions to be introduced before promoting integration into the crypto economy. Bitcoin has given us a glimpse of what is possible, and it’s likely that more streamline technology will be available in the future.