Bitcoin and Online Accounting: More Than Possible

Granted, Bitcoin still has a lot to grow in order to be treated as equally as the U.S. dollar, the British pound, the euro and so on, but if you want to jump on the bandwagon and start accepting and paying in Bitcoin, your options are better than you think.

What is Bitcoin?

Bitcoin is what is known as cryptocurrency, a virtual currency that exists only in cyberspace. The concept behind Bitcoin, peer-to-peer, is the very same that blockchain is based on: transactions don’t go through the normal payment systems, but instead they run on a network of computers located all around the world. This ensures the decentralized nature of Bitcoin, meaning that they are absolutely not controlled by any government or financial institutions.

Although the idea of a currency that is completely open source and is therefore available to anyone fed up with the time-consuming process of exchanging currencies definitely sounds like something straight out of a utopian sci-fi novel, Bitcoin is extremely vulnerable to fluctuationsdue to being decentralized. This means that Bitcoin’s value can be anything between a few dollars to up to $1,000, so unless you exchange your Bitcoin immediately after the transaction is completed to a regular currency, you might end up losing big.

Why use Bitcoin?

Not to mention that due to the ‘trend factor’ fueled by the very same younger generation dealing with Bitcoin, transactions made with this cryptocash will sooner or later become inevitable. And as an extra benefit to all this, Bitcoin is so new and so trendy that your company can earn some easy PR points after easily finding itself in the middle of media attention; and honestly, who doesn’t want to be the center of attention to potential customers this way?

Bitcoin in online accounting

Trendiness is one thing, but using Bitcoin in practice is a bit more complicated. Thankfully online accounting solutions are more or less prepared for dealing with Bitcoin-based transactions, albeit not in the way you might first think. And the key problem here is currency exchange.

The issue is those fluctuating Bitcoin values, meaning that you’ll need to be careful with exchange rates if you don’t want to massively lose out on cash value. Luckily it is possible to create accounts with BitPay or Coinbase – which are Bitcoin payment processing services – that can be connected to your bank account so that the moment you receive a payment in Bitcoin it is (automatically) converted to the currency of your choice and sent directly into your bank account. This way when imported into the world of online accounting Bitcoin transactions will appear on your account as standard ones, meaning there is nothing more to worry about.