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Cryptocurrency has emerged as an instant, low-cost payments option, and small businesses that accept it may be different from their competitors. However, cryptocurrency presents risks and a learning curve that can be difficult for small-sized business owners to overcome.

As opposed to fiat currency, that is issued and controlled by central government agencies, cryptocurrency is decentralized and operates without the oversight of a central authority. Blockchain technology is used to record transactions in an irreversible, secure ledger. The absence of central authority allows businesses to cut transaction costs, which could range from 2 to 5 percent as opposed to up to 4% when using credit cards. This also eliminates the need for a bank to verify each transaction, which helps cut down on chargebacks that are fraudulent.

The value of cryptocurrencies is influenced by demand and scarcity. For instance, the number of people mining Bitcoin increases the coin’s value because it reduces the amount that can be spent. Certain coins also utilize burning as a method to increase their value by eliminating some of the supply.

The cryptocurrency market is rife with fraud and scams and it’s important for consumers and businesses to be aware of the dangers. No legitimate business will ask you for money via text message, email or social media in exchange for products or services. Beware of clicking on links in unsolicited emails. These are usually phishing scams to steal your personal information or computer information, like your username and password.