Bitcoin Business Model – Which business models are suitable for Bitcoin payments?
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Which Bitcoin business model is suitable?
Paying by Bitcoin offers some advantages over traditional payment methods such as credit card, PayPal or wire transfer. What Bitcoin business models are available? What advantages does Bitcoin offer and for which business models could payment processing with Bitcoin be predestined?
Bitcoin is considered an electronic cash system
(“Bitcoin: A Peer-to-Peer Electronic Cash System”) to
payment on the Internet without a middleman (“Peer-to-Peer”)
to make possible.
The most popular payment method in the shops is cash payment. With cash you can pay quickly and anonymously. Without disclosing personal data, the buyer gives his cash and receives the desired goods from merchants in return.
Bitcoin is digital cash
Bitcoin is the cash for the Internet
When making purchases on the Internet, it is imperative that the customer always discloses his personal data with the previous payment methods. In addition to the credit card details, these are also details such as email address, personal address and perhaps even the date of birth.
But why is this data needed by the merchant?
If something is ordered that is sent to me by post, it is understandable that my personal address is required for mailing.
But when I buy software, a membership or digital goods, the disclosure of personal data or my address is not really mandatory.
All previous payment methods have a return charge risk by the end customer. Bitcoin does not take this risk because a one-time Bitcoin payment is final. A Bitcoin payment cannot be reversed by the payer on its own.
With the current payment methods, for fraud prevention and due to potential chargeback by the end customer, this data must be collected proactively by the merchant.
Since Bitcoin does not pose a chargeback risk to the trader, it is sufficient to collect only the data that is absolutely necessary.
Owners of Bitcoin appreciate when you write the topic of data protection big and collect only the data, which are absolutely necessary.
Digital goods, software, memberships
For which Internet products can i’m not given an address? In the case of physical goods sent by post, this cannot be waived.
But for all digital goods that are delivered or made available via the Internet, the postal address can be dispensed with without any problems.
Providers of software, memberships and digital goods such as video, music or newspaper articles are predestined to accept anonymous Bitcoin payments from its customers.
An email address is sufficient to send the digital goods to the address. Further information about the customer is not mandatory for payment processing.
It is true that the distribution of digital goods is not a new business model per se. But with the help of Bitcoin, it can be converted to a Bitcoin business model. During the ordering process, the collection of personal data can be dispensed with if the user has opted for the payment method Bitcoin.
Examples of applications can be found here:
A merchant must pay a fixed transaction fee and a sales-dependent fee for the use of traditional payment methods. This results in an average transaction fee of 20 to 50 cents and sometimes above.
Business models for the sale of products and services for a few euros or even a few cents are therefore economically unattractive and not feasible.
One example is the sale of individual pieces of music, videos or newspaper articles. Selling these products for prices below €1,- is not profitable with the previous payment methods. That’s why these products are sold in packages. Either as a subscription model or as a prepayment for several individual products.
But why should a customer have a long-running subscription?
if he just wants to read a newspaper article?
Here it is a Bitcoin business model when the individual newspaper articles, videos or music pieces are settled by micropayments with the help of cryotocurrencies.
A merchant has an interest in retaining its customers in the long term. Ideally with a permanent revenue stream through a subscription model and regular debits by direct debit or credit card.
But one does not rule out the other. Try to convince a prospective customer of your product by micropayment via Bitcoin and win it as a new customer. Following the process of converting the customer to a regular customer with an attractive subscription model.
Worldwide potential customers and new target groups
About 1.7 billion people, or about 31 of the world’s population, do not have a bank account. In addition, there are many potential customers who have a bank account but do not receive a credit card or PayPal account.
With the help of Bitcoin, this group of people can now participate in economic life. Either sell goods and services over the Internet and receive Bitcoin in return, or to pay with Bitcoin as a potential customer.
As an extension of the Bitcoin business model, it is a good option to offer your existing product to new target groups. Bitcoin is a worldwide available payment method that anyone can use without restrictions. Perhaps potential customers in China or Korea are interested in your digital product.
New Bitcoin Business Models
Each new technology has its own dynamics and offers new potentials and possibilities. New Bitcoin business models that were not possible with the previous payment methods will be possible.
First Bitcoin business models rely on Bitcoin-only models where payment is made exclusively with cryptocurrencies.
There are particularly promising developments in the pay and remuneration of content, digital goods and services.
There are also promising opportunities when it come to pay for microcent sums for videos, content, games or newspaper articles.
But even for the normal online shop, which wants to sell its goods on the Internet, Bitcoin can already benefit from Bitcoin as a payment method.
If you want to get an overview of which different Bitcoin business models already exist, then have a look at the Bitcoin directory of coinpages.io.
Bitcoin offers interesting potential for new Bitcoin business models. Existing business models will change with the help and because of Bitcoin.
Completely new Bitcoin business models will develop that would never have been possible without Bitcoin. These can be, for example, Bitcoin-Only business models.
There is also huge potential for Bitcoin Lightning. With Lightning, micro payments can be realized on the Internet and theoretically bill everything that had to be provided free of charge in the past.
The advantages of Bitcoin as a payment method at a glance
Image effect: Are you the first record shop to accept payments in Bitcoin? Then advertise with it. And in 5 years you can advertise that you have been accepting Bitcoins for 5 years.
The cost of Bitcoin payments is many times lower (usually less than 1 percent of the total amount, sometimes even free!) compared to other payment methods (e.g. credit card, PayPal).
The amount paid is transferred within a few seconds to minutes and will be credited directly to your wallet.
Bitcoin payments are irreversible. The customer cannot rebook his or her amount as with a credit card or PayPal.
Bitcoin is limitless and can be used anywhere in the world. Perfect for internationally oriented shops that your customers have all over the world.
It doesn’t matter if you want to accept Bitcoin in your business because you:
- Convinced of the positive development of the technology.
- Because you actively want to set an example for the spread of Bitcoin
- Because you want to earn Bitcoin to own Bitcoin
- Because you want to benefit from the positive image and increase in awareness if you also accept Bitcoin (and get in with coinpages and other Bitcoin directories).
- because you want to implement a Bitcoin business model that would not have been possible without Bitcoin
There are a variety of good reasons to accept Bitcoin or consider the issue. Learn how to integrate Bitcoin into an online store as a payment method in the various posts and instructions at Coincharge or accept it in the retail store.
This post is also available in: German