When Bitcoin came to life in 2009, few people outside of computer programmers took note. But since its shadowy beginnings, the idea of cryptocurrency has gone mainstream. Despite the collapse of one of the largest bitcoin exchanges, cryptocurrencies have drawn the interest of everyone from criminals taking advantage of its anonymity to large financial institutions looking to cut international transaction costs. Cryptocurrency opened the world’s eyes to the flaws in our current system for exchanging value and keeping track of those exchanges. The blockchain technology behind Bitcoin and other cryptocurrencies is set to forever change the accounting industry. While Bitcoin may be the most recognizable name in cryptocurrency, it is far from the only one. There are dozens of others including Litecoin, Ethereum, NEO, and Monero. Cryptocurrencies rely on the underlying technology of a blockchain. The blockchain is a record, or ledger, of every single transaction ever made. That record is shared between all users of the cryptocurrency and can only be updated by a consensus of a majority of the participants in the system. Information once entered, can never be erased. Why Should You Invest in Cryptocurrency? It’s Fast Because payments are peer-to-peer, cryptocurrency transactions have no need for intermediaries such as banks. When you receive a payment via check and try to deposit it at your bank, the bank will often hold the funds for several days while it confirms the funds are available. International wire transfers may take even longer. Cryptocurrency transactions, on the other hand, may be instantaneous or take just a few minutes to be confirmed. It’s Cheap Although few small businesses use cryptocurrencies regularly today, there are still key reasons why you should invest in cryptocurrency. Namely, a number of billion dollar businesses that accept Bitcoin as a form of payment include Amazon, PayPal, and the Apple Store. No doubt part of the motivation to accept cryptocurrency is lower transaction fees, which are minimal or in some cases free. It’s Secure Cryptocurrency also carries a degree of anonymity. The use of credit cards requires sharing your name, address, card number, expiration date, and CSV Read More »
The post Everything You Need to Know About Cryptocurrency Accounting appeared first on Accounting Principals Blog.