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We are about to release a Bitcoin integration for RMS and I wanted to hear peoples thoughts on this? Have you had any requests around this?
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We considered this for a period, but decided against it for a number of reasons; the recent unrest regarding Bitcoins in India and China was the thing that put us over the edge towards our "no" decision. Here are the other factors:
The value of Bitcoins fluctuates erratically. Because we're in New York state, close to the Canadian border, I equate Bitcoins with the exchange rate between Canadian and US Dollars. The US<>CA exchange rate changes daily, and every few days, we have to go into RMS and change the calculated exchange rate for Canadian currency to ensure we're not losing money when accepting Canadian Currency. Fortunately, there is a currency standard where the exchange rate is announced and adjusted once per day, through government regulated agencies.
Bitcoins, on the other hand, are not regulated, and can fluctuate widely in a given day, hour by hour, and even minute by minute depending on the trade value. (Kind of like the stock market.) The need to continually adjust the exchange rate for Bitcoins was, for us, more hassle than it was worth. I would be concerned about the sudden devaluation. (As an example, as I write this, the value of 1 bitcoin is $841.70 USD) So, I set my exchange rate at that at the start of the workday. By the end of the workday, for one reason or another, let's say the bitcoin value was reduced to $541. If I don't keep up with that, and I sell something to a customer, I have the potential to lose $300 in revenue. That alone is what kept us from engaging; without regulation or set value times, it's too difficult to keep up with. (Case in point; while typing this paragraph, the value has already changed to $839.80. http://preev.com/ is a good resource for the current value.)
Lastly, because Bitcoins are not regulated, there is always the fear that government intervention may render them useless before they can be cashed in. (Equivalent to a really big bounced check.)
All in all, there's a great deal of financial risk involved, and for our business, it's not worth the risk.
That's my 2¢!
Thank you for the feedback, I appreciate it. These are great points. I understand that there is some unrest with taking Bitcoins but with all new opportunity comes risk. No risk no reward right? But this can be mitigated by using a service that pays out on a daily basis thus allowing you to exchange you coin for cash daily. If you are not holding onto a bunch of Bitcoin you are not going to be affected if the government were to step in. You are correct in that the exchange fluctuates wildly throughout the course of a day. This is why we wrote the software to reach out at the time of transaction and apply the exchange rate at the exact time of transaction as well as lock it in. You never have to touch the exchange rate in RMS.
That sounds workable, and I like that the risk ends at the end of the day; there would still be the risks associated with the value of the bitcoin between the transaction and the transfer to cash value... There's the potential that value could be lost, (of course, there is also the potential to gain value in that time, so in the grand scheme of things, it's likely to balance out.)
For our business, it's a risk we're not willing to take at this point. For some businesses, the gain in customers seeking to spend their bitcoins may be more than worth the risk of devaluation.
This is a good point. We wrote this integration to work with a specific processor who absorbs the risk. When a transaction is processed you will be paid out the dollar amount that was applicable at the exact time of transaction. So if Joe customer comes in and buys a coke for a dollar a dollar and this is .001 BTC at the time of transaction and then at the eod the same coke is worth .0001 BTC you are still paid out a dollar. There is absolutely no risk when it comes to the exchange rate.
So, your module automatically adjusts based on the exchange rate, and it eliminates the risk of devaluation before the bitcoin is converted to cash value? Okay, that's pretty awesome. You've basically eliminated the two reasons we were avoiding bitcoins... If the expense of the integration was reasonable, and the processor fees were comparable with a credit card processor, than I'd be willing to give it a go!
The processing fees are actually less, one of the biggest benefits.
Shoot me an email or give me a call and we can talk more about it.
awilcox@newestech.com
503 235 4656
with the recent hacks of bitcoins, I would advise to stay away from them, as Apple Inc is doing.
Ed,
I would agree with this advice if it was directed at people thinking of Bitcoin as an investment opportunity. I would strongly disagree if you are a retailer. There is no risk in accepting as Bitcoin payment through our system as you are paid out the exact cash amount of the transaction in USD not BC. People have Bitcoin, people want to spend Bitcoin, you might as well let them spend it with you right?
Bticoins is a fad
seekingalpha.com/.../2007131-the-government-wont-kill-bitcoin-apple-or-some-other-corporation-will
I think you are missing the point. There is no risk in accepting Bitcoin. People have and want to spend their Bitcoin. Retailers should accept Bitcoin if they want to make money...Pretty simple, get it? Regardless of if the Bitcoin collapses or not why not make some additional sales b/c you accept it in the time that it is viable?
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