Cryptocurrencies from a Business Perspective

Hello r/cc,

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I wanted to write this post for a long time to give a business perspective on the cryptocurrency ecosystem. I hope this post might help show a critical view of the space, highlighting the positive and negative aspects, and maybe help new projects to address the issues we encountered.

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I run two different B2C businesses, one traditional and one all about crypto. Our exposure to crypto is only as a payment method, and we are not a web3 company. I will attempt to give the pros and cons of each one and see how accepting traditional means of payment compares to cryptocurrencies.

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These days, to process credit card payments or any other means of traditional payment, you are required to use a third-party provider. The biggest one is Stripe. These third-party providers provide ease of integration and, in general, do most of the heavy lifting for you to get a painless experience in implementing their payment solution.

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If you want to accept cryptocurrencies, the whole process is not so easy. You can either implement it yourself, which is a daunting task (especially depending on how many different coins you want to accept), or use a third-party solution, with the existing actors being "not ideal" to put it mildly.

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We used three different providers, which all came with different problems: outrageous fees for coinpayments (e.g., $8 to withdraw bitcoin), the impossibility to accept certain cryptos under a certain amount for some of the providers (e.g., $100 for eth), scam artists, unreliable service, poor offering of coins accepted (binance, coinbase). We also had an issue with Plisio, where they literally blocked withdrawals for a few days with zero explanations.

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The only sensible way to accept cryptocurrency payments is to either do the work yourself with all the limitations that each blockchain has or use a self-hosted solution. There are some mind-blowing limitations to work through with some blockchains, making the whole process extremely convoluted. For example, it's impossible to effectively trace which order translates to which transaction on some blockchains (ETH, I'm looking at you) without relying on smart contracts or unique amounts, which are either crazy expensive or just work until they don't (unique amounts don't work if transactions are sent from a centralized exchange, as they tend not to respect the exact amount sent; you also get issues if the customer sends the wrong amount).

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We ended up using a self-hosted solution (shoutout to bitcartcc), which had to deal with all of those problems and find "hacks" to work around them. If we want to have better adoption going on, there NEEDS to be an easier way to accept payment with cryptocurrencies, without spending half your profit on fees with a third-party provider and hoping your business will not end because this provider will disappear the next day.

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As a business accepting crypto, you have to juggle a number of issues if you want it to be reliable.

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1. You should find a third-party provider that is:

• reputable enough
• has low fees
• accepts enough coins

But you can usually only get one of those criteria, maybe two if you're lucky.

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1. You should keep your company income in a cold wallet. However, due to third-party provider fees, you cannot realistically transfer funds to a cold wallet often enough (see 1).

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1. You could then try to self-host or develop your means of accepting crypto. If you're not tech-savvy, go back to 1.

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1. One swing in the Bitcoin price (let's face it, most of the transactions are done in Bitcoin) can just negate your profit margin, just like that. This means you need to convert to the stablecoin of your choice as often as possible, which might not be possible with a third-party provider. See point 1 again.

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1. Stablecoins are the opposite of stable. You have a choice between USDC, which depegged not long ago, Tether, which is a ticking time bomb, BUSD, which is centralized and has its own issues (see Paxos). And I'm not even going to talk about Luna, etc...

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1. Unfortunately, most businesses do not accept cryptocurrencies, so you need to somehow have an off-ramp to fiat, which is reliable, doesn't block your withdrawals randomly, and doesn't have outrageous fees as well. You're pretty much forced to use a centralized exchange such as Binance, Kraken, and such. With the history of centralized exchanges bankrupting left and right, this is also a cause for concern.

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1. The new ordinals on BTC (thank you, jpeg holders) have ramped up fees like crazy, which makes it quite hard to swap for stablecoin often enough. Seeing your company's financials reflecting the bitcoin price movement is NOT great.

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All in all, here you have most of the reasons why companies do not accept cryptocurrencies and how if it stays that way, adoption will never happen because everyone is too busy being greedy, scammy, or just using crypto as a lottery while shouting "AdOpTiOn WhEn?". As long as businesses will not be able to adopt cryptocurrencies reliably, easily, and with acceptable fees, adoption will NEVER happen, and crypto will stay a casino.

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Everything is not grim; however, there are a lot of good things happening. Some people try to solve some of those problems, but they are outnumbered by the masses who just want to get a shot at getting rich quickly.

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I started this post by talking about traditional payment providers, and I believe that accepting crypto with a self-hosted solution is so much better in so many ways (just go to r/stripe to see how many people get their accounts closed after one dispute because someone tried a stolen credit card on their businesses). The traditional business I run is certainly not stress-free, as you can never know if or when you might be the target of such things, and then it's game over.

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Decentralized money has the means to be able to sleep better at night, knowing that your business is not dependent on some giant corporation that will decide if it gets to live another day or not. You have self-custody of your assets and are the only one responsible for your own bankruptcy. This is great risk mitigation and an amazing promise for business owners.

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However, as of now, it is not worth the trouble, and you have to be incredibly committed to make that work, and in the end, you will have less profit than just accepting fiat due to all the swapping fees necessary for it to work reliably.

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So as a conclusion, I would like to see more work done to ease the onboarding of businesses in the space and less meme coin and jpg holding. For a coin to have adoption, it needs to be exchanged, and for that to happen, you need to have as many places to spend it as possible.

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If you work in web3 and you read this post, I hope that this might give you some ideas, new projects to make this space what it is supposed to be and not just a free-for-all scam-filled environment.

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Thank you for coming to my Ted Talk :)

Edit: ​

Some numbers about the most used cryptos we get: ​

BTC - 43.60%

XMR - 35.20%

LTC - 6.70%

TRX - 5%

ETH - 4.50%

USDT - 3.40%

BNB - 1.70%

BCH - 1.10%

BUSD - 0.6%