Cryptocurrency is the future of payments. Whether it is Bitcoin, Litecoin, Dash, Verge, XRP, XLM, or potentially a coin that has yet to be invented, there is ample reason to believe that at least one of these currencies will supplement or replace traditional fiat currency.
Crypto is the future. It is not the present. But I own a small service business, and I am ready to start accepting cryptocurrency now. I am prepared to accept the risk, and I am more than happy to bill my clients using $BTC, $XLM, $XVG, or any of several others if they are ready to pay me with it.
But I’m faced with a problem.
How to Invoice for Services with Crypto’s Massive Price Volatility
The price volatility of cryptocurrency is, to me, one of its most enjoyable strengths. Right now it is an investment, not necessarily a working currency. I plan to accept cryptocurrency because I hope to profit from cryptocurrency, and the wild swings of the market are what make accepting crypto so interesting.
Yet I cannot help but find myself struggling with how accepting crypto will work in a way that benefits both parties – my company, and the company using my services.
Consider the following scenario:
I finish a $10,000 project. The client is willing to pay me in Verge. At the current price point as of this writing (I’m going to use this phrase a lot so get used to it), that is 54,420 XVG.
What is the next step? Options include:
- Request 54,420 XVG
I could ask for XVG at its current price point. But as of this writing, Verge is on a short upward swing. By the time he pays, Verge may have already lost $.01 per coin. That makes that 54,420 XVG worth $9,455. In that short period of time, I would have already lost $500. It would have made more sense to take the $10,000, move it to Binance, and buy Verge myself.
- Request the Lowest Price of the Day
Instead of asking for the current asking amount, I could ask for Verge based on its lowest value of the day. Based on the lowest price point, it would take 60,240 XVG. But then the client may be unwilling to pay this amount as well, because in essence he/she would be sending me $1069 more than they would have if they had just chosen to send me $10,000 in cash. It would have been more financially advantageous for them to cash out instead.
- Average Daily Price, etc.
I’m not going to continue to get into the math here, but choose any payment amount – whether it is the average price of the day, average price of the week, or even the price as of THIS writing (it has now dropped in value slightly, and would be 56,753 XVG) – all of these would cause problems for either myself or the client. XVG right now is arguably the most stable currency available, and it still swings enough to cause $1000+ in differences between what I billed for and what I received.
The Next Stage Isn’t More Currency – It’s a Plan for Payments
Every day, more and more coins are released to the public. Coins are where the money is. But the focus needs to be not on coins, but on methodology to make sure that paying with crypto makes sense for both the user and the recipient. Whether it is some type of escrow method, or some type of crypto-insurance, or a new way of processing this type of technology, something will need to change.
The coin or company that can figure out how to make simple, day to day cryptocurrency payments between customer and business easier is the coin that is going to change the world. I’m ready to start accepting cryptocurrency. All I need now is help determining how to do it.