Would you allow a client to pay with money that you can’t hold? Sure, you probably do every day if you accept credit cards. How about payment that isn’t legal tender?
You might begin to get uncomfortable with the idea of accepting intangible “Monopoly money” as payment. As it turns out, this “Monopoly money” isn’t a joke – virtual currency has been on the rise since the introduction of Bitcoin in 2008.
There are a number of different virtual currencies, but for simplicity we’ll call general digital monies “altcoins.” In the simplest sense, virtual currencies, such as Bitcoin or Ethereum, are digital money that is not issued by a government. They can be exchanged for goods, services, or real currency (legal tender).
There is generally no central authority over the digital currency; rather, the altcoins are managed through public distributed ledgers. Virtual currencies are intangible, with no physical location, although they can be “stored” in virtual wallets.
You may think that none of this applies to you: maybe your clients operate in the retail or service space, not in technology sectors. Even retailers are taking the plunge into the world of virtual currency, however. Overstock.com led the charge, accepting Bitcoins as a form of payment beginning in January 2015.