How to Invoice Bitcoin Without Losing Money
Whether you are a business or a professional there are plenty of benefits you can enjoy by accepting bitcoin as a payment. You get fast…
Whether you are a business or a professional there are plenty of benefits you can enjoy by accepting bitcoin as a payment. You get fast transaction time, low processing fees, no charge-backs, no middlemen and most importantly you have complete control over your money. It is no surprise that bitcoin is getting more accepted day by day as a form of payment.
To accept BTC via invoice there are currently two broad methods that businesses use:Method 1: Sharing the Bitcoin Address and USD Amount
This is the easiest the most straight forward method to invoice clients and businesses with bitcoin. You can simply share the bitcoin address where you wish to receive your money and the amount in your desired currency via email or other messaging services. It is simple and easy method and does not require creation of invoice copies through a software.
Within this method there are two cases that might apply:
1. Payment is sent immediately
If the the payment is made immediately after you have sent the invoice details. Then it is very easy to verify the transaction and confirm the amount.
2. There is a time-gap between the invoice sent and payment being made
This method carries with it an inherent risk that most people do not realize.
It is very easy for users to get scammed using this method of invoicing. And why exactly? Because bitcoin price is volatile! Let me elaborate a bit more:
When there is a time-lag between invoicing and payment made there is a very high chance that the bitcoin price has changed. In such cases, an unverified sender can easily manipulate the bitcoin amount and send you less. To verify the amount, you have to check the transaction ID for the timestamp using services such as blockchain.A random transaction on blockchain.info….
After which you have to correspond it with the bitcoin price at the time the payment was made. You can use services like Coinmarketcap or Bitcoincharts or any other service that will let you access bitcoin historical charts, to verify this.
So, upon checking the bitcoin price at the time of transaction (25 Oct 2019, 12.33 for the above transaction), it comes out to be $7500/BTC.CoinMarketCap Charts
Now, we can calculate the amount in USD for the bitcoin that were received, which according to the above transaction is 0.17288
$7500 per BTC X 0.17288 BTC = $1296.6
So, the invoice that you sent to your client must be for $1300 (approx.) for this transaction to be legitimate. If not, your sender has scammed you!
As you can see this process is lengthy and requires a certain knowledge of the bitcoin ecosystem.
Method 1 despite being easy requires trust between the two parties making it a risky method of transaction between unverified users or strangers.Method 2: Bitcoin Invoicing Services
This method requires the use of third-party services, such as blockonomics that provide bitcoin invoicing solution. Using this method you enjoy a host of benefits:
- Dynamic Price Updates: Bitcoin invoices take care of the price volatility by updating the price of bitcoin is real time thus updating the invoice with the latest amount you should be receiving.
- Ensures that proper amount is sent: This by far is the most important benefit of using bitcoin invoices. Bitcoin invoices mark themselves as paid only if the correct amount is sent to your bitcoin address, ensuring that you receive the exact money that is owed to you. This saves you the trouble of verifying the transaction manually.
- Anonymous: Bitcoin Invoices are completely anonymous, there is no need to register or send ID documentation to third-party services to avail their services.
- Secure and Private: Bitcoin invoices are secure and no private information is shared while using them.
If you are trust the client/business that is sending the bitcoin then you can simply share BTC address / USD amount. But, if you are looking for an extra layer of security that will ensure proper payments in case of unknown senders then go ahead and you should do some calculation / use bitcoin invoices.
This is a companion discussion topic for the original entry at https://insights.blockonomics.co/ow-to-pay-invoices-in-bitcoin-without-losing-your-money-ea9e8ccf9c04/