Is Bitcoin safe? Fans of the virtual currency praise its convenience, transparency and democracy; its detractors point to its volatility and popularity with the internet's shadier inhabitants.
Global regulators straddle the two camps. In China, for example, the online retail giant Alibaba this week said it would prohibit the use of Bitcoin on its websites, in line with new rules from the country's central bank. Meanwhile, in the US, watchdogs are more relaxed: the games company Zynga has just announced it will trial Bitcoin payment, while eBay has promised to consider doing so.
The debate matters to Britain's small businesses because Bitcoin's advocates hope they will become early adopters of the virtual currency – particularly those trading internationally. A lack of regulation means lower costs: processing fees on Bitcoin exchanges, which allow people to turn traditional currency into virtual tender, are typically below 1 per cent. Nor do small businesses dealing in Bitcoins have to pay the commission charges levied on most other types of international money transfer, which can be so high they undermine the viability of exporting.
In addition, the increasing number of smartphone apps that make it easier for people to buy and spend Bitcoins is likely to boost the currency's take-up among small businesses' customers. Offering your customers the opportunity to pay in the way they want to makes good business sense.
The launch of UK-based Bitcoin exchanges will also help the credibility of the virtual currency with small businesses based in this country. The first such exchange, Coinfloor, opened its doors in November, and is already targeting small-business customers.
Next week will see the launch of Netagio, marketing itself as Europe's first cold-storage vault for Bitcoin holders – such facilities allow people with Bitcoins to keep them in secure, offline accounts, out of the reach of cyber-thieves.
Against the arguments for embracing Bitcoin are the risks. There is no getting away from the currency's volatility: the value of a single Bitcoin hit $1,000 (£607) in November, before almost halving in December. Now it's back up to November's levels once more. This volatility may ease over time, but for now small businesses trading using Bitcoins risk the possibility of big losses if and when they convert the virtual currency back into traditional money.
Then there's the issue of security. Online Bitcoin wallets are vulnerable to thieves, hackers and propagators of malware. The lack of regulation leaves users with no recourse to protection or compensation if something does go wrong.
Still, there are traditional financial services professionals who think Bitcoin has a big future. A report from Bank of America analysts last month established the virtual currency as a credible concept for Wall Street. The bank's currency strategist David Woo concluded: "We believe Bitcoin can become a major means of payment for e-commerce and may emerge as a serious competitor to traditional money transfer providers."
If Mr Woo is right, Bitcoin is something many small businesses should start to think about.
For now, the virtual currency is more popular with speculators than people who want to use it for payments. But that may change – Bitcoin has the potential, at least, to be one of those disruptive technologies that people come to wonder how they ever lived without.
Helping hand for web traders
Online giants such as Amazon and eBay may be mega corporations, but many of the companies selling products through these sites are anything but.
Small, independent traders did more than £10bn worth of business online in the UK last year, and their numbers are growing all the time.
But how do you get started as an eBay or Amazon trader?
You'll need money for stock, and other costs, but these are not ventures likely to attract support from the banks. Enter Iwoca, a small British business launched in 2012 to make short-term loans of £500-£50,000 to precisely this constituency (the name is a contraction of instant working capital).
Iwoca has raised £5m from the venture-capital investors Global Founders and Redline Capita to fund a major expansion of the business and a move into international markets.
Iwoca's chief executive, Christoph Rieche, a former Goldman Sachs investment banker, says the target market in the UK alone is 4.6 million small traders.
Call to assess cost of red tape
Small businesses support the Government's crackdown on red tape but regulation from Westminster is only part of the burden.
Research suggests that businesses want to see watchdogs such as the Financial Conduct Authority also forced to conduct cost-impact assessments before issuing new rules. Legislation already requires government departments to make such assessments, but other regulators are exempt.
More than four in five businesses think that's wrong, according to a survey by law firm Pinsent Masons. It said 82 per cent of businesses believe that cost assessments are vital because this has not been properly quantified.
"We are heaping new regulations on areas such as financial services without really considering the long-term impact of that regulation or the practical benefit," says Barry Vitou, corporate crime partner at Pinsent Masons.
"By introducing an obligatory cost assessment for all new regulation, public bodies will see clearly the cost-to-regulation ratio and may pause before introducing new rules."
Small business person of the week
Nick Grey, Founder, Gtech
"I didn't do particularly well at school and drifted from job to job when I left, but I ended up taking a job at the vacuum cleaner business Vax in Worcester, down the road from where I lived, and found my niche – I started out as the most junior laboratory assistant and six years later I was running the design department.
"After 12 happy years with Vax, I left to start Gtech in 2001. I had £20,000 of savings plus two properties that I rented out in order to cover my mortgage payments – I figured that if I lived frugally, I'd have enough to cover my living expenses for 18 months and to pay for the development of a prototype cordless vacuum cleaner.
"I knew the technology I was developing would be successful and I was fortunate to get support from distribution partners almost from the start.
"The difficult time was actually the middle few years, when the economic environment got tougher. That persuaded me that it was time to move away from just bringing out new versions of the same products to developing really new technologies. It wasn't easy to make that shift – some of the team, struggled to make the adjustment to this long-term approach – but it was liberating.
"We launched AirRam in 2012, a new type of cordless vacuum, and it's proved hugely successful."Reuse content