Cryptocurrency and E-Commerce: A Future Together?
Cryptocurrency has started gaining traction and popularity over the past few years, and people have begun seeing it as an alternative form of currency, much like a digital comparison of gold to cash.
In this technological era, digital assets and peer-to-peer transactions will become normal as the Internet and digital advancements evolve. The new wave of transactional cryptocurrencies has shifted the way e-commerce businesses operate. Many people believe that cryptocurrency will be the future payment mechanism for online purchases.
This article will explore the impact that cryptocurrency could have on the world of e-commerce in detail and examine the relationship between the cryptocurrency, business, and e-commerce. We will also overview the benefits of accepting cryptocurrency payments for retailers. But before getting into the details, we should have a basic knowledge of these concepts. Let’s dig into it.
What is Cryptocurrency?
Many people are still on the fence about Cryptocurrency. Simply put, Cryptocurrency is digital money that is based on encryption and cryptography. It is decentralized, which means that users can trade it directly with one another without the need for banks, governments, or other intermediaries.
What’s more, the best part?
Due to the advanced encryption, digital currencies are not susceptible to counterfeit or theft like the money in your bank. In fact, unlike bank money, cryptocurrency is not even a tangible currency – every transaction runs through blockchain technology, which transfers data from one user to another securely.
What is E-Commerce?
E-commerce, aka electronic commerce or internet commerce, refers to the purchase and sale of products or services through the Internet and the transmission of money and data to complete these transactions. E-commerce is frequently used to refer to the online sale of physical products, but it may also apply to any sort of commercial transaction that is facilitated by the Internet.
What Impacts will Cryptocurrency Have on E-Commerce?
Cryptocurrency and the world of e-commerce have the potential to collide and complete each other. Their full capability has not been determined yet, but huge advancements are to be made if this relationship peaks. Cryptocurrencies have the potential to disturb the online payment system, online security, as well as the retail companies’ climate journey. The most important element will be user adoption. There are several options for users to use cryptos as a kind of payment for online purchasing. Although Bitcoin has emerged as the most trustworthy coin and people are starting to accept it, a slew of other coins are also competing for a place at the top.
A Match Made in Heaven?
Cryptocurrency has become an intrinsic part of public consciousness as it continues to grab attraction and popularity in this modern world. The pandemic has accelerated the development of the global e-commerce market. With these two constantly evolving and making huge advancements in this technological era, it’s worth considering how they might be able to complement each other.
In theory, Cryptocurrency and e-commerce are a match made in heaven. Why? Blockchain technology enables cryptographically created digital forms of security with swift, inexpensive, and safe transactions. The transfer of our lifestyles to the Internet makes online shopping and payment a perfect fit. The question is whether cryptocurrency can be a viable payment option for e-commerce consumers?
Advantages of Cryptocurrency in E-Commerce
Cryptocurrencies can provide lightning-fast transaction processing speeds on a blockchain network. One objection to Bitcoin as a transactional currency is that each block takes 10 minutes to complete, and transactions might take hours to confirm, depending on network speeds. To solve this problem, blockchain forks resulted in faster-processing currencies such as Bitcoin Cash, Dash, and Litecoin. These cryptocurrencies are trying to gain acceptance as transactional coins for everyday purchases, with transactions completed in seconds.
Transactions with cryptocurrency can be completed at a fraction of the cost of traditional payment processors such as credit cards or PayPal. A credit card company typically charges between 1% and 3% of the transaction amount. Again, due to network speeds, cryptocurrency costs were becoming a little too high for everyday coffee purchases. Other coins, however, came to the rescue and had fees that were a fraction of a dollar. Also, depending on how quickly you want the transaction verified, you can choose a high or low fee with cryptocurrency.
Cryptocurrencies, like credit cards, have the potential to provide users with rewards, making them an appealing payment option for customers. Cryptocurrencies such as Bitcoin or Ethereum, for example, can be used as a frequent flyer program, with points exchanged for perks that have real value and advantages. The reward points or tokens represent a liquid, tradable asset depending on the program’s worth.
Some Other Reasons for E-Commerce to Accept Crypto
- Crypto payments are considered push transactions since they are started by the purchaser, which removes the possibility of chargebacks.
- Push transactions also remove the need to maintain customer payment information, reducing the possibility of a data breach.
- Payments can be handled instantly and for a low cost.
- Crypto payments may be changed directly into USD through third-party processors, such as Coinbase, which charges less than 1% to convert bitcoin to fiat.
- Offering cryptocurrency payments can entice cryptocurrency fans to shop on your website and promote your company.
- Accepting cryptocurrency payments could boost a company’s reputation as an industry leader and early adopter of new technology.
Blockchain technology is finding a broad range of applications in the business world. One of the major fits for digital currencies is in the e-commerce space. As more people use digital currencies, cryptocurrency payments can disrupt the business world. Watching how many more well-known brands are added to the list of Bitcoin-accepting e-commerce sites will be fascinating. The major player to watch is Amazon due to their domination in the e-commerce business. They are certainly thinking about amalgamating cryptocurrency and e-commerce into their dynamic business strategy.