Cryptocurrencies in eCommerce
Cryptocurrencies have become a global Phenomenon, however not a lot of people understand them. To the normal person, cryptocurrencies are just another currency with a value. Which, so some extent it is, however, cryptocurrencies allow for a lot of different interactions between people and most importantly, Businesses.
What is a Cryptocurrency?
Cryptocurrency is a medium of exchange, created and stored electronically in the blockchain, using different types of validation and encryption techniques to control the creation of these monetary units and to verify the transfer of funds. One of the best examples of a Cryptocurrency is Bitcoins.
How can it be implemented into businesses?
Services like bitpay allow you to accept bitcoin payments for your business. This also allows you to see how many bitcoins you have available at that current time and to buy Bitcoins directly from their app making the accessibility of bitcoins extremely easy. The implementation of Bitcoins into business life makes Business-to-business transactions even faster and more secure as it can be used globally and can easily be used to purchase goods or services.
Also, it is becoming more popular as BitPay services only take a flat 1% settlement charge on transactions whereas credit cards can take up to 3% in processing fees on any transactions that you make with them. Since Cryptocurrencies are still up and coming, if you do start to accept cryptocurrency payments like bitcoin, you need to advertise it. Usually, websites use images like the one below to illustrate to its customers that it takes cryptocurrencies.
The main reason why businesses like to use Cryptocurrencies is that it provides protection against fraud. Bitcoin payments are irreversible and secure, meaning that the cost of fraud is no longer pushed onto the shoulders of the merchants.
Cryptocurrency transactional properties
There are various reasons why people are starting to get more involved in cryptocurrency transactions, including businesses. Below are a couple of points that represent how cryptocurrency increases the security of your transactions:
Irreversible: After confirmation from a Miner, transactions cannot be reversed by anyone. If you send money, it’s sent. So, if you send your funds to the wrong address, a scammer or if a hacker stole them from your computer. There is no backup or protocol to refund them. Also provides protection against fraud as payments can’t be refunded after the transaction is confirmed.
Fast and Global: Transactions are broadcast nearly instantly within the network and are confirmed within 10 minutes. The network that they are broadcasted to is a global network. This means that it doesn’t matter where in the world the recipient of your funds is, it will be sent to them fast regardless of location.
Secure: cryptocurrency funds are locked in a public key cryptography system. Only the owner of the private key can send cryptocurrency. Strong cryptography and due to how long the string of numbers the Hash is that’s used to encrypt the block makes it impossible to break into once its confirmed.
Incognito: Neither transactions or accounts are connected real-world identities. You receive and send Bitcoins on “Addresses”, which are randomly chains of around 30 characters. Which makes it extremely difficult to connect the real-world identity of people to said addresses.
Permissionless: you don’t have to ask anybody to use Cryptocurrency. It’s just a software that anyone can download for free. After its installed, you can send and receive Bitcoins or other cryptocurrencies. No one can stop you.
Cryptocurrencies in the future
Cryptocurrencies are looking hopeful for the future as countries like Japan. As they are hoping to become the cryptocurrency capital of the world. They are using and motivating the use of cryptocurrencies as a way to invigorate their economy.
“Cryptocurrencies are particularly popular among young Japanese investors lured by the prospect of strong profits in an economy that has seen ultra-low interest rates for many years and low returns from traditional assets.” – Express
If the billion-dollar investment plan into Cryptocurrencies works out for Japan, this will also incentive the introduction of Cryptocurrency based system in businesses in other countries like America or the UK that want to trade or invest into Japanese businesses. Giving Cryptocurrencies more of a global presence in business affairs.
Whereas countries like South Korea has recently started to heavily monitor all the cryptocurrency related transactions that are happening from people within the country as they fear the possibilities that they can create.
Cryptocurrencies are important as they are increasing in popularity and they have some sort of monetary value associated with them, which will always attract the attention of businesses. There is a lot more information about Cryptocurrencies and how they work, how they function and how they are being introduced into eCommerce. It is good to keep up to date on Cryptocurrencies from time to time to see how the changes may affect your company.
Learn how we use systems like Cryptocurrencies when working with our clients here.