Cryptocurrency saw a rise as a major player in the international economy in 2017, and every aspect of the financial world have been impacted, including e-commerce businesses. Whether you have a Shopify, Squarespace, or WooCommerce online store, more and more people are getting into trading cryptocurrencies. Astonishingly, this was not unexpected.
“Cryptocurrency is a digital asset that uses cryptography to secure its transactions, to control and to verify the transfer of assists.” -Cryptocurrencies: A Brief Thematic Review
Cryptocurrency is a more secure alternate version of the physical currency that we use today. By using cryptography protocols, which are extremely complex code systems that are used for encrypting sensitive data transfer. They are the ultimate secure units of exchange for completing online transactions for e-commerce business.
Cryptocurrencies use Blockchain technology, which is the master ledger of a sort that records all previous transactions and activity in order to validate the ownership of all units at any given time. On the user part, the currency holder has a private key that authenticates their identity and allows them to exchange units. However, the well of cryptocurrency is infinite, but rather a limited number of cryptocurrency can be mined.
The conception of cryptocurrency is a very old one. It was first conceived in the early 1980s by the American cryptographer David Chaum, which evolved into “Digicash” in 1989. Even though they were short-lived, they showed an alternate unit of exchange that is more secure and better.
It wasn’t until the late 2000s to early 2010s that saw many new cryptocurrencies pop-up in the market. And within a decade, currencies like Bitcoin, Ethereum, Litecoin, Dash, Ripple etc. started gaining market share. As of January 16, 2018; the total market cap of cryptocurrencies is worth somewhere around $56 billion dollars.
This virtual currency is used all over the world, for all kinds of exchanges and transactions in e-commerce is one of the biggest. As e-commerce is a virtual shop, integrating the ability to accept cryptocurrency payment is a vital one.
1. Secure transaction
One of the biggest gripes for both customers and merchants has always been about making a safe and secure financial transaction in exchange for their products. With the fear of credit card info being fake or counterfeit always on the back of your mind, people are hesitant in most cases to purchase from online sources. But cryptocurrencies eradicated that problem.
The private keys that are given to holders once they obtain the currency are the only thing that allows the holder to spend it or convert it. A holder without a key renders him/her useless.
Another amazing feature of cryptocurrency that provides enhanced security is the “wallet.” The Wallets have unique information identifying the temporary owner of their units. Wallets reduce the risk the theft of units that are being stored.
Thanks to Blockchain technology, data manipulation is impossible. This technology can spot any change that goes far beyond asymmetric encryption. The source code for cryptocurrencies specifies how many units exist out there, so there is no way around to fake to make it. On top of that, to avoid fraud protection, once a transfer is completed, it can’t be undone.
2. Privacy protection and business recognition
Privacy has always been a concern for the people using internet from its early days. Anonymity was the most lucrative aspect of the aspect back then. But with the march of technology, that anonymity got swept under the eye of the big brother. The main proponents of cryptocurrency have always prized privacy and anonymity and integrity and value of the currencies.
When your online store is ready to accept payment in cryptocurrencies, you welcome and accept customers who wish to avoid the ever-constant prying eyes of the people or organizations. Individuals who try to avoid such things will prefer to buy their goods and daily needs from a place that accepts cryptocurrencies.
This simple act of accepting cryptocurrency payment for your e-commerce business can make you an industry leader or build brand awareness.
As more and more surveillance laws are being passed, people are turning their effort to remain anonymous to the next level. By establishing a cryptocurrency payment system, you will be able to reach these people and connect with them on a deeper level, so that they can and will prefer to shop at your online store.
A feature that is lucrative for customers and merchants alike is the decentralization feature of the cryptocurrencies.
What does it mean?
Unlike the physical currencies, their virtual counterpart is not subservient to any time of government or any specific organization. No one has ownership over it and no single individual can control it.
Because of that, cryptocurrencies offer a reliable means for exchanging units that are outside the direct control of any national banks. It provides freedom to conduct business without having to worry about different regulation that is fine in one country or can be considered as a huge barrier. Decentralization is particularly attractive to individuals who worry about quantitative easing and other loose monetary policies.
For e-commerce business owners, the fear of assets and bank accounts being frozen due to political unrest is a clear and present danger in some countries. However, that is not possible with cryptocurrencies and its decentralized nature. The currency is stored in different locations around the world that can be retrieved at their time of need.
4. Faster, cheaper, and frictionless
Cryptocurrency is becoming something that PayPal was hoping it would become. They enable new endless possibilities that just aren’t possible with the current monetary systems Cryptocurrency transaction is blazingly fast.
Payments are processed immediately as soon as the request is sent through. Still not fast enough to catch Visa, but come up right on their heels with the capability of 1,500 transactions per second.
Cryptocurrencies are also much cheaper in comparison. The security feature of cryptocurrency eliminates any need for a third-party processor to authenticate and verify. This, in turn, reduces the mandatory transaction fees. Although, there are some good third-party apps that help people who need a little guidance or need some tool to take care of this part. But even then, the fees are usually 1 percent.
There are plugins for all major CMS platforms that can be integrated into online shops. Every exchange of unit is recorded to the Blockchain and backed by legally binding smart contracts. This is done to ensure the integrity of every transaction, build the reputation of the user, and secure assets and values.
5. Succeed in the business world
In the past, cryptocurrencies have been more of a part of the deep web, where most of the World Wide Web exists, and online transaction is conducted. The security of the Cryptocurrencies made them the conduit to conduct business there. And with the recent rise of cryptocurrencies like Litecoin and Bitcoin, cryptocurrency has swept over every business and people, and everyone is clamoring to get their hands on cryptocurrencies.
Every company, every investor, and countries are looking to get in the trade of cryptocurrencies. In March 2010, the price of Bitcoin was less than $0.01, and the first transaction was used to buy two pizzas that cost 10,000 Bitcoin.
Even on a Bitcoin forum, a user by the name of “SmokeTooMuch” tried to auction of 10,000 Bitcoin with starting bid of $50,000, which no one bid I must add. If someone would’ve bought them, they would be worth today a little more than $108.5 million.
That is why by accepting Bitcoins Papa John’s did one of the brilliant moves. As an e-commerce business owner, it is time to go with the flow and adapt to the changes that time and trend has brought on. Those businesses who can change their organization to adapt to changes will not only survive but also thrive.
According to expert opinions, cryptocurrencies are the future of our world. They will represent our economy much sooner than letter. Therefore, more and more e-commerce business owners are incorporating virtual currency into their business.
In recent time, cryptocurrency has blown up more than it was expected to and it will continue to do so. And if you decide to become one of that merchant who starts accepting cryptocurrency payments in your online store, you might make a huge profit. However, there is no guarantee.
But the upside is, the decentralized system has shown only a part of the benefits it has for e-commerce businesses. That is why it is our belief the earlier you get into it, the better it is for you. And that is why accepting cryptocurrency payment is so important when you are thinking of starting an e-commerce business.
*Maruf Iftekhar Khan is an up-and-coming content writer currently working for Orbit Informatics, one of the leading web development firms in Bangladesh. *