The subject at hand is to reflect the meeting point of Cryptocurrency and E-commerce. One of the interesting use cases of Blockchain (the basis on which cryptocurrency was formed) is in E-commerce. What we’d do here is simply appraise both Cryptocurrency and E-commerce separately and then portray how they can be intertwined in the modern world today.
In a simple definition, a commercial transaction that is conducted electronically on the Internet is E-commerce. Electronic commerce is the specific transaction of goods and services not necessary for online businesses but any kind of business. An instance: If a person walks into a store and picks up an item for the intended purchase; at the point of payment with possible options like cash, POS, online Bank Transfer, the use of bank transfer as the means of payments depicts E-commerce has occurred.
A cryptocurrency is a form of digital money, simply put. Usually referred to as Digital assets, cryptocurrencies have become more common over the years. The most popular, Bitcoin is not physical money just like any other cryptocurrency but has the value of purchasing power. Ethereum, Bitcoin cash, Ripple, are other popular cryptocurrencies but there are over a hundred out there with more still in the making. We see only pictures of coins that represent the existence of this type of asset. Cryptocurrencies are the next big thing after fiat money as some enthusiasts would say and it is even expected that cryptos would replace fiat money anytime now.
The bridge that links these two phenomenons together is this; money is used to carry out commercial transactions or other transactions at large and cryptocurrency has a unit of measure, hence cryptocurrency’s value can be used can be in commercial transactions. As popular as cryptocurrencies have become amongst people who have their ears to the ground, or blockchain experts, or tech enthusiasts, many do not use cryptocurrencies when you consider the world population. However, Cryptocurrencies still thrive across different countries because the number of things one can buy with crypto is growing. Reportedly over 14,000 places around the world currently accept bitcoin so far; cryptos could be gaining up the pace but it is not yet enough to achieve full-time adoption globally. The idea of online credit card payments or the cashless system took a toll on many when it was first introduced; till people saw the ease of operating that way. This new era has brought in the phase of ‘cryptos accepted here’ and it is just as challenging to achieve some ‘getting used to’ by a layman.
How can cryptocurrencies be used in E-commerce?
With little information on E-commerce examples, one can decipher the answer to the above question. Being that, once you can think up relatable instances of engaging in E-commerce you can also see that cryptocurrencies are sufficient for payments of products/services.
e-commerce exists in Subscription: The recurring purchase of a product or service automatically, on a regular basis except canceled by the subscriber.
e-commerce also exists with Physical products: goods that can be seen and requires inventory to be replenished and orders to be physically shipped to customers as sales are made.
e-commerce exists in Crowdfunding as well: The collection of money from consumers in advance of a product being available in order to raise the startup capital necessary to bring it to market.
e-commerce exists through Digital products too: digital goods that can be downloaded like an app after payment, templates, and courses, or media that must be purchased for consumption or licensed for use.
Other existing examples of e-commerce are Retail, Wholesale, Dropshipping, Services. But let’s be a little more explicit on Digital products to drive the point home. Hypothetically: if your favorite musician has a music album to be released into the market for listeners, platforms like Apple music, Spotify or Amazon where albums are released through would require payment accruing to the musician for you to purchase a copy. Already existing payment options are Paypal, Pay stacks, Online cash transfer or debit card transfers among others. Cryptocurrencies like bitcoin can be used as a form of payment for this album. If the album costs $15, that’s about 0.0019 in Bitcoin. A buyer in possession of 100 bitcoins in their online account will easily make a funds transfer of the 0.0019bitcoin for the purchase. Cryptocurrency is as easy to use as any other payment method.
Commercial transactions are a part of everyday life. Bitcoin with other cryptocurrencies is small in supply and unequal in distribution so far so it may not take on as much as fiat money or debit cards in e-commerce. But the possibility of its usefulness in e-commerce is constantly proven.
Credits- Vivian Wagner, Randall Stevens, Jia Wertz.
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