Bitcoin in Today’s Ecommerce Industry- Its Pros and Cons
Oct 14, 2017 Posted / 23081 Views
Now and then we come across newspaper headlines and stories centring on Bitcoin and its impact on the international economy. And, the prime time digital media debates on cryptocurrency add fuel to the fire of scepticism among the small and big business owners, including the commoners. Today, one section of people are to support Bitcoin, forecasting its significant future in the global economy, while many are foretelling cryptocurrencies will be civics books, in the coming one decade or two.
The first cryptocurrency in the world, Bitcoin is also known as a decentralised electronic currency, since the model of this currency works without a single authority. Though the founder of Bitcoin is not known to the public, it was unveiled as an open-source software by a group with the name Satoshi Nakamoto in the year 2009. This cryptocurrency operates as a peer-to-peer system, and all digital transactions happen between the sender and the receiver directly, with no intermediary. However, all these online transactions are authorised by network nodes, and they are recorded in a digital ledger known as Blockchain.
Being one of the leading autonomous currency, the exchange rate of Bitcoin is not determined by any central bank authority, and there is no single administrator governing the supply of this cryptocurrency. The rate, however, solely depends upon the trust of people, acceptance of Bitcoin currency by giant companies as one mode of payment. So, in a nutshell, greater circulation, better value for your Bitcoin.
In most parts of the world, today, it’s quite easy to exchange your Bitcoin hand against Euros, Dollars, Pounds, and other economy dominating currencies. So, like any other hard currency, you can sell off your Bitcoin with utter ease. Bitcoins are typically stored in a safe digital wallet, therefore, you don’t have to carry it along everywhere, just one or taps on your cell phone, and the transaction is done and dusted. Nowadays, with Bitcoins going a long way in reaching every physical and online store, you can buy just about anything to everything with your Bitcoins.
Bitcoin Exchange: You can easily gain Bitcoins from their official site termed as Bitcoin Exchanges. You can buy with your country currency.
Transfers: Today, people have the luxury of receiving and sending Bitcoins using their smartphones, personal computer, or via online platforms. It’s just the same as sending cash in a digital way.
Mining: This network is safeguarded by some individuals known as the miners. Here, these flocks are rewarded points for every new verified transaction. These transactions are verified and listed down on a public transaction ledger known as Blockchain. The miners around the globe compete by investing bucks in hardware to ensure safe and quick transactions.
Compared to other cryptocurrencies and payment gateways, Bitcoin transaction fees are on the lower sides, probably the single biggest benefit of Bitcoin for ecommerce. As a matter of truth, this is the single biggest reason, many worldwide e-commerce giants have started accepting Bitcoins. Small merchants, usually have to pay out a transaction fee of 2 to 4 percent along with many hidden charges, thereby, eating away a major chunk of their profits. Bitcoins, on the other hand, charge almost half fees than debit and credit card payments. Nicholas Tomaino, Coinbase’s development manager recently wrote it's less than 1 percent. He also estimated, switching to Bitcoins as a mode of payment, can save e-commerce merchants for allowing fees to have 3 to 5 percent share of their annual revenue.
Stories of credit and debit card frauds usually pop up in both print and digital media but have you ever come across Bitcoin scams, probably not. Because Bitcoin system is robust enough to safeguard every transaction from any part of the world. Additionally, people can transact with Bitcoin, without the need of presenting critical personal data, like your billing address, name, etc. Bitcoin in ecommerce brought to you a level of identity-theft protection promise, which your credit and debit cards won’t.
Credit cards chargebacks, a scenario, when the buyer disputes the transaction in case of a defective good or any other reason. Since Bitcoin transactions are full and final, there are no chargebacks, and no returns, unlike in the case of credit card dealings. This way, it saves merchants a considerable amount of money every financial year.
Yes, in the last two decades or so, the world has digitalised with every nook and corner of this world connected to each other with wireless communication, and recently over the Internet, but, many people are still unaware or unsure about Bitcoin. This, perhaps the biggest shortcoming of this virtual currency.
Bitcoins are usually criticised for their volatility, the price shoots up and down in quick time; this is one of popular disadvantages of Bitcoin for ecommerce. However, many investors consider this as a pro of cryptocurrencies, opening a mine of opportunities for them make good cash without investing a penny.
Though, in the last couple of years, governments have started taking great interest in Bitcoin, but still a long way to go, making Bitcoin a success.
To sum up, the perks of bitcoin overweigh its shortcomings, therefore, as a piece of advice for merchants across the globe; it’s no-brainer to accept Bitcoins are a primary mode of payment.
Applancer is an open platform for discussion on all things like Blockchain , Cryptocurrency and Ico news updates. As such, the opinions expressed in this article are the author's own and do not necessarily reflect the view of Applancer .
Hottest Blockchain Newsletter
For updates and exclusive offers, enter your e-mail below.