The Changing Face of eCommerce: How Cryptocurrency is Impacting Online Transactions
There are a number of moments in our economic history that have caused quite a stir: the introduction of the debit card, the ability to send money through emails, and the use of digital coins online. As we moved away from carrying paper bills and coins, did we also move away from having a clear understanding of where our money was going and how we were spending our money? It used to be that you had to walk into the bank to get a printed copy of your bank balance; now, you just have to log onto your mobile phone app to see how much money is in there. And you can pay for your items with your phone now too. Where does it end? When do we get to a point where this is it: this is what money looks like and this is how we will trade money for services? Maybe it never will end. The introduction of the digital coin — Bitcoin, cryptocurrency, flat currency, whatever you want to call it — has created a whole new economy online. Here’s how it’s changing the face of eCommerce and what we can expect from those changes in the coming days.
What is Cryptocurrency?
Cryptocurrency operates independently of banks. It is money that lives online. It is digital currency, that you can purchase and the value of the digital money is held and regulated through encrypted transactions that provide verifiable information to people. To put it in simplest terms, if you’ve ever played a game online and bought “coins” or “tokens” inside the game, and then made purchases in the game with those digital tokens, you were using a form of cryptocurrency. It’s not as complex as investing with digital coins, but you get the idea.
How Is Cryptocurrency Currently Being Used Online?
There was a time when cryptocurrencies were restricted to certain transactions and uses. With the introduction of Bitcoin, suddenly the world’s population had access to a untamed potential for wealth. And when Bitcoin was introduced, people could “buy” it for pennies on the dollar. Since its inception in 2008, Bitcoin has gone on to become worth over $2000USD per coin. Consumers can now buy and use various forms of cryptocurrency to pay for products online, invest in companies, and donate money to causes.
What are the Potential Uses of Cryptocurrency in the Immediate Future?
The problem with cryptocurrency was that there was no way to verify the transactions happening online to ensure stability in the markets. With the introduction of the Blockchain in 2008 as part of the bBitcoinlaunch, the information available became much more stable and reliable for consumers and investors. Now, it is common practice to build ecommerce websites based on Blockchain, and it is even more common for startup companies to seek alternative methods of funding through cryptocurrencies and digital coins, instead of pitching ideas on a stage to get someone to write a cheque.
The immediate impacts of cryptocurrencies are widespread. It’s just a matter of someone picking up with an idea and running with it. There are startup technology companies popping up all over the globe who are turning to digital currencies to fund their business in agriculture, medicine, dentistry, banking, education, and more. What’s more, these companies aren’t just using the digital investments to fund their operations, their products are also digital currency operations. Insurance industries could be turned on their head if a company were to introduce a digital currency insurance model that would allow for sponsorship or funding. Rather than paying for your insurance privately, you could access it through digital means.
As for business operations, people could start to be paid in cryptocurrencies. Like many new startups offer a percentage of their company, some companies might start to use their digital currencies to invest in employees. All the money trades hands in the Blockchain online, and stays there because employees will be able to buy and sell goods online with their digital currency.
What are the Pros and Cons of Cryptocurrency?
A lot of the dangers of engaging in digital coin operations were elevated when the Blockchain was introduced. Ensuring a transparent ledger of traceable transactions has changed the way digital coins are viewed in the world, and how they work. The pros of digital currency are obvious: convenience, affordability, potential to recoup return on investment at high rates, sponsorship, innovation, and opportunity for new areas of business to emerge.
The cons are a little more worrisome: even the most secure transactions can eventually be tampered with or hacked. The digital economy could crash the way the literal economy has all over the world. People could lose money in investments. We might continue to put less emphasis on our money because we will stop seeing it all together in real life. If you’ve ever had a child ask you for $20 to buy some tokens online and ten minutes later they are asking for more money, you know how fast cryptocurrencies can go down the drain when we are mindlessly spending it. Digital goods don’t always have the same intrinsic value as physical goods and with an aging population, it might be hard to get the world to make the shift completely.
How Should You Prepare Your Business for the Impacts of Cryptocurrency Use?
When it comes to going completely digital, that’s probably many years off. But it’s a good idea to start learning about cryptocurrencies and how the presence of it can impact your business and your life in general. Don’t make the mistake of telling yourself that the “tech” world has nothing to do with you. You use tech everyday: at the grocery store to pay for your groceries with your debit card, when you order Christmas gifts online at Amazon, when you send your niece money because she is away at college. These are all “techy” ideas that we have adopted fairly quickly. Be open to how digital coins can help you grow your business, find investment for your business, and make your transactions more transparent for the good of the industry, and you’ll be more than ready to move your business into the next stage of ecommerce.