Source: Enterprise Times
Author: David Adams
Cryptocurrencies, often interchanged with digital currencies, refers to a decentralized digital payment platform outside of the control of a government or central bank. Users from all over the world can securely and anonymously transact with each other. Multiple exchanges like Swep.io help people legally buy and sell one or more of the approximate 1,600 cryptocurrencies in existence.
Cryptocurrencies are backed by complicated encryption protocols. They make it difficult to counterfeit and steal people’s property. Each and every transaction is recorded in a blockchain. It adds a layer of security that makes it nearly impossible to reverse transactions.
For many people, this sounds like the future of e-commerce. They see it as replacing the current outdated system where credit card innovation has been absent for years.
The Case For Cryptos
The most notable selling point for cryptocurrencies to be used for online payments is the speed of the transaction. Cryptocurrencies can change hands within minutes. Bank transfers can take days to travel across the world.
Online sellers can take advantage of the lower fees per transaction that cryptocurrencies offer. Currently, online business owners that use Shopify, for example, pay a fixed monthly cost for the platform on top of 2.4% to 2.6% per transaction plus another 30 cents per transaction.
Additionally, the list of notable breaches in 2020 includes some of the largest United Kingdom-based companies like Tesco and Boots. These companies are counted on to offer the most secure and safe shopping experience, given their large scale. But if multi-billion pound valued companies can’t guarantee full safety, what chance do smaller players have?
Isn’t it time to make way for cryptocurrencies to have a chance to prove their safety profile?
The Case Against Cryptos
Opponents of cryptocurrencies like to point out the volatility nature of the digital currency. It isn’t uncommon for the price of bitcoin to fluctuate by thousands of pounds in a few short months.
In 2020, Bitcoin, perhaps the most notable cryptocurrency, has seen its value range from £3,840 (Mar 16) to £9,630 (Aug 18). In 2010, the price of bitcoin traded at a fraction of a pound.
Proponents are also quick to point to a large number of cryptocurrencies in existence. While bitcoin is the largest cryptocurrency by market value and general knowledge today among the public, there is no evidence it will hold its status over the years ahead.
Companies would be wasting time and money setting up their business to accept bitcoin over the coming years only to find out no one even uses it anymore.
Lastly, the general public may not even be ready to embrace the future of online shopping, even if they are open to changes. Terms like blockchain and digital currencies are often associated with illegal activity.
In 2013 a Dark Web marketplace called Silk Road was shut down. It sold anything and everything illegal from counterfeit passports, dangerous chemicals, drugs, and much more. Since then, many more Dark Web marketplaces have grabbed the headlines. The US government seized and sold the Bitcoin held by the alleged owner of Silk Road.
Conclusion: Nowhere Close To Widespread
Cryptocurrencies and online sales may seem like an ideal match but we are nowhere close to widespread usage in 2020. Many large and global companies like Starbucks do accept bitcoin in some form, but it isn’t a big part of their business. Perhaps it isn’t even on management’s mind.
Consider the coffee chain’s emphasis on digital and mobile accessibilities in recent months to present consumers with a safer experience amid the COVID-19 pandemic.
Yet bitcoin and cryptocurrency mentions during the company’s third-quarter conference call in late July totalled zero. The term “digital” and “Starbucks Rewards” were each mentioned 25 times while “app” was mentioned another seven times.
Perhaps expectations for widespread use across the multi-trillion-dollar eCommerce universe is unrealistic. There might however be a large niche for cryptocurrency use in segments like video-games and computing.