The rapid growth of e-commerce in China has been impressive and it has grown at an average rate of over 30% each year according to the country’s Ministry of Commerce. Despite this, there are some who believe that blockchain technology can breathe new life into e-commerce, with many believing that cryptocurrencies could one day replace traditional online payment methods. This blog takes a look at three reasons why cryptocurrencies will prove to be the future of e-commerce.
One major advantage which cryptocurrency brings to users is lower transaction fees when compared with existing forms of online payment. This is because there are no intermediaries involved, including banks or financial institutions. One example is Tencent Holdings which recently launched its WeChat Pay. According to Worldpay, WeChat Pay charges a fee of between 1.8% and 2%.
When you use a credit card on an e-commerce site there is a risk that your personal information could be compromised if the site is hacked or has its security breached. This can have significant consequences for you as an individual, especially if it leads to identity theft. With cryptocurrencies such as Bitcoin and crypto poocoin, users are provided with more secure protection because users keep their own money in digital wallets rather than sending payments directly from one bank account to another. Furthermore, blockchain technology makes cryptocurrencies extremely difficult to counterfeit or inflate – reducing instances of fraud and therefore increasing trust among both buyers and sellers online.
The cryptocurrency market has grown exponentially over the last few years. Now there are more than 1,000 different cryptocurrencies such as SOL crypto coin currently available on the market which you can invest in or use to buy goods and services online. It is estimated that by 2020 the number of people using cryptocurrencies will rise to around 200 million; this would be roughly 0.5% of the world’s total population. This increase in global adoption is likely to make online shopping with cryptocurrency even more mainstream, especially considering that there are now more than 100 Big Brand outlets which accept Bitcoin .
Energy and Capital’s article on the future of cryptocurrency in ecommerce highlights a study by Morgan Stanley which suggests that Bitcoin transactions can be settled in as little as ten minutes, compared to the average three day settlement period for credit cards. This means that people who invest in cryptocurrencies such as Bitcoin will experience faster payments for their online shopping than existing forms of online payment such as PayPal and credit/debit cards.
The blockchain is a digital ledger which records each and every cryptocurrency transaction taking place online. It is the main technology behind cryptocurrencies such as Bitcoin, allowing users to make payments without going through a financial intermediary. The immutable nature of this decentralised ledger means that all transactions are closely monitored and recorded – meaning that you can be absolutely certain that your money will not go missing between payment and delivery.
These are just some of the main reasons why I believe that cryptocurrencies will be used more frequently in the future for e-commerce. Over time, it is likely that there will be many more innovative uses of blockchain technology which could improve online shopping security or reduce transaction fees even further. What do you think? Do you agree that cryptocurrency has a huge role to play in ecommerce? If not, then what would you see as being the future of ecommerce instead?
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