Since the advent of Internet marketing, ecommerce has been on the rise. It’s seen an explosion in recent years, with global e-retail sales amounting to an impressive 2.3 trillion U.S. dollars worldwide. This figure is expected to grow to 4.48 trillion by 2021. Innovative advances in technology have made it possible for people across the globe to order, pay for, and ship goods worldwide.
One of the most recent and most exciting trends to rock the world of ecommerce is Bitcoin and other digital cryptocurrencies. Blockchain payments are quickly becoming a commonplace way for both businesses and private buyers to purchase and sell goods. But just how is the rise of Bitcoin expected to change the ecommerce industry in the long run? Here’s a brief overview of how you can expect to see cryptocurrencies changing how we think about online retail in the long-term future.
What is Bitcoin and How Does it Work?
Bitcoin was first founded in 2009 by an anonymous developer. Up until this point, there were no decentralized currencies because no one had yet figured out how to verify transactions. With Bitcoin, peer-to-peer networks allow transactions to be tracked and recorded using blockchains. This legitimized the currency by ensuring that no one could spend the same coin twice.
Bitcoins and other cryptocurrencies work much like digitized money. You store coins in an online wallet, much like an online bank account, and make transactions purely in a digital space. The main difference is that you can’t withdraw Bitcoins or trade them in at the bank for another currency.
The Benefits of Bitcoin
User demand determines the cost of Bitcoin. This means that as the currency gains popularity, the value of each coin rises. Since its beginnings, Bitcoin has seen incredible increases in value, making some early investors rich. Many people collect or mine Bitcoins with the intention of accumulating wealth. Really, however, the main draw of Bitcoins is their decentralized nature. Exchanges are secure and completely anonymous, protecting the identities of buyers and sellers from cybercriminals.
Bitcoin and eCommerce
The more Bitcoin continues to gain traction, the more it affects the online retail industry. Many companies are beginning to accept Bitcoin as a form of payment to reach out to a wider range of potential customers. There are several ways that we are starting to see cryptocurrencies driving ecommerce trends:
- Faster Transactions: With credit cards and wire transfers, it can take hours or even days for a transaction to go through. Bitcoin is nearly instantaneous, meaning that a seller gets their money faster, and a buyer can immediately see available funds remaining in their wallet.
- Better for Overseas Business: Conducting bank transactions overseas can be a complicated process, full of hoops to jump through and fees to pay. Bitcoin takes out the middleman and makes transfers between countries easier, faster, and cheaper.
- Remove Banks from the Equation: Since Bitcoin is more convenient than most banks, more consumers are opting to pay for goods using decentralized currency. This gives the banks less power as ecommerce continues to take over traditional shopping.
Bitcoin is quickly changing the face of ecommerce. Consumers have more choices when it comes to buying and selling goods, giving banks less power over the marketplace. As a secure currency, Bitcoin offers peace of mind for both buyers and sellers as they conduct business online.