Cointime

Download App
iOS & Android

The Current Role of Cryptocurrency in E-Commerce

Cryptocurrencies have been around for well over a decade and have achieved mainstream acceptance over the past few years, with more and more businesses and individuals looking to get in on the action. 

One area in which crypto is making a particularly significant impact is the field of e-commerce, with 90% of crypto users spending their virtual currency on goods and services online.

This post will take a closer look at the current role of crypto in e-commerce and explore how it is changing the way we buy and sell goods and services online. Let’s get right into it!

Rise of Cryptocurrency in E-Commerce

The use of cryptocurrency in e-commerce has been on the rise in recent years due to several factors, including the increasing popularity of digital currencies, the growing number of merchants accepting them, and the rising number of consumers who own them. This trend is also seen in e-commerce outsourcing, where many companies accept cryptocurrency as payment for their services.

One of the most significant advantages of using cryptocurrency in e-commerce is that it allows for faster and cheaper transactions. Traditional payment methods, such as credit cards and bank transfers, can take days to process and come with high fees. In contrast, cryptocurrency transactions are processed in minutes and have much lower transaction costs.

Another advantage of using cryptocurrency in e-commerce is that it provides a high level of security. Cryptocurrency transactions are secured by advanced encryption techniques, making them much more difficult to hack or steal.

Additionally, the decentralized nature of cryptocurrencies means that they are not controlled by any government or financial institution, which reduces the risk of fraud or censorship. This is particularly important in e-commerce because online stores must deal with sensitive payment information.

Impact of Crypto on E-Commerce

The ever-expanding use of cryptocurrency in e-commerce is having a significant impact on the way we buy and sell goods and services online. One of the most notable changes is the increasing number of merchants accepting digital currencies as a form of payment.

A survey conducted by BitPay and PYMNTS found that as many as 85% of “big retailers” accepted crypto payments in 2022.

The growing demand for cryptocurrency among consumers is driving this trend. As more people own and use digital currencies, more merchants are starting to accept them as a way to tap into this market.

This, in turn, is making it easier for consumers to use their digital currencies to make purchases, which is helping to further increase the adoption of the technology.

Another impact of cryptocurrency on e-commerce is the way in which it is changing how we think about money. Cryptocurrency is decentralized, which means it is not controlled by any financial institution or government. This is leading to a shift in the way we think about money as more and more people begin to see the benefits of crypto as a truly global and borderless currency.

Challenges Facing Cryptocurrency in E-Commerce

Although cryptocurrencies could introduce many potential advantages into the e-commerce space, there are still a few challenges to overcome. Chief among these is the need for more regulation. Cryptocurrency is a relatively new technology, and governments and financial institutions are still trying to figure out how to regulate it.

Another challenge is the lack of understanding among consumers. Many people have yet to learn about cryptocurrency and how it works, which means it is still difficult for them to use it to make purchases. 

Finally, because the value of cryptocurrency is not tied to any specific resource or controlled by any financial institution, it can fluctuate wildly. Take the most famous crypto of all, Bitcoin, as an example.

The price of Bitcoin reached its all-time high in November 2021, exceeding $65,000. However, BTC’s value took a nosedive shortly after that, dropping to just above $16,000 only a year later, in November 2022.

All cryptocurrencies, except those tied to the value of a specific fiat currency (stablecoins), display this huge volatility of value, making them a risky transaction method.

Closing Thoughts

Cryptocurrencies have had a significant impact on the field of e-commerce in recent years, making it increasingly more straightforward and cheaper for consumers to make purchases. On top of that, cryptos have largely changed the way people think about money.

However, there are also several challenges that must be overcome before cryptocurrency can reach its full potential in e-commerce, particularly challenges related to volatility and lack of understanding, both on the side of the consumers and the side of the regulators and financial institutions.

As more people learn about cryptocurrency and how it works, we can expect to see more merchants accepting it as a form of payment, and this will help to increase the adoption of digital currencies further.

Comments

All Comments

Recommended for you

  • AI infrastructure platform Mahojin completes $5 million financing

    AI infrastructure platform Mahojin has completed a $5 million financing round, led by a16z CSX and Maelstrom. Mahojin aims to create a "GitHub" for AI model creators and dataset developers, with the platform enabling intellectual property tracking and rewarding the original contributors of models and datasets.

  • A senior Brazilian official: Bitcoin reserves are "crucial" to Brazil's prosperity

    according to Decrypt, Pedro Giocondo Guerra, senior advisor to the Vice President of Brazil, stated in a recent speech on behalf of the government: "The strategic reserve of Bitcoin is crucial for the prosperity of the country. Discussions about establishing a BTC reserve may be a key factor in deciding the prosperity of Brazil, in line with the interests of the country and the public." Brazilian congressman Eros Biondini (PL-MG) previously proposed legislation to establish a "strategic sovereign Bitcoin reserve" (RESBit). Holding 5% of foreign exchange reserves (international reserves) in Bitcoin, the Central Bank of Brazil will use advanced monitoring systems, blockchain technology, and artificial intelligence to monitor transactions and be responsible for custody.

  • Bitpanda receives broker-dealer license from Dubai Virtual Assets Authority

    Bitpanda, headquartered in Vienna, has obtained a broker-dealer license from the Dubai Virtual Asset Regulatory Authority (VARA).

  • US artificial intelligence startup Yutori raises $15 million

    Yutori, a startup based in San Francisco, has raised $15 million for the development of an artificial intelligence personal assistant.

  • Meme incubation platform Coresky completes $15 million Series A financing

    Meme incubation platform Coresky announced the completion of a $15 million Series A financing round, led by Tido Capital, with WAGMi Ventures, Copilot Venture Studio, Web3 Vision Fund, and Parallel Ventures participating. The valuation information has not been disclosed, and the company's total financing to date has reached $21 million.

  • Vest Labs Completes $5 Million Seed Round of Financing, with Amber Group, QCP Capital and Other Investors

    Vest Labs, a financial infrastructure company based on real-time risk pricing, has announced the completion of a $5 million seed round financing, with participation from Jane Street, Amber Group, Selini Capital, QCP Capital, and Big Brain Holdings. The new funds will be used to support its construction of a real-time, verifiable risk pricing model based on zero-knowledge proofs to enhance financial market transparency and efficiency, and will also launch a perpetual futures trading platform supporting Arbitrum, Solana, Base, and other L2 solutions.

  • Digital asset high-frequency trading company ABEX completes new round of financing of US$6 million

    ABEX, a digital asset high-frequency trading company based in London, United Kingdom, announced the completion of a $6 million financing round, led by MMC Ventures. The new funds are intended to be used for the launch of derivative trading and algorithmic execution solutions to improve the transaction execution efficiency of centralized and decentralized financial venues. It is reported that the company is registered with the Financial Conduct Authority (FCA) in the United Kingdom, allowing it to engage in cryptocurrency trading activities.

  • The market value of BSC ecosystem meme coin BUBB hit a record high of US$35 million, with a 24-hour increase of 516%.

    On March 21st, according to GMGN market information, the BSC ecosystem meme token BUBB reached a market value of 35 million USD in a short time, hitting a historic high, and is currently at 31.3 million USD, with a 24-hour increase of 516% and a 24-hour trading volume of 41.7 million USD.

  • ZachXBT: Suspected insiders made $3.8 million in profits on RTR

    On August 10th, Chain Detective ZachXBT posted on social media that 4 addresses made a profit of $3.8 million in the RTR sell-off, with the 9G1ELG and GHoW2 addresses belonging to the same person and receiving 500 SOL in new funds within minutes after the TGE. Previously, it was reported that Restore The Republic (RTR) had its TGE on the evening of August 8th, with rumors circulating in the community that it was related to a new project by the Trump family. The RTR token reached a high of $0.156 on August 9th at midnight. Afterwards, Eric Trump, the current Executive Vice President of the Trump Organization and son of Donald Trump, warned on social media to "be careful of false tokens" and that the only official Trump project has yet to be announced and will be announced on Twitter first. After the statement was released, RTR quickly dropped by about 95%, with a trading volume of $164 million within just 15 hours of its creation.

  • The U.S. Internal Revenue Service has released a new draft of the crypto tax form, which no longer requires filling in wallet addresses and transaction IDs

    The US Internal Revenue Service (IRS) released an updated draft version of tax form 1099-DA for cryptocurrency brokers and investors to report certain transaction income. The public has 30 days to provide feedback to the IRS on this version. Starting in 2026, cryptocurrency investors who use brokers (currently mainly Coinbase and Kraken, among others) will receive 1099-DAs from these brokers to report certain cryptocurrency sales and trades as taxable events to the IRS. IRS officials say this form will "bring more convenience and clarity" to users who pay US cryptocurrency taxes.