In the last year or two, Bitcoin has been steadily growing its name in the mainstream business community, and stores like Overstock, Lord & Taylor, Virgin Galactic and NewEgg now all accept the digital currency.
All of this is great for Bitcoin in shedding its reputation as an unsafe, risky ‘internet’ dollar, as only a few years ago one of the pioneers of Bitcoin was arrested for money laundering, and just recently a price crash in the Bitcoin market caused serious upheaval. Can Bitcoin surpass these hurdles and become a key player in the eCommerce sphere?
What is Bitcoin?
Before we get into it, let’s take a moment to see what Bitcoin is exactly.
Bitcoin is a digital currency that allows transactions to be made without banks, governments or any institutions whatsoever. Transactions from the consumer’s wallet are processed, confirmed and recorded by Bitcoin enthusiasts – everything is open source, so everything is anonymous and there are no transaction fees.
Bitcoin arrived on the scene in 2009 and was created by a mysterious programmer who goes by the alias Satoshi Nakamoto. People can buy bitcoins, keep them in their digital wallets and use them to pay for goods or services by transferring bitcoins through Coinbase or Bitpay. However since these aren’t regulated, you cannot insure your ‘wallet’ or your bitcoins with anyone. Only your wallet’s ID is publically visible, your name is nowhere to be found. This type of anonymity makes bitcoin a preferred payment option for criminals, but that shouldn’t put you off.
How is Bitcoin Used in eCommerce?
Despite the inherent risks that come with using an e-currency, Bitcoin is an interesting and vibrant technology that could quite possibly change how eCommerce is done in the future.
In today’s global village, we want everything NOW (yesterday, if possible) and the ‘instant cash’ option Bitcoin provides certainly fulfils that requirement. Instead of waiting hours, days or weeks for a transaction to go through (and what eCommerce site hasn’t been there), Bitcoin is – for the most part, instantaneous. So, instead of wondering if the check will clear or why your Paypal account is locked or if the bank has screwed up your transfer again, you’ll just have your money – in theory, anyway.
Bitcoin, at its full potential, could speed up every part of the logistics of business. Instead of merchants waiting days for a payment, they could instantly ship out products.
A Muse for Innovation
Of course Bitcoin has its defects and has an inherent stigma of instability attached to it that might take decades to dissipate. Despite all of that, the Bitcoin concept is one that is inspiring entrepreneurs. Also with Bitcoin being an open-source model, it can be improved upon in the future and with no propriety redundancy.
Bitcoin isn’t even the only crypto-currency available right now. Its counterparts include Dogecoin (based on a dog meme – don’t ask), Litecoin, Ripple, Peercoin and Mastercoin and they could all improve upon or even entirely resolve the problems associated with Bitcoin. With the popularity and interest in this online currency niche, transactions will become speedier, cheaper, more convenient and efficient. Could it change banking and ecommerce long term? Maybe. But that’s a solid maybe.
Should you be accepting Bitcoin in your store right now? We’d still say ‘no’ if you asked us today, but with every passing week and month Bitcoin becomes more stable, and more secure. It’s something to keep your eye on at the very least.