What has changed since the introduction of Bitcoin
Once the Internet became widely available, e-commerce naturally was embraced by the public. Buyers and merchants used common payment methods available at the time without much worry until a few things changed:
Why Bitcoin can solve a unique problem
Traditionally, buying goods on an e-commerce platform would go as follows: create a user identity, go through one or more third- party financial institutions (e.g. a credit card company, a payment processing system, or both), and then complete the transaction. Problems with outdated forms of currency such as credit cards and money transfers on an e-commerce platform include:
The algorithm used in Bitcoin transactions involves randomly assigning a transaction to a string of transactions, also known as a blockchain. In addition to decreasing identity theft by eliminating third-party institutions, the probability that a cyber-criminal could obtain sensitive information was reported to be less than 0.1% in Satoshi Nakamoto's "Bitcoin: a Peer-to-Peer Electronic Cash System." The random assignment of transactions to an ever-morphing blockchain not only lessens the probability of others wrongfully obtaining sensitive information by design; it also increases security as it remains more cost-effective for cyber-criminals to implement tactics that are familiar, such as infecting personal computers with various types of malware through methods such as sending malware via email or engaging in phishing scams.
Is Bitcoin only for e-commerce businesses?
Bitcoin is used primarily for e-commerce. However, brick-and-mortar storefronts in locations throughout the United States-from businesses in the Greater Leigh Valley area in Pennsylvania to businesses in Los Angeles, California-can gain more revenue from a highly effective e-commerce branch or business that frequently engages in international commerce. For example, sending a large amount of currency in USD to Canada can be a logistical nightmare. And, it can take up to 2-3 weeks to clear customs. Bitcoin transfer circumvents problems with transferring forms of currency attached to a country or conglomerate of countries (e.g. the European Union introduced the Euro).
A summary of how Bitcoin can help e-commerce buyers and sellers
In September of 2012, the Bitcoin Foundation was launched in order to standardize Bitcoin practices, protect participants in e-commerce transactions, and promote the Bitcoin economy. Bitcoin offers increased security, increased transaction speed, and eliminates other issues associated with the involvement of third-party financial institutions. The simplicity associated with Bitcoin and crypto-currency is what makes it an ideal solution to solve growing problems associated with methods of online payment on e-commerce platforms.
Once the Internet became widely available, e-commerce naturally was embraced by the public. Buyers and merchants used common payment methods available at the time without much worry until a few things changed:
- E-commerce mega platforms could not provide adequate customer service or realistically monitor what was happening within their selling platforms.
- Merchants became increasingly frustrated with third-party financial institutions.
- Buyers became increasingly aware of identity theft, credit card fraud, and other cyber-crimes that could take place on e-commerce platforms due to increased media coverage and widespread anecdotal evidence.
Why Bitcoin can solve a unique problem
Traditionally, buying goods on an e-commerce platform would go as follows: create a user identity, go through one or more third- party financial institutions (e.g. a credit card company, a payment processing system, or both), and then complete the transaction. Problems with outdated forms of currency such as credit cards and money transfers on an e-commerce platform include:
- Decreased protection of buyer sensitive information
- Almost all transactions are reversible
- Time-lag between initiation of payment and completion
The algorithm used in Bitcoin transactions involves randomly assigning a transaction to a string of transactions, also known as a blockchain. In addition to decreasing identity theft by eliminating third-party institutions, the probability that a cyber-criminal could obtain sensitive information was reported to be less than 0.1% in Satoshi Nakamoto's "Bitcoin: a Peer-to-Peer Electronic Cash System." The random assignment of transactions to an ever-morphing blockchain not only lessens the probability of others wrongfully obtaining sensitive information by design; it also increases security as it remains more cost-effective for cyber-criminals to implement tactics that are familiar, such as infecting personal computers with various types of malware through methods such as sending malware via email or engaging in phishing scams.
Is Bitcoin only for e-commerce businesses?
Bitcoin is used primarily for e-commerce. However, brick-and-mortar storefronts in locations throughout the United States-from businesses in the Greater Leigh Valley area in Pennsylvania to businesses in Los Angeles, California-can gain more revenue from a highly effective e-commerce branch or business that frequently engages in international commerce. For example, sending a large amount of currency in USD to Canada can be a logistical nightmare. And, it can take up to 2-3 weeks to clear customs. Bitcoin transfer circumvents problems with transferring forms of currency attached to a country or conglomerate of countries (e.g. the European Union introduced the Euro).
A summary of how Bitcoin can help e-commerce buyers and sellers
In September of 2012, the Bitcoin Foundation was launched in order to standardize Bitcoin practices, protect participants in e-commerce transactions, and promote the Bitcoin economy. Bitcoin offers increased security, increased transaction speed, and eliminates other issues associated with the involvement of third-party financial institutions. The simplicity associated with Bitcoin and crypto-currency is what makes it an ideal solution to solve growing problems associated with methods of online payment on e-commerce platforms.
3 Takeaway Points - Bitcoin And E-Commerce
1. Bitcoin is way to effectively solve problems associated with online payment for merchant and is more cost-effective.
2. Bitcoin reduces the probability of theft of sensitive information to less than 0.1% thus making online transactions safer for buyers.
3. Bitcoin has increasingly positive media coverage and promise of integration into mainstream e-commerce in the future.
1. Bitcoin is way to effectively solve problems associated with online payment for merchant and is more cost-effective.
2. Bitcoin reduces the probability of theft of sensitive information to less than 0.1% thus making online transactions safer for buyers.
3. Bitcoin has increasingly positive media coverage and promise of integration into mainstream e-commerce in the future.
