Cryptocurrency and eCommerce: 5 Ways Cryptocurrency is Transforming eCommerce

Posted by Ellen on December 28th, 2022

There was a time when people were highly cautious of the notion of cryptocurrency. It was even hard to comprehend using it for online transactions. But the advent of cryptocurrency brought with it a new wave of a digital revolution that no one had thought about before.

With the way cryptocurrency kept making exceptional progress toward the modernization of the online world, people grew comfortable with it and everyone wanted to know what the fuss is all about.

If you are also new to the idea of cryptocurrency, let’s dive into its definition:

What is Cryptocurrency?

A cryptocurrency is a form of digital currency that is encrypted and secured through blockchain technology. It is an autonomous kind of currency that does not work under the authority of any third party. Instead, it is used and accessed by individuals.

Cryptocurrency is created by mining which involves the use of computer codes to solve complicated mathematical problems. These result in the generation of coins. These coins can be used to process transactions from the parties involved in the process.

Every cryptocurrency transaction is secured and recorded in a comprehensive decentralized ledger. These transactions are blocks that are secured in all computers that are connected to the server for a particular transaction.

In addition to this, the blocks of transactions are saved in a way that they cannot be edited later without changing the information secured in all the connected blocks.

Like any other industry, cryptocurrency has also managed to change the entirety of how eCommerce businesses work. The volatility of cryptocurrency cannot be argued but its feasibility is also indisputable.

According to Gartner, by the year 2024, approximately 20% of large enterprises will use digital means of currency. This statistic just proved the immense importance of cryptocurrency.

When we talk about eCommerce businesses, we can see that the industry of eCommerce website development has flourished more in recent years after the rise of blockchain and cryptocurrency.

There are several examples in the eCommerce industry today that have started accepting cryptocurrency as their payments. They all have integrated digital wallets into their payment methods to penetrate a whole new target market of buyers who are using cryptocurrencies.

These notable examples include but are not limited to Microsoft, Lush, Starbucks, eGifter, airBaltic, etc.

Since the facility of cryptocurrency has benefitted eCommerce a lot, we will look at some of the ways cryptocurrency is transforming eCommerce:

1.     Increased Transparency

According to Investopedia, cryptocurrency provides a transparent road that can be accessed by all the parties involved in a particular transaction. The participants involved in the network can all access the information.

Participants can easily search the blocks available and see the whole history of a particular transaction. They can also see any changes made during the transaction by any of the parties involved.

In a blockchain, people can see the history and current standing of the transactions. But the plus point here is that no other party can access the information without the permission of the parties involved in a particular transaction.

This makes the whole procedure of eCommerce transactions extremely easier for businesses and customers alike. In any case of fraud and mistakes, both businesses and customers can see the history of the whole transaction.

Through this, the mistake becomes clear for both sides. This effectively eliminates the risk of any unnecessary burden on an individual party of a mistake.

If you are on the lookout for eCommerce development services, you should think critically and choose a company that can aptly provide you with appropriate services according to the needs of your eCommerce business.

2.     Less Fraudulent Activities

The traditional means of payment usually facilitate the consumers more in case of any fraudulent transactions. The process is extremely lengthy for any chargeback and the merchant gets the short stick of the end here.

With the emergence of blockchain technology, control is back in the hands of the merchants. The concept of ‘friendly fraud’ has made businesses suffer tremendously from several deceitful activities.

Friendly fraud, often known as chargeback fraud is when a cardholder recognizes a fraudulent activity through their card that is not done by them. This way, they can easily take back any transaction done.

This hurts the businesses a lot as they have already proceeded with a particular transaction and the customer suddenly refuses to accept the transaction.

Blockchain technology has effectively managed to minimize the control of consumers over transactions, IBM. Instead, they have control over whether to refund a particular customer or not.

3.     Better Payment Options

The orthodox method of payment proved to be quite dangerous for the safety of consumers. There were several accidents of fraudulent activities that have harmed a lot the customers and sometimes even businesses.

Now, take into consideration the integration of blockchain technology into the eCommerce world. Cryptocurrency provided a facility for safe and secure transactions that cannot be used for criminal activities.

These transactions are all heavily entwined together to provide a complete and thorough way of conducting business online. Furthermore, the consumers cannot be tracked through these transactions. This makes it even safer for people to easily send and receive money.

Many eCommerce businesses require custom eCommerce development services for their businesses. They cannot work with standard options and features.

4.     Easy Warranties

E-commerce has the drawback of a significant amount of paperwork that can be quite strenuous for every party involved in the transaction. The warranty of a product and documents requiring signatures makes the whole process longer.

Conducting transactions with the aid of cryptocurrency notably minimized the length of the whole procedure. Blockchain technology helps its users in saving receipts and complete transactions online in blocks so that nothing is overlooked.

Through this, cryptocurrency can save everything in blocks and can provide immense security to users. In addition to this, blockchain also provides the facility of rewards for consumers.

Any eCommerce store can set rewards for long-term and loyal consumers. In this, any customer that has reached a certain amount of time in the relationship with the business or spent a particular amount of money will be eligible for a reward.

This will provide a sense of accomplishment to the consumers and they will feel more connected to the business. The biggest perk here is the complete history of a transaction saved in the blockchain which provides an ease to businesses in providing the right rewards to the right customers.

5.     Extreme Data Security

The foremost concern of people today is the safety of their online information. When people buy anything online, businesses and websites ask them to enter some of their personal information for the procedure of the transaction.

This private data of the users can be used for any nefarious purpose or criminal activity without the knowledge of the users. There have been many incidents where the users became the victim of these criminal activities and have to lose their information.

These fraudulent activities not only cause damage to the users but also the businesses as their reputation becomes questionable in the eyes of the customers. This way, they can lose a big chunk of their clientele. Also, new customers will be reluctant to conduct business with them.

Cryptocurrency offers optimum security to its users. The data and transactions entered in the blocks provide safety to customers and businesses. There is high security of the data that cannot be easily stolen.