Proponents of cryptocurrency like to make grandiose claims about how the technology will one day change the world. While many of those potential benefits are a long way off, crypto is already beginning to reshape how we think about ecommerce.
The following are just some of the key ways that cryptocurrencies could soon rewrite the rules for ecommerce.
True Borderless Trade
Ecommerce as it currently exists enables us to do business and trade with people and businesses around the world. Selling online means that you aren’t restricted to your physical location and are able to reach out to consumers around the globe.
However, the fiat financial system means that if you want to pay in one currency for a service that is charged in another currency, you will incur extra fees. This can make buying things online much more expensive and puts a serious dent in one of online shopping’s biggest advantages.
Cryptocurrency networks are truly borderless and don’t care, or even know in many cases, where the sender or recipient is located. Cryptocurrencies could make global ecommerce a truly borderless experience with potentially radical consequences.
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One of the most exciting potential uses of cryptocurrencies, and one that is becoming increasingly commonplace, is as a way of donating very small amounts of money to content creators. For example, Twitch viewers can now send donations to streamers directly from their cryptocurrency wallets.
Because there are fees associated with most forms of payment processing, there is a minimum limit on the amount of money that a viewer can donate. For smaller businesses and websites, any limit would have to be even lower than a massive business like Twitch.
But there are now cryptocurrencies like Nano that don’t have any network or payment processing fees. Most cryptocurrencies are maintained by a process called mining, with transaction fees compensating miners for their time and computing power. But cryptocurrencies like Nano mean that any amount of money – whether its millions of pounds or fractions of a penny – can be sent quickly and easily.
Currently, we are seeing micro payments mostly used as a means of enabling viewers to donate to content creators. However, the same principle could ultimately be applied to online services. Consider this price comparison checker that enables users to compare business gas prices. It doesn’t make sense to charge for the use of such a feature in fiat currency – it would either have to cost pennies, in which case it would cost more to process payments, or it would have to cost more than a user would pay.
But with the kind of micro payments made possible with crypto, we could one day see online services charging fees to use their services, but fees that are too small to make much of an impact on any individual user. If each user only has to pay the equivalent to 0.01 pence for using an essential feature, many people would be happy to pay, especially when the amount of money is, quite literally, too small to comprehend.
For content creators, these micro payments can easily add up, especially with more popular content.
If there is one arena where crypto should definitely flourish, it is ecommerce. The question now is what will come first – will ecommerce businesses demand crypto, or will crypto developers make themselves irresistible to ecommerce businesses?