Quick Cryptocurrency Primer
Just to clarify, there are no "coins" being carried around with cryptocurrencies, Bitcoin, Litecoin, Ethereum, and the rest. Cryptocurrencies are entirely digital and live in their own respective Blockchains. The Block-what-now? A Blockchain is a kind of global-internet "ledger" (nerds hate it when we call it that because it's so much more) that keeps a secure record of every transaction exchanged between parties.
The "block" in Blockchain are linked together in such a way that the sequence of the blocks cannot be guessed or fabricated; they are created as they go in real-time and are replicated around the world. The whole blockchain must be in agreement with itself in order to confirm the validity of a transaction and it checks itself constantly. If someone tries to tamper with one part of a transaction in one block, all the other blocks around the world will see that it's in disagreement and declare it to be invalid, thus preventing tampering.
As a result, the entire blockchain "agrees" that your transactions exist; that you really do have 10 Bitcoin in your wallet; that you really did sell 1 Bitcoin to another user, and so on.
Since blockchains for any cryptocurrency is distributed and decentralized across all participating computers and wallets, there is no central controlling bank, government, or entity. This provides the advantage of the blockchain being quicker, more reliable, cheaper, and untethered to government policy.
So Why Accept Cryptocurrencies?
In short, legitimacy. Not because it is legitimate already, but because it could be headed in legitimate territory. Large enterprise is beginning to invest heavily in these currencies. Large incumbent ECommerce players such as Amazon, Target, Newegg, Dell, and many more beginning to accept it as payment. Processing gateways have already started to mature and the risks of accepting cryptocurrency has shrunk to almost nothing. While the potential benefits of improved cash flow, customer satisfaction, and the bonus of an ever increasing value makes for a boost in business.
Here are some benefits your ECommerce store can expect by accepting cryptocurrency:
- Cryptocurrency payments are “push” transactions. Meaning that they’re initiated by the buyer. As a result chargebacks are basically impossible.
- Payments are also processed immediately into your crypto account
- With “push” transactions, your ECommerce store won't hold or safeguard sensitive customer payment information, reducing the risk of having information stolen. It's the responsibility of the blockchain, this is a very good thing.
- Minimal to no processing fees. You can accept payments and exchange crypto into USD/CAD/GBP/EUR easily through third-party processors. Coinbase, one of the most popular processors, charges 1% or less to convert crypto to dollars.
- By accepting cryptocurrencies as a form of payment, you increase customer adoption and satisfaction and could reconnect with past customers. You build your reputation as an industry leader and build brand awareness.
- Gain new customers who are cryptocurrency enthusiasts that will help promote your business within the crypto community.
