Is Cryptocurrency dead for ecommerce?
Crpytocurrency was hailed as the next generation solution to online payments. An easy way to pay cross border, secure but untraceable and at the same time removing those pesky hidden exchange rates coupled with cross border payment fees. But is cryptocurrency dead so far as ecommerce goes? Major marketplaces are yet to adopt it.
2019 was the year we saw many tentatively add their names as supporters of Facebook’s Libra, only to drop it like a hot potato, perhaps not in itself eschewing cryptocurrency but because of the political attention, but Libra has joined the cryptocurrency dead society.
Whenever I’ve asked about cryptocurrency at industry events there has always been a few in the room who were wildly enthusiastic and full of stories about how they’re making a fortune as the different offerings rise in value. Slightly fewer stories about people actually spending it in the real world. Perhaps a more realistic view comes from friends and neighbours who while they use marketplaces and shop online give me blank stares when I ask about cryptocurrency and not only don’t understand it but have no need of it in their lives.
A recent report by SearchNode found that 80% of respondents did not think that cryptocurrencies are relevant or helpful for their ecommerce businesses with another 18% in the ‘not sure’ category. Only 2% believe cryptocurrencies are helpful for their business, with less than 1% thinking they are somewhat helpful. Worth noting that ‘helpful’ doesn’t necessarily mean offing as a consumer payment method.
The first cryptocurrency to go mainstream was Bitcoin which was created in 2009. That’s more than a decade ago and it’s safe to say that, coming just two years after the first iPhone, it’s not had anywhere near the same mass market success. Whilst today virtually everyone carries a smart phone, in reality hardly anyone uses cryptocurrency.
Do you see a future for virtual currency in your business or already use it today, even if not for consumer payments perhaps for paying suppliers? Or is cryptocurrency dead for ecommerce and something that looked good but never caught on and now never will.
The biggest issue with a cryptocurrency like Bitcoin, Ethereum, Litecoin, etc is that the value is not stable. So it is very hard for a merchant/supplier to accept a cryptocurrency when the value changes so dramatically over 24 hours. Facebook Libra was to be a stable cryptocurrency which would have been more appealing to merchants and suppliers.
It’s also not idiot proof and we live in a world where inbreds are the majority.