Three Powerful Factors that Increase Cryptocurrency Adoption in e-commerce
Michael V Khalsa, Visionary and Technical Lead
Global e-commerce is a rapidly growing business domain in our Internet-driven world. Within the next two years, the worldwide e-commerce market is expected to grow to just under $ 10 trillion, with a whopping $3.2 trillion of that in business-to-consumer (B2C) sales. In the light of these numbers, combined with the need for efficiency within market forces, Cryptocurrency has the potential to become a sagnificant means of exchange. However, the following three factors must be present in order to ensure such evolution:
- Ease of Use
- Presence of an Economic Driver
- Trust between Market Actors
Ease of Use
Use of cryptocurrency needs to be as easy, or easier, to use as a credit card is today; such as a thumb print on your phone with facial recognition, selecting your payment account, and clicking pay. Notice I have not mentioned security, scalability, speed, or behind the scene identity validations. Albeit all important qualities, for the end user, these are transparent, just like you expect a light switch to work when you turn it on. If this is not the case, then it is not a working solution, hence these all fall under ease of use.
The Presence of an Economic Driver
In order to use cryptocurrency as a means of payment, there has to be an economic driver to do so; this driver could be ease of use or monetary. Currently, some cryptocurrencies provide more stable and/or secure alternatives to fiat currency in some regions, and examples of this can already be found in Africa. As trust is earned in the consumer and business areas, the adaptation will spread globally.
Trust between Market Actors
A third crucial element is the ability for market actors to trust one another when transacting, making certain they receive their product or service in a satisfactory condition. Unlike using a credit card, without further safeguards there is no recourse once a cryptocurrency payment is made. This risk factor is often not worth it, particularly if purchasing from an unknown vendor. A solution to this is escrow and arbitration services implemented through smart contracts protecting the consumers and providing them with a way for their funds to be returned if something goes wrong. The Government Network project aspires to overcome these hurdles and develop trust in escrow services, along with arbitration, both for the use of trades on its network and as a service to other platforms.
Once a significant portion of e-commerce starts using cryptocurrency, say .25 to 1%, those who do not comply with all three of the above-mentioned elements will have missed the boat, as building branded trust is just as important as the technical aspects of implementation. At that time this will be a billion dollar and growing industry.
We, at the Government Network have worked out atomic processes to ensure that much of the escrow and arbitration processes can be automated. Simultaneously, we are working on Sovereign Identity Management as a critical piece of the solution not just for our citizens, but for everyone. This is a key part of the first quality of the triad of adoption: ease of use.
The bottom line is, any new technology to be accepted needs to be easy to use, straight-forward, and trustworthy to the last mile. Notice that the Business-to-Business (B2B) portion of sales is much larger, estimated to be ~6.7 trillion dollars globally in 2020. B2B transactions often require additional safeguards, such as custom smart contracts with stages of fulfillment, multi-signature approvals, KYC and AML requirements, delayed triggers pending a chance for human intervention, penalties and bonuses, and more complex arbitration mechanisms. The Government Network yearns to serve the needs of such trade.
Along with escrow services we plan to develop ‘proof of authenticity’ stamps available to merchants providing further confidence to consumers. This can range from simple authentication of the origin of a product to more complex proofs which include ‘fair-trade’ arrangements, and links to immutable multi-step manufacturing authenticity protecting against counterfeit products.
The Government Network invites you to learn more about these evolutionary advances that we are endeavoring to build in cooperation with the larger community, from vision to practicality with excellence. Together, let's make our world a better place.
Michael V Khalsa