5 Reasons Cryptocurrency Payments May Spell the Future of E-Commerce
This week, one of the leading cryptocurrency payment providers, CoinPayments, announced a partnership with the major e-commerce platform, Shopify, to support more than 300 cryptocurrency payments for various goods.
What CoinPayments does is combine cutting-edge technologies to bridge cryptocurrencies with legacy payment systems to create a decentralized payment processing platform for e-commerce leaders. The company got started back in 2013 and since then has grown the entire system to support hundreds of cryptocurrencies for online retailers.
In addition to its new partnership with Shopify, CoinPayments also has announced an airdrop launch of its own “CPS” utility token. Similar in certain ways to the CyberMiles Token (CMT), the CPS token acts as an incentive to provide digital merchants and wallet holders with a better experience using cryptocurrencies on e-commerce platforms.
A Decentralized Future for E-Commerce
Not surprisingly, CoinPayment’s recent partnership with Shopify caught our attention, as CyberMiles is focused on building customized smart contract templates for e-commerce companies to (re)launch their businesses on the blockchain. At CyberMiles, we believe that the future of e-commerce will be built around blockchain technology, for myriad reasons outlined previously. Major e-commerce platforms that are accepting cryptocurrency payments are demonstrating that this future may be already here.
Here are five reasons why cryptocurrency payments represent the future of e-commerce:
1. Lower Transactions Fees
Both retailers and consumers can benefit from cryptocurrency transactions. For example, the leading Bitcoin payment provider, BitPay, takes a flat 1% settlement charge for Bitcoin payments. Credit card companies, by contrast, can charge upwards of 3% in processing fees. These fees can add up. The CyberMiles blockchain waives transaction fees for most common operations, a feat achievable without sacrificing the security of the e-commerce provider’s network.
2. Faster Transactions
At the end of 2017, the average time to confirm a Bitcoin transaction was 78 minutes. By the beginning of January, Ethereum faced slow transaction times and higher fees due to the high number of transactions processed by the network. Yet other blockchain networks now can facilitate multiple times the number of cryptocurrency transactions per second. The CyberMiles blockchain was built around the concept of optimal response to high e-commerce transaction demands, reaching 10,000 transactions per second with CMT.
3. Peer-to-Peer Exchanges
One of the main benefits associated with accepting cryptocurrency payments is that there are no middlemen involved. Bitcoin’s peer-to-peer technology is designed to facilitate (at least in theory) instantaneous, cheap and secure settlement of values without the intervention of any middleman (i.e. banks or other financial institutions).
4. Secure Transactions
Another primary benefit of using cryptocurrencies for e-commerce transactions is to protect against fraud. Crypto payments are irreversible and secure, as all transactions are recorded on the blockchain and funds are locked in a public key cryptography system. Also, the way a payment takes place in a decentralized blockchain provides a level on encryption that is virtually impossible to break.
5. Reward Incentives
More and more e-commerce platforms that accept cryptocurrencies offer reward programs. For example, CoinPayments provides its users with CPS tokens to save on transaction fees, earn additional coins as well as rebates on CoinPayment’s decentralized marketplace. CyberMiles, for our part, will reward validators for both creating new blocks (network will mint new coins) and executing smart contracts in the block (“gas” fees), among a host of other incentives and network benefits.