When I ran my Free Book campaign on Amazon last week, it really took a while before reaching number #1 in US and Worldwide.
Until then, number 1, 2, 3 were books about Bitcoin. You might have heard about it, or maybe not. Well, here’s why it could change the way we shop online.
1. What is Bitcoin?
Bitcoin is a new “online currency” that uses peer-to-peer technology to offer a secure way of exchanging funds. (Wow, that definition looks full of jargon!) Here’s my version: Bitcoin is a virtual currency that can be used online to purchase products without using a credit card tied to a bank account.
Yes, you got it, this opens a lot of room for online fraud… but we’ll see that later.
Bitcoin is open-source, public, nobody owns it and everyone can use it. It’s the first currency of its kind.
A bit of techy stuff: Bitcoin is managed via a complicated algorithm that only an advanced computer system can handle. Only 21 million bitcoins can exist at any one time (as I write), and this means it’s easier to control. Bitcoin is not run by any bank or centralized system, and it is often referred to as a decentralized currency with no ruling authority.
What’s in it for me? Well, Bitcoin allows you to pay online with a simple scan. No need to sign up, swipe your card, type a PIN, or sign anything. For businesses, Bitcoin allows to make and receive payments with almost no fees.
That’s it. Bitcoin could really change the future of Ecommerce.
But…
2. Bitcoin Legal Issues
Because Bitcoin offers secure transactions, many criminal organizations have used it in the past. In 2013, the FBI shut down the Silk Road online black market and seized 144.000 bitcoins worth US$28.5 million (source: Wikipedia).
Yes, the most notable problem with bitcoin is that its privacy and “virtuality” opens up to money laundering, criminal activity and black market. A virtual online currency is very easy to use for illegal activities.
Plus, bitcoin thefts are already happening and additional security will need to be implemented if Bitcoin is really to become the future of ecommerce. Here’s what Wikipedia reports:
“In late November 2013, as many as 96,000 bitcoins were stolen from the online drug website Sheep Marketplace. Users were able to track and trace the theft, although the thief made efforts to launder transactions through a process called “tumbling”, designed to make individual coins untraceable by removing the history of wallet addresses that once held them. Although the coins were successfully traced, they have not yet been recovered. A different black market, Silk Road 2, stated that a February 2014 hack allowed bitcoins valued at $2.7 million to be taken from escrow accounts.”
Well, there is no doubt we’ll hear about Bitcoin frauds and activities for another few months! However…
3. Why Bitcoin Could be the Future of Ecommerce
Bitcoin is definitely going to be a huge competitor of PayPal for ecommerce transactions, due to its secure and easy-to-use payment system. Plus, it has low or no fees. PayPal, Stripe and other online payment gateways have been warned!
Is anyone using Bitcoin? Oh, yes. That’s why you’re going to hear more about it. Businesses and individuals such as retailers, law firms, popular websites such as WordPress, Reddit and Flattr are already using it. Bitcoin is growing really fast.
Payment Freedom. In fact, Bitcoin allow users to send and receive money instantly anywhere in the world, any time – and being in full control of their money – without having to pay excessive credit card fees (actually, some Bitcoin transactions are free).
I suggest you read Bitcoin’s FAQ to have a better idea of its potential. Seriously, this could be the best innovation of the 21st century. Many people question Bitcoin’s validity, but it seems to be the only legitimate digital currency coming to market. It offers security and anonymity for easy transactions online and may seriously put Paypal in trouble.