The market capitalization level of the two most widely used digital currencies, Bitcoin and Ethereum, is well over one trillion dollars. They are gaining relevance, although, for the moment, their use as an investment resource predominates. Cryptocurrencies, or rather blockchain technology, have a number of undeniable advantages for e-commerce:
– Immediacy. Transactions through cryptocurrencies are immediate, unlike bank transfers which, in some cases, can take days.
– Confidentiality and security. These transfers are completely anonymous and guaranteed by the entire blockchain network. Thanks to the blockchain, it is difficult to reuse or counterfeit cryptocurrencies and cancel a transaction once completed.
– Cheaper transfers. Although not always, cryptocurrency transfers usually offer a lower cost than bank transfers or traditional payment gateways, generally around 1%. This reduction in transfer prices can allow you to increase margins or reduce additional costs at the time of payment.
However, there are also some risks, this technology still has some weaknesses that deserve to be taken into account:
– Volatility. The eminent speculative use of cryptocurrencies is their main problem today.
– Regulation and fragmentation of currencies. Cryptocurrencies advocate being a democratizing tool outside governments and financial institutions. Although this endows them with certain advantages, it also prevents them from being covered by protection mechanisms such as Deposit Guarantee Funds or Investor Guarantee Funds. In addition, there are thousands of different types, so customer and e-commerce preferences need to be aligned.
– Energy and sustainability. It is well known that mining, the series of complex cryptographic calculations that secure and record cryptocurrency transactions, requires high energy consumption and has a high environmental impact. According to estimates for 2021 by the Bitcoin Electricity Consumption Index of the University of Cambridge, Bitcoin consumes approximately 143 terawatt hours (TWh) of electricity per year, about 0.65% of global electricity consumption and more than countries such as Norway, Chile or Switzerland.