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A STUDY ON THE LINKING OF CRYPTOCURRENCIES IN E-COMMERCE SECTOR
Article in INTERNATIONAL JOURNAL OF CREATIVE RESEARCH THOUGHTS · March 2023
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www.ijcrt.org © 2023 IJCRT | Volume 11, Issue 3 March 2023 | ISSN: 2320-2882
A STUDY ON THE LINKING OF
CRYPTOCURRENCIES IN E-COMMERCE
SECTOR
1
Sini M.George, 2Dr. Basanti Mathew, 3Dr. Deepti Maheshwari
1
Research Scholar, 2HOD & Professor, 3Ex Dean& Professor
1
Department of Commerce
1
Rabindranath Tagore University Bhopal ,M.P. (India)
Abstract: As the world moves to a Cashless economy, something more has sprung up in this move. Cryptocurrencies are becoming the
medium of making payment in this cashless era. The hard cash money has been turned into virtual currencies in an encrypted form.
Supported by Blockchain technology, these currencies have changed many of the definitions of today. Transactions in today’s time are
slowly moving towards it. But there are uncertainties related to its use and application. This paper aims at understanding the use of
Cryptocurrencies through the lens of E-Commerce sector. The ever growing platform of the E- Commerce sector will be very much
impacted with the use of such payments. The study includes the understanding of the pros and cons in this respect along with the keys
to face the challenges.
Keywords: Cryptocurrencies, Blockchain technology, E- Commerce, Transactions
I. Introduction:
The new talk of the town is ‘Cryptocurrency’. Till now we were busy understanding and using plastic money , UPI payments, internet
banking, Payment apps and all source of cashless transactions. But no one thought about exchanging virtual currencies over
transactions. Such currencies which could be used online and exist only in the electronic form are called Cryptocurrencies. It is a
medium of exchange that is decentralized and digitally encrypted and so it can be also used as a form of payment in exchanging goods
and services online. These currencies work using the Blockchain technology. The Blockchain technology is one among the most
hyped technological revolutions of the century. Initially it was developed to power the bitcoin but now it handles thousands of
currencies. Blockchain is an open digital ledger consisting of transactions maintained by network of computers in such an arrangement
that is difficult to alter and hack. The currencies could be easily exchanged between the individuals without the involvement of banks
and third parties. These records of transactions are called blocks linked together using Cryptography. The data is independently
verifiable and cannot be altered after recording. The use of such currencies in e-commerce is of a great significance to study. E-
Commerce is a platform where multiple transactions take place. So how these virtual currencies are going to impact the e-commerce
sector is an essential point to study.
II. Linking Cryptocurrencies & E-Commerce:
The use of cryptocurrencies in E-commerce can be linked to the transactions that take place during the exchange process. Here the
payment procedure happens without the involvement of any third party like a bank or any financial institution. Over the time it has
become important and purposive for the e-commerce companies to accept the crypto payments. The one making a crypto payment has
a digital wallet which is procured through crypto currency exchanges or in the offline mode with the help of a flash-drive like device.
The consumer can use this wallet to transfer funds to the desired vendor. There are many cryptocurrency exchanges available. The four
most prominent among them are:
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1. Bitcoin (BTC)
2. Litecoin (LTC)
3. Ethereum (ETH)
4. Ripple (XRP)
5. Bitcoin Cash
6. Ethereum Classic
Market can now be viewed in a different perspective. A new class of consumers have entered the market, who are tech-savvy and
forward thinking. A faster transaction process can be assured with the use of such currencies. The companies accepting such payments
have found themselves at a greater height after this acceptance. Especially in the retail sector the use of cryptocurrencies is gaining
favor. It is in a great way enhancing the consumer’s journey and broadening the consumer base. The use of plastic money is the most
common method of payment along with the online payment gateways but if the consumer’s become in habit with these
cryptocurrencies then the other payment gateways would be less preferred. Thus, the linkage between the cryptocurrencies with the e-
commerce platform is viable and promising.
III. Advantages of using Cryptocurrencies in E-Commerce
Assurance of Market Expansion
This new payment method assures the marketers the entry of consumers on a wide scale. Such consumers have a desirable knowledge
of technology and are future oriented in every sense. Consumers have a digital wallet could enter any e-commerce platform and
transact easily, thus broadening the market. Worldwide the consumers and sellers are running the exchange process and expanding the
market.
Increased Security
The main purpose of creating blockchain powered currency was to prevent the fraudulent activities which take place during the
exchange process. There is no inclusion of any middlemen in the transaction process. Even the financial institutions have no hand in
this entire process. All the details of the transactions are kept confidential and only the user of the digital wallet can have access to it.
Only with an explicit permission, money can be withdrawn from a user’s wallet.
Benefit of Anonymity
The purchases can be done without revealing any personal information and anonymity can be maintained. The wallet addresses are
encrypted, so there won’t be any leakage of confidential information during the transaction.
Low transaction cost
Each transaction is associated with a low transaction fees. Only a nominal percentage of fee is charged while transacting with the
cryptocurrencies. But this does not include the taxes. The inclusion of taxes is based on the regulations of the country.
Faster transactions
The processing of the cryptocurrency is quite fast as compared to the credit card system. E-Commerce companies are very much
benefitted with this advantage as it helps the company to maintain the flow of its funds. There is quick transfer of fund into the wallet
as well as prompt payments can be assured through this.
IV. Disadvantages of using Cryptocurrencies in E-Commerce
Volatility
Since these currencies are not backed up by an official currency, there can be chances of volatility in their inherent value. This will
have a detriment effect on the prices which may fluctuate at a high level. The investment by the potential investors will be reduced in
such circumstances.
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Threat to Sustainability
Sustainability stands as a threatening issue as the mining of the cryptocoins involves a great of energy. Such massive energy
consumption in form of electricity use affects the environment’s sustainability. In the future, regulations and taxes can be imposed on
such currencies.
Problem of Scepticism
Lack of public trust still surrounds the cryptocurrencies due to the complicated technical mechanism. There is a creation of distrust
created through the media which pulls back the users from such transactions. Thus this will pose a problem of reduced consumer
market for the e-commerce platforms.
V. Key Requirements to adopt Cryptocurrencies
Awareness
It is very important that there is a level of acceptance and the understanding of cryptocurrencies among the consumers. Though
cryptocurrencies have attained much attention through media coverage and other sources now-a-days, but still it is relatively an
unfamiliar concept for many. So it may become difficult for businesses to make customers use cryptocurrencies as a payment option,
especially if they are unaware with how to use such currencies or are doubtful about the security of payments with these digital assets.
Infrastructure
The next factor to consider is infrastructure and the backup available for businesses to facilitate and process crypto enabled payments.
Though there are several platforms and services available to make easier for businesses to manage cryptocurrency payments, these
solutions may be sophisticated and not widely adopted than traditional payment gateways. This makes it more challenging for the
businesses to induce cryptocurrency payments into their already existing e-commerce systems and may have to go for additional
resources and expertise to set up and maintain.
Regulations
There are various regulatory and compliance issues to use cryptocurrencies in e-commerce. There are many countries, where still a lot
of questions and doubts about the legal status and treatment of cryptocurrencies, which can be a challenge for the businesses that want
to accept cryptocurrencies as payment option.
VI. Conclusion
There possibilities to link the cryptocurrencies with the e-commerce sector. But there are many challenges ahead which may be a
barrier to this initiative. As the e-commerce sector grows the use of crypto currencies would give a big boost to it. The broadening of
the consumer base, security enhancement, speedy transactions, and confidentiality will all make the consumers believe in the use of
such payments. The benefit to the consumers will be a greater benefit for the companies as well. Only after creating a strong base and
backup, such currencies will find a value in the transaction process. So thus the cryptocurrencies and their application is a challenge
with a wide road of opportunities.
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VII. Bibliography and References:
https://orca.cardiff.ac.uk/id/eprint/126790/7/Blockchain%20Paper%20-Sept_26_2019%20-%20updated.pdf
https://www.academia.edu/39803603/Impact_of_Digital_Currency_in_E_commerce
http://ijrar.com/upload_issue/ijrar_issue_20543250.pdf
https://www.sciencedirect.com/science/article/pii/S1567422321000260
https://www.gorillagroup.com/trending/the-adoption-of-cryptocurrencies-in-ecommerce
https://www.sotatek.com/the-rise-of-cryptocurrencies-and-blockchain-in-e-commerce-benefits-and-challenges/
https://www.business.com/articles/6-reasons-to-accept-cryptocurrency/
https://www.sciencedirect.com/science/article/pii/S0160791X22002007
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