Integrating Bitcoin is usually not that difficult to do, and for most US based businesses the need isn’t that great. If you’re just selling t-shirts to other Americans, PayPal works quite well. Bitcoin is better, but the biggest selling point at the moment is that accepting Bitcoin will get attention, and likely attract a bit of business from enthusiasts.
What gets me out of bed and in front of my computer every morning isn’t crypto-currency, but crypto-currency enabled markets.
In the US we’re already pretty good at our e-commerce and most of us don’t feel much of a need for Bitcoin. But this technology in a lot of ways isn’t about the US, it’s about the rest of the world. Crypto-currency isn’t national, it’s global, and once you really understand that the possibilities become quite exciting. What I would like “Innovative E-Commerce” to mean is overcoming the current barriers to entry in the global e-commerce market.
As I see it there are two major barriers to the e-commerce market; credit cards and a lack of fraud prevention and resolution systems.
We know that credit cards suck, but in the west they’re everywhere, they’re easy to obtain, they get the job done and they’re the rails that e-commerce runs on. If you happen to be somewhere that Visa or PayPal won’t service, the e-commerce the west enjoys is not available to you.
An arguably bigger problem is fraud. Would you trade directly with a small Nigerian based business? What would you do if the transaction went south? Do you know how the Nigerian small claims court functions?
“What we don’t notice as we look around the current state of the digital economy is the enormous number of potential transactions that never happen at all, because the risk of an unsuccessful trade is so high that the parties who might complete a successful deal never even make the attempt.” – Lex Cryptographia, Bitcoinism. (A post everyone in the Bitcoin world should read, IMHO)
To have a truly global e-commerce market you need a common currency, and a dispute resolution system that’s not nationally limited. The global currency we have, the resolution systems are still being built.
OpenBazaar is an excellent example of a project that is building fraud prevention and resolution systems. For those unfamiliar, OpenBazaar is distributed market software that allows people to connect and trade with each other peer-to-peer. It’s eBay the service without eBay the business. OpenBazaar can be used across borders and privately. As such it has to have systems in place that allow people to trust that the transaction will take place as promised in an environment where national legal systems and credit card companies are ineffective arbitrators.
Bitcoin is the currency of the OpenBazaar as it enables the system’s fraud prevention technologies. Bitcoin’s muti-sig functionality is what makes possible the escrow and arbitration systems OpenBazaar uses to reduce the need for trust between parties.
For merchants in areas of the world without trusted legal systems, this kind of technology may allow them to overcome the trust issues that prevent international buyers from trading with them. While buyers would get to enjoy the goods and services available in a truly global market.
There are many systems in development that have the potential to open up new markets. Ethereum’s smart contracts can be used for a wide variety of trade enhancing services and will certainly be used for fraud prevention. Open Transactions is an open source software project that enables financial transactions to take place outside traditional banking systems in a cryptographically secure fashion. This software has the potential to bring financial services to areas of the world where it was previously unavailable.
The digital economy is experiencing a renaissance. The Bitcoin based technologies being developed today are making it easier, faster and more secure to engage in business around the world. Genuinely global, peer-to-peer, low trust markets is what “Innovative E-Commerce” will mean, this is what I hope to make a living at.