Question

Describe the utility token category. Use one (1) cryptocurrency as an example and discuss your reasons for choosing that cryptocurrency for this category. Examine how cryptocurrencies as a utility token could play an important role to promote eCommerce, and thus influencing the eCommerce industry, future market or consumer behaviour trend.

Answer 1

Let us consider BITCOIN

I choose bitcoin because it is one of the most popular and widely used crypto currency.

is a decentralized digital currency without a central bank or single administrator that can be sent from user to user on the peer-to-peer bitcoin network without the need for intermediaries

Cryptocurrency in E-commerce

Though e-commerce is attracting customers across nations, it is not to be denied that the industry faces immense challenges on account of the fragile infrastructure of the traditional financial system. The customers use their credit/ debit cards to make payments for their purchases online. The banks act as intermediaries to facilitate the digital transaction of cash across networks.

The Cryptocurrency perks for E-commerce

Faster transactions

The crypto transactions are carried out at such an impossible speed that the traditional methods of transaction cannot come anywhere near it. The number of crypto transactions per second is at rise with the increase in the speed of your network connectivity. Now, which e-commerce customer will not be curious to give a shot at it for an online

purchase he or she makes?

Transaction Fees

A credit card payment takes around 3% of the shopping expense to process the same. On the contrary, the customers need not pay additional charges towards transaction processing when they shop online using a cryptocurrency payment gateway. Yes, cryptocurrency makes it all happen by way of promoting direct transaction of cash between the participants and eliminating the presence of intermediates thereby.

Push Transactions

As the virtual currency works on a peer-to-peer base, the buyer and the merchant come in direct contact with each other. The push transactions of cryptocurrency make sure no storage of information happens anywhere along the line. With the loopholes sealed, there is no room for data breach when the customers pay for their purchases via digital means.

Reward programs

The e-commerce platforms provide special rewards to customers who opt for crypto payments. The reward shall usually be in the form of points or tokens that they can make use of on their next e-shopping venture. This ensures that the customers come back again and again to buy products online as they never run short of exclusive rewards. The coming back of customers means more cash flow into the e-commerce industry which in turn increases its overall market value in the long run