Why Bitcoin is rarely seen for online transactions in the technological service landscape
In January 2009, a new currency was created and released out into the world. Existing only online, Bitcoin was created by the anonymous Satoshi Nakamoto offering the promise of lower transaction fees and operated by a decentralized authority.
Unlike regular currency as we know it, Bitcoin is traded, stored, created and distributed through a ledger system and technology known as blockchain. It is the earliest cryptocurrency to achieve such notoriety and widespread success, with several celebrities and entrepreneurs heling to popularise it. Snoop Dogg, Bill Gates, Elon Musk, Mike Tyson and Floyd Mayweather all own Bitcoin; it’s definitely contributed to its widespread usage and success.
But despite many people owning bitcoin or a crypto web app, it’s rarely seen for online transactions. Here are some of the reasons why.
Its options for use are limited
One of the big issues with bitcoin — and the reason it’s not used in many online transactions — is its option for use are still very limited. There are still few places you can actually spend bitcoin, although there are ways to work around it — purchasing vouchers for instance, that can be used in places like Amazon.
There’s definitely ways to go for mainstream usage, which explains why so few people are using it to make transactions online.
Interestingly, there are a few major retailers accepting bitcoin. Read about a few of them here:
It was back in 2014 that Microsoft began accepting Bitcoin for use in its online Xbox Store. Not a huge surprise there considering Bill Gates is a huge fan. He’s commented on Bitcoin describing it as “better than currency”.
Partnering with Winklevoss Flexa spending app Spedn, Whole Foods now accept bitcoin payments. You can now by all your whole food groceries through the app using your cryptocurrency. Through Spedn, you can also make purchases at Gamestop, Baskin Robbins, Regal Cinemas and Jamba Juice!
Selling furniture and home goods, Overstock not only accepts bitcoin but other kinds of cryptocurrency. The company also owns several other blockchain companies, so you can see why they have an investment in this currency.
The largest hardware store chain in the USA, Home Depot accepts Bitcoin through the Flexa checkout systems that are installed in their stores. This is huge as theoretically, you could build an entire house using cryptocurrency!
A pro internet freedom company used to purchase domain names, they’ve been big supporters of bitcoin and the cryptocurrency community. So of course, they accept it as payment!
Starbucks allows users to make purchases with bitcoin through a partnership with future’s exchange Bakkt. The app has launched so you can now purchase your favorite drinks using Bitcoin at Starbucks!
Despite being the most well-known cryptocurrency, to many it’s still obscure
The new technologies that are the foundations for bitcoin, like blockchain, are not well understood by the majority of people.
Being the most well-known and talked about cryptocurrency is definitely great for Bitcoin — but to many people, Bitcoin is still a mystery. Many older generations are still resistant to an online bank webapp with more traditional banks, let alone making purchases using a currency with a decentralized authority (and no bank at all).
The shroud of mystery around its creator probably hasn’t helped matters. And the new technologies that are the foundations for bitcoin, like blockchain, are not well understood by the majority of people. It’s another reason why it’s not being used on a widespread basis online. It will be interesting to see if a younger generation who are already embracing different forms of banking like Monzo will be more accepting towards Bitcoin and other cryptocurrencies and will begin to use it more when making transactions.
It’s being underutilized by online gaming companies
So many people are now spending their money online through gaming companies. Whether that’s through purchasing games on consoles or buying add-ons. Unfortunately, not all gaming companies accept bitcoin or other cryptocurrencies as legitimate forms of payment, for example, bitcoin and poker continues to have a complex relationship, due to regulations. If Bitcoin could be used in more mainstream services such as online gaming, it could help bolster its utilisation and reputation and be used within a poker webapp. It would be a huge pro to these companies as well as players, as those who use bitcoin could easily make the transaction through the payment system. It could also encourage those who own bitcoin to play on the platforms that accept the currency.
The risk, for some, is too great
Despite the rising popularity of bitcoin, for many big companies such as online retailers, the risk of accepting cryptocurrencies as payment remains too great. There’s a lot of volatility around the currency and many unknowns (like who actually launched it in the first place). From a security perspective, it’s easier to work with traditional banks who have secure processes in place and are a more centralized authority.
Bitcoin is also still viewed suspiciously for much of the financial world, so it makes sense that major online retailers or a delivery webapp wouldn’t want to spend the time and money — and take the risk — putting processes in place that would allow for crypto payments.
The future of cryptocurrency is still an unknown — but as more people invest in bitcoin, retailers will have to begin to explore if it’s an option they’ll want to bring for their payment systems so as not to miss out.