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Numerous investors, companies and startups have joined the cryptocurrency bandwagon in recent years.
What is cryptocurrency? And what does this mean for eCommerce merchants and consumers? In this blog post, we’ll tell you everything you need to know about the basics of cryptocurrency.
A blockchain is a computer file for data storage.
In technical terms, it is an open digital ledger or database that facilitates the process of tracking assets and recording transactions in a network of computer systems.
Every block in the chain records transactions. When a transaction takes place within the blockchain, a record of this transaction is placed on the participants’ ledger.
The data contained on a blockchain is distributed and duplicated across computers, making it decentralised.
Bitcoin is a decentralised digital currency.
It enables users to anonymously transfer bitcoins across the world with no exchange rates or banking intermediaries to slow down the process and take their own cut.
Bitcoin is a popular type of cryptocurrency, but it’s not the only one. There are many other cryptocurrency networks powered by blockchain technology.
Here are some of the advantages and disadvantages of bitcoin technology.
Pros
Cons
Much like bitcoin, altcoin is also a type of cryptocurrency.
Bitcoin’s popularity is attributed to the fact that it is the first crypto currency. In later years, alternative cryptocurrencies or altcoins were developed for the blockchain. The first altcoin called “Namecoin” was developed in 2011, and it was made based on the Bitcoin code.
Following that, several hundreds of altcoins have been developed for the blockchain. Each altcoin usually has its own mechanism and rules.
Cryptocurrency enables retailers to expand their customer base.
In the future, it may enable merchants to sell without adjusting for currencies and fiats based on a consumer’s country of origin or location. Because it is based in the blockchain, cryptocurrencies have enhanced security which reduces the potential for fraud.
More importantly, cryptocurrencies enable faster bank transactions. There’s no need to wait for a payment to be processed, you can receive payment and ship orders as soon as possible.
Hopefully, this introduction will pique your interest in the world of blockchain and cryptocurrencies.
Chris has been at the forefront of eCommerce and a pioneer of online retailing since the early 00s. A 5-time Drapers Award winner, Chris has extensive experience in developing fashion brands online.
Chris founded Cake in 2016. Based in Birmingham, with offices nationwide, Cake specialises in helping fashion brands understand their market online and then helps to develop appropriate strategical direction to achieve their plan, all backed by his 20 years of operating in the retail market.
