The digital payment method is operated by a decentralized network of computers from all parts of the world; unlike electronic payment networks like Mastercard and Visa, bitcoin uses heavy-duty encryption technologies that allow the global system to keep track of its transactions. Albeit the de facto standard, bitcoin is only one of more than 1,000 cryptocurrencies on the internet, from Ethereum and Litecoin to Monero and Zcash.
In fact, according to bitcoin payment service provider BitPay, more than 100,000 merchants worldwide accept the currency. While it may pose a challenge to find major shopping destinations that accept it as a direct payment for everyday purchases, retailers and industry analysts are keeping a close eye on these cryptocurrencies — and for good reason.
A longtime proponent of crypto, home goods e-tailer Overstock.com has brought in as much as $5 million per year from the currency, as reported by Bloomberg last July. Tech giant Microsoft, travel booking agency Expedia and electronics retailer Newegg also accept bitcoin as a payment method — as well as eGifter.com, which allows shoppers to pay for gift cards to Gap, JCPenney and other chains in bitcoin.
“It’s definitely still nascent in the mainstream area, but we are starting to see more firms accepting it, which implies the trend has legs,” said Michael Diamond, director of industry analysis for commercial technology at The NPD Group Inc. “If the big guys are exploring and starting to offer it, more customers are asking for and demanding it, and retailers do not want to get left out in the cold, especially if they have a global presence.”
That includes e-commerce giant Amazon. Even though the company currently doesn’t accept cryptocurrency as a form of payment, it has registered three internet domain names linked to the digital exchange: amazoncryptocurrency.com, amazoncryptocurrencies.com and amazonethereum.com. Should a retail behemoth like Amazon or Walmart — which has teamed up with IBM on applying blockchain technology to improve its food supply chain — were to begin accepting cryptocurrencies, it could potentially lead to a substantial increase in their liquidity.
To Diamond, cryptocurrency’s impact on retail might even be compared to how mobile applications like Uber and Lyft have disrupted the transportation industry. “Once you try it and see that it works, coupled with cost savings, you instantly become a fan,” he said.
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