On September 14, the US-based e-commerce bitcoin pioneer blockchain investment arm Overstock announced that retailer customers can now purchase cryptocurrency directly from their website. It became possible after its subsidiary Bitsy began the beta launch of its portfolio and exchange of cryptocurrencies, marking another step in Overstock's rich relationship with Bitcoin.
However, although Overstock has allowed its customers to pay with the cryptocurrency in 2014, the e-commerce sector has yet to experience mass adoption. Meanwhile, Asian players are gathering to push even further.
First brick in the wall: the initial success of Overstock
In January 2014, Overstock.com, an online retailer led by a "scourge of Wall Street" and crypts the passionate Patrick Byrne, became the first big limited company to accept Bitcoin. As Byrne recalls in an interview with Business Insider:
"We were the first ones, the biggest company that accepted Bitcoin was therefore a $ 800,000 restaurant in Western Australia. take it – we were $ 1.4 billion, so I like to think that we saved this community for about five years in their cycle of adoption. "
Curiously, the pioneering transition of Bitcoin's integration into traditional e-commerce has been rather casual: in December 2013, Byrne mentioned to a journalist that his company could start accepting Bitcoin. "I said it at the top of my head," Byrne admitted later. Immediately after the interview, media around the world started reporting on Overstock's potential move. This prompted Byrne to promptly contact Cryptographic Exchange and the Coinbase wallet, based in San Francisco, and within a few weeks, jointly introduced the Bitcoin payment option on Overstock.com.
The initial gain was worth it. "The implementation is repaid only a hundred times by the press," says Byrne. The cryptocurrency community showed up to show their support: "Bitcoin users have started coming to our site and buying a set of pillows or a bed just to show their support." We have sold only a few hundred thousand in two days after the live. "
It is interesting to note that Overstock's shares recorded a trend that was significantly close to the price of BTC since Byrne became part of the encryption. For example, Overstock shares increased fourfold between July and December 2017, when Bitcoin has grown more than seven times and ended the year with an approximate 200% gain. However, this Bitcoin dependency worked both ways for the company. In September, when Byrne had to sell 10 percent of its capital in the company in order to reinvest the proceeds into two investment projects and meet tax obligations, he wrote in a letter to investors:
"I am disappointed when the deadline arrived for my sales in the quarter, the stock had collapsed (unfortunately I noticed that in the last 180 days the correlation between the daily movements of OSTK and Bitcoin was of 85.5%, and again we warn people: we have not significant holdings of Bitcoin). "
However, Byrne continues to rely on cryptocurrency and blockchain in its affairs. Most of the projects related to the crypt are made by the venture capital company Medici Ventures. In 2014, Overstock was set up to use the company's money to invest in blockchain projects. Another subsidiary of blockchain Overstock, tZERO, plans to launch an ICO trading platform. It has already secured major institutional investments from the Hong Kong-based private equity firm, GSR Capital.
More recently, in September, Medici Ventures announced that his investment choice, Bitsy, had begun a limited launch of its portfolio and exchange of cryptocurrencies. Thanks to the new integration, customers of Overstock.com have received the option to purchase Bitcoin directly from the website.
"The integration with Bitsy will allow Overstock to take the next step in its journey in cryptocurrency allowing the company to offer Bitcoin for sale directly from the retail site, "Byrne said in the press release
First wave: Shopify, Expedia and other businesses in the United States
Even before Overstock, c & # 39; they were small online retailers who pioneered cryptography. In 2013, an e-commerce platform based in Canada for online stores and retail store systems called Shopify announced a Bitcoin payment option for its vendors. Back then it had a base of over 70,000 online stores.
Introduced through a collaboration with the BitPay service, the function could be activated by contacting the Shopify team. BitPay is a global Bitcoin payment service provider based in Atlanta. It was founded in May 2011 to provide mobile checkout services to companies that wanted to accept Bitcoin.
"Due to the fact that it is a very new feature and not something that we are ready to launch in all stores, again, you will need to contact me for it, and I may want to follow your feedback with you after using it for a bit, but it works, "wrote his representative Brian Alkerton on November 9, 2013.
In July 2014, Shopify expanded its cryptographic integration by announcing a partnership with Coinbase:" Coinbase offers a & # 39; Two-click verification experience and simple reimbursements that make accepting Bitcoin payments easy and cost-effective. Currently all Shopify merchants can use Coinbase to accept Bitcoin and anyone with a US bank account can convert their Bitcoins into USD. "
Users could now choose between the two service providers, which offered slightly different pricing models: BitPay would have to pay a commission of 1% on occasional sales and a zero quota for monthly subscribers at the time, while Coinbase applied zero standard transaction fees on up to $ 1 million in processing.
In addition, the Shopify website states that "unlike credit card processing, Bitcoin payments have low or no fees", while fraud and chargebacks are presumably non-existent due to the nature of the blockchain. In addition, e-commerce platforms list fast international payments and no compliance with Payment Card Industry (PSI) as other advantages in using cryptocurrencies on their platform. Shopify has not issued any statistics on how often cryptocurrencies are used in their transactions. However, in 2014, after the first full year with encrypted payment option, it would have earned $ 105 million in revenue, twice the previous year
In November 2013, the Calabas based company CheapAir.com is became the first online travel agency in the world to accept Bitcoin as a form of payment for airline tickets. To present the option, CheapAir.com has partnered with Coinbase.
"Bitcoin is really easy, you can do it in two clicks, it's a much easier way to pay and it's also a lot safer," said CEO Jeff Klee in an interview with Fox.
When he answers his company worried about the volatility of Bitcoin, Klee claims to feel "rather isolated" ":" Airlines do not [accept] still Bitcoin, so we have to pay them in US dollars. When the sale arrives, we take the Bitcoins, [and] we exchange them almost immediately. "
In addition, the CEO of Cheapair.com pointed out that Bitcoin could make the transaction between the company and the customers cheaper, even if by their end:" Consumers do not know it, but c & # 39; a cost of three per cent incorporated in everything you buy. Bitcoin does not have those. Transaction fees are much lower. "
In February 2014, the travel agency added the option to pay hotels with the cryptocurrency, which was also the first for the industry.
Relatively early, one Cheapair.com's competitors followed his move: In June 2014, Expedia, a travel booking website owned by Expedia Group based in the United States, joined the encrypted groups of companies announcing the acceptance of Bitcoin as a form of payment for hotel bookings, also through a partnership with Coinbase.
BitPay vs. Coinbase
Therefore, US retailers who have chosen to support Bitcoin have worked with Coinbase or BitPay. specific advantages and disadvantages.
In 2017, BitPay reported that it processed more than $ 1 billion in Bitcoin payments. "We have already increased our dollar payments by 328% year-on-year since 2016," he said. p rocessore. "Overall, BitPay traders receive $ 110 million in Bitcoin payments a month."
In order to increase the reach and popularity of application, BitPay announced support for Bitcoin Cash (BCH) in December 2017. A couple of weeks later, the company confused the Crypto community: in First, BitPay announced that it would increase the minimum transaction amount to $ 100. However, only two days later, the company reversed, returning the value to $ 5.
In February 2018, a couple of years after protecting its first customers among online retailers, Coinbase has announced its further expansion into the e-commerce world: The exchange and wallet service has opened Coinbase Commerce, a service with goal of assisting more online retailers. It is reported that the new service could be integrated into a merchant's payment flow or added as a payment option on an e-commerce platform. In addition, it supports Bitcoin, Bitcoin Cash, Ethereum and Litecoin. The company announced in the press release:
"Our mission in Coinbase is to create an open financial system, so we designed this solution to serve traders all over the world, unlike the previous commercial products we offered, Coinbase Commerce is not a hosted service, so merchants have full control over their digital currency. "
More or less during the same period, Coinbase has updated its policy, suspending" custodial "solutions for merchants. Immediately after the announcement, Cheapair.com CEO Jeff Klee issued an open letter to customers, where he said the new policy would make it harder to accept BTC.
"Our intention at this point is to use BitPay as a processor [now] We have had a great deal of experience with them so far and our integration is largely complete, but our only concern is that Bitpay does not support" Non-payment protocol portfolios "[wallets that aren’t BIP-70 compliant] So if you do not have a compatible portfolio, you should get one and use it as an intermediary step for your Bitcoin payment," Klee wrote.
Interestingly, the Coinbase move could also be the reason Expedia stopped quietly accepting Bitcoin about June 10 (Expedia confirmed to Cointelegraph that their business has stopped accepting Bitcoin.
Chinese approach: Blockchain on Bitcoin
Chinese online retailers have been more cautious in interacting with cryptocurrencies, focusing instead on their core technology, blockchain, which echoes the policy of local government
So, in 2016, to a conference in Shanghai, Alipay – an online payment platform of the Chinese e-commerce titan Alibaba – announced that it could develop a blockchain-based cloud services platform.
"The use of blockchain will grow with the records of the transactions stored in it, "said Alibaba group vice president Gao Hongbing.
In Ma In 2018, the founder of Alibaba Jack Ma has he outlined the importance of the blockchain, emphasizing that his team "does not care" of Bitcoin.
In the same speech, Ma claimed to strongly believe in the potential of the Blockchain to address the privacy and data security issues for society at all levels – governments, companies and individuals – in a 'big' era. date. He also stressed that security is a top priority for the e-commerce conglomerate.
In March, the concern came with more blockchain related news: Alibaba's T-Mall e-commerce platform began to adopt technology for its cross-border supply chain through a partnership with the logistics company Cainiao, according to the local Xinhua news agency. Reportedly, the collaboration will use blockchain to track the country of origin of the goods, shipping method, port of arrival and details of customs relations.
According to data published at the end of August by the Chinese media daily, Alibaba has reached the top of a list that classifies entities based on the number of blockchain patents filed to date; the e-commerce conglomerate has stored a staggering 90 blockchain patents, surpassing even IBM.
But Alibaba is not the only outlet for Chinese e-commerce to adopt blockchain. In August 2018, another local distribution giant, JD.com, introduced its blockchain plans, as it revealed its new Blockchain-as-a-Service (BaaS) platform – dubbed the JD Blockchain Open Platform. The new tool aims to enable companies to build, host and implement blockchain solutions without having to develop technology from scratch. JD outlined a number of potential use cases for the platform:
"Technology can help companies simplify operational procedures such as tracking and tracking the movement of goods and charitable donations, certification of authenticity, evaluation of property, transactional transactions, digital author rights and improve
The future belongs to international giants who are not afraid to intervene
While US e-commerce companies seem to be late after a promising start – with a number of players completely abandoning alternative payment options – international players seem to be much more ambitious.
At the end of August 2018, Daniel Shin, the founder of Ticket Monster (TMON), a major market for e- Korean mobile commerce boasting a total turnover of $ 4 billion, has revealed that it has raised $ 32 million from a number of investors – including Binance, OKEx and Huobi Capital laboratories – to build a stablecoin named Terra. According to Terra's white paper, the protocol maintains a "stability reserve" composed of user deposits with varying rewards to ensure that the system is too reserved.
As Shin explained to TechCrunch, Terra's goal is to offer a new payment option that would bypass existing payment networks like Visa, which take their cuts in the process. The use of the token will be stimulated through special discounts.
It is interesting to note that Terra is ready for a jump, provided that the group that supports the stablecoin, Terra Alliance, includes big e-commerce players like Woowa Brothers, Qoo10, Carousell, Pomelo and TIKI – combined, these companies they produce about 25 billion dollars of sales. The token would be expendable in each of these services.
Similarly, Japan's largest e-commerce company Rakuten, with a market capitalization of over $ 12.5 billion, has announced plans to launch its cryptocurrency as part of a new blockchain-based loyalty program. 39; beginning of this year.
Calling the Rakuten coin, the resource will presumably serve as a "currency without borders", emphasizing Rakuten's vision of differentiating himself from his online retail rivals, such as Amazon, Alibaba or eBay. The CEO of the company Hiroshi Mikitani has elaborated:
"Basically, our concept is to recreate the network of retailers and dealers.We do not want to disconnect [them from their customers] but to function as a catalyst.This is our philosophy, how to strengthen the company not only provide more convenience. "
In addition, at the end of August 2018, Rakuten revealed a 265 million yen ($ 2.4 million) agreement for the purchase of national encryption. All bitcoins. The purchase will be reported on October 1st.
According to Rakuten, "has considered entry into the trade of cryptocurrencies" because it considers "the role of cryptocurrency-based payments in e-commerce, in offline sales and in p2p [peer-to-peer] payments will grow in the future. "
While most crypto-friendly online retailers come from Asia, Latin America is pushing for mass adoption: Via Varejo, one of the largest retailers of consumer electronics and home appliances in Brazil, partnered with the Airfox blockchain payment service. Airfox is a mobile financial service launched in February 2018 in Boston, MA. Designed for emerging economies, it allows you to make payments in fiat and blockchain via its coin AirToken (AIR), a token based on ERC-20.
Via Varejo is now integrating Airfox's digital banking platform on its e-commerce platforms, as well as nearly 1,000 of its offline stores. Customers will be able to purchase goods at Casa Bahia by paying directly through Airfox, or they will be able to use microloans provided by the retail group.
The press release highlights the importance of collaboration for the mass adoption of payment blockchain services, allowing the platform to "extend its mobile digital wallet to the national customer base in Via Varejo and guide the company." mainstream adoption. "