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A guide to e-commerce cryptocurrency: What you need to know

The following is a guest post by Cath Schwartz.

The rise of cryptocurrency is undeniable. Despite its volatile market, we’ve recently seen wide adoption of this digital currency. Many would say that crypto is the future of money.

The global crypto population increased by a whopping 178% in 2021. It has grown from 106 million in January to 295 million in December of last year. Here’s the catch: the number of crypto owners might hit one billion by the end of this year.

Does this mean that the e-commerce industry is already using crypto? The answer is yes.

This page is a practical guide to e-commerce cryptocurrency.

What is cryptocurrency?

Simply put, cryptocurrency is a form of virtual currency. This digital asset gets distributed across a large number of computers. However, people cannot counterfeit it due to cryptography.

As an encrypted digital payment, crypto can be used and exchanged among users. That’s where e-commerce cryptocurrency comes in.

How crypto works

Cryptocurrency works on a decentralized network using blockchain technology. What does this mean? Consider two things:

  • Decentralization: cryptocurrency is decentralized since no central authority issues and controls it. It means governments cannot regulate this virtual currency and interfere with its transactions.
  • Blockchain: This technology entails a distributed ledger in a different network of computers. It essentially has a set of connected blocks. Each contains a series of transactions verified by each network member.

In addition, understand that cryptocurrencies can either be:

  • Mined: Cryptocurrency mining entails verifying transactions and recording these on digital ledgers.
  • Purchased: You can buy and sell crypto from exchanges that work like a broker.

Common cryptocurrencies in the market

Let’s take a look at the most common cryptocurrencies today:

  • Bitcoin (BTC): It’s the original and most popular cryptocurrency worldwide. It was introduced to the public in 2009 by an anonymous developer under the pseudonym of Satoshi Nakamoto. It has led to the inception of other cryptocurrencies.
  • Ethereum (ETH): The second most popular cryptocurrency globally. Ethereum, a blockchain-based software platform, was developed in 2015 with its own crypto, ETH. Unlike BTC, it’s both a platform and a cryptocurrency.
  • Litecoin: It’s also one of the pioneers in the crypto market. Launched in 2011, it followed the footsteps of BTC as the ‘lite’ version. But unlike BTC, it can produce its coins at scale.

What is e-commerce cryptocurrency?

By definition, e-commerce cryptocurrency is a digital currency used for online business transactions. This means consumers use crypto like bitcoin to pay for goods or items purchased from online stores. Yes, cryptocurrency has already penetrated the e-commerce industry.

Recently, we’ve seen the gradual adoption of cryptocurrency in e-commerce. Online businesses have started accepting digital currencies as a form of payment. Cryptocurrency offers e-commerce merchants some benefits, from ease to convenience to security. However, there is more to these advantages than meets the eye.

Learn more about e-commerce cryptocurrency in the next section.

Cryptocurrency for consumer payments

Here’s how consumers can use crypto for e-commerce transactions:

  • Payments via personal wallets: E-commerce businesses accept crypto directly without any intermediaries. They allow consumers to have digital wallets with virtual assets in them. Then, consumers can use their crypto money to purchase products online.
  • Payments via third parties: Online businesses use third-party services (BitPay and Coinbase) for crypto transactions. Consumers use their crypto money to buy products through these payment gateways.

Companies using e-commerce crypto:

Below are some companies that have started using e-commerce cryptocurrencies:

  • Starbucks employs Bakkt, allowing its members to convert crypto into cash using their SB cards.
  • Microsoft accepts bitcoin payments for purchasing Windows games, movies, and app licenses.
  • Lush accepts bitcoin payments for online purchases, given its partnership with

Potential benefits and drawbacks of e-commerce cryptocurrency

Now, let’s look at the potential benefits and drawbacks of using e-commerce crypto. To weigh the pros and cons, consider the following:


  • Market Growth: Individuals and businesses can no longer ignore crypto’s market growth. E-commerce businesses should capitalize on crypto’s expansion as early as now. Who knows? It might be the future money.
  • Fast Transactions: E-commerce crypto transactions go through and get immediately posted. E-commerce merchants don’t need to wait for bank processing. They don’t need to seek approval from a central authority. That can provide you with an immediate return on investment (ROI).
  • Zero-to-minimal Fees: Payments via digital wallets don’t incur a transaction fee. But if it’s payment via a third party, there will be a minimal charge. Consumers will spend less when using e-commerce crypto for purchasing.
  • Improved UX: Offering consumers crypto as a payment option improves the user experience. Such payment flexibility will reduce your cart abandonment rate. It will go as far as increasing your sales conversion.
  • Enhanced Security: Cryptocurrency is encrypted, operating in blockchain technology. For this reason, consumers can expect full security. Their digital assets cannot get counterfeited at all.


  • Volatile Pricing: Cryptocurrency is negatively known for its volatility. Its market value is unpredictable and can significantly go up and down. Why is this so? No official fiat currency backs crypto.
  • Cash Flow Problems: The public doesn’t fully recognize cryptocurrency as having real value. E-commerce merchants accepting crypto as consumer payments may keep them as digital assets, which can make up your free cash flow. However, the problem starts when they need to use the money for business expenditures almost immediately.
  • Trust Issues: The global media puts crypto, albeit its market growth, in a negative light. That’s why e-commerce merchants are hesitant to allow this payment method. And so are the consumers, who are wary of using this digital currency.
  • Sustainability Issues: Cryptocurrency mining requires massive energy for mining crypto coins. Per CNBC, the energy use for crypto mining is so high. It consumes more electricity than the Netherlands’ yearly consumption. Thus, this has negative repercussions on the global quest for sustainability.
Various crypto coins

The bottom line

The use of cryptocurrency has become increasingly popular worldwide, which applies to the e-commerce industry.

As an online business owner, consider offering crypto as one of your payment options. But as a consumer, consider using this virtual currency for your online purchase. However, understand what it is and how it works. More importantly, weigh the pros and cons discussed above.

With these in mind, you’ll have an informed decision. Capitalize on e-commerce cryptocurrency. It might be the future of money.

  • Catherine Schwartz

    Catherine is a personal finance writer covering investing, credit, debt, and banking topics to help people achieve financial freedom. She enjoys writing well-researched content with expert tips and valuable pieces of advice.