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Performance of cryptocurrencies - e-commerce
With Bitcoin reaching new all-time highs and Ethereum’s recent ETH 2.0 upgrade, the general hype around cryptocurrencies has reached a new peak.

But is this the future of commerce as we know it? It depends on who you ask. Prominent leaders from the spheres of finance, economics, politics and business have publicly referred to cryptocurrencies as anything from “rat poison” or “worthless junk” to hailing Bitcoin as “the new digital gold” and Ethereum “the digital oil” to fuel global economic growth over the next decades. However, if you look beyond the ebb and flow of sentiment and the bull and bear markets, you will find the “blockchain”: The protocols and revolutionary technology that underpins not just cryptocurrencies, but any form of digital transactions, data, digital assets and more.

Much in the same way that understanding the inner workings of a computer, the internet or a smartphone is not a prerequisite for using them or seeing (in hindsight) the tremendous impact they’ve had, the goal of this article is not to explain what the blockchain is (for that please see the 1000s of articles and videos online), but to discuss one of the many ways that it will impact our daily lives in the decades to come.

B-yond Imagination

Let’s consider the term b-commerce for blockchain commerce.

Blockchain technology and cryptocurrencies provide completely new ways of not just settling transactions but also doing business and generating profits. In the face of Bitcoin, Ethereum and the thousands of other cryptocurrencies, governments and central banks are rushing to create their own Central Bank Digital Currencies (crypto version of the centralised ‘fiat’ currency we currently have). China’s CBDC is leading the way, with strong rumours indicating that the US is scrambling to catch up.

In these next years, we will witness the advent of a completely new breed of companies, value chains, business models, products, services and economic models that never existed before, because they were either not possible or because we simply could not even imagine them. Till now.

Some of these new economic models are abstract and complex, such as The Commons Stack’s use of token bonding curves to establish “commons-based micro-economies that sustain public goods.” But blockchain will also fundamentally transform the more basic, everyday aspects of our lives like voting, paying taxes and even our identity. Microsoft’s new digital identity uses a public, permission-less, decentralised DID (digital identity) overlay network that runs on top of Bitcoin and seeks to “provide a new way of owning our personal data.”

Blockchain, sometimes referred to as Internet 3.0, is doing for money and finance what the original internet did for information.

Blockchain Unchained

These companies, businesses and economic models will be born out of blockchain’s many advantages and capacity to automatically settle transactions (aka programmable money) between any two parties, in real-time, ubiquitously, transparently and 100% verifiably.

Blockchain, sometimes referred to as Internet 3.0, is doing for money and finance what the original internet did for information.

B-commerce will start by completely revolutionising existing industries in simple ways that we can already imagine, such as insurance claims adjusting or direct payments – like Facebook’s so far unsuccessful stable coin project. Where things start going exponential is in the many ways that we have yet to imagine!

With Libra, Facebook tried to be the first to turn the global financial system on its head, but instead had to settle for a more conventional approach of yet another slightly more tech-advanced way of doing traditional e-commerce finance, and launched WhatsApp payments in Brazil in June of last year.

This evolution (like most throughout history) will not be driven by today’s rock-star-like entrepreneurs; their companies draw too much attention and commercial/political interests tie them down in infinite red tape. It will be led by obscure developers and entrepreneurs currently laying the blockchain foundations for what is to come.

Bridging the e-commerce Gap

The peak of e-commerce was reached sometime in the mid to late 2010s after it spawned the sharing economy. Today we can easily stream music and films from a single massive shared library of titles, or turn our spare bedroom (soon even our car) into a viable revenue stream.

The sharing economy and the flood of revolutionary business models (yet to come) have far more potential, but the e-commerce system’s latency issues and disarticulation from the existing financial system falls tremendously short at the point of purchase. Consumers have grown accustomed to instant real-time service delivery and consumption at the click of a button, and the e-commerce payment part of the user experience cannot match this because it lacks the instant, anytime/anywhere, zero-marginal-cost capability of settling the transaction.

Aside from its clear lack of capabilities, one quick look “under the hood” of e-commerce will reveal a well-documented list of problems and limitations such as chargebacks, credit card fraud, data disclosure, payment friction and micropayment limits, just to name a few. This renders e-commerce obsolete and unable to take us any further. Consider how easy it is to consume a product/service on your desktop or smartphone vs. how hard (despite all the options) and cumbersome it can be to pay for it!

One of the latest business models from the b-commerce world is the idea of real-time finance, fund or money streaming: It’s the ability to stream a payment in minuscule incremental parts of a dollar each second (in this case DAI, a stablecoin pegged to USD), which is now possible with Dapps (decentralized apps) like Sablier.

graph showing the future of real-time finance - e-commerce

New Face on the Block 

Blockchain technology is not yet mainstream, but thousands of unknown developers are currently laying the groundwork and foundations for a complete overhaul of the global financial system, the infrastructure and rails on which b-commerce products, services and companies will run. This infrastructure is already very robust, but still hard to access and understand for the everyday consumer. The spark that seems to be missing is an easy GUI (graphic user interface) entry point: a crypto wallet solution that allows everyone to open an account, get crypto and start using it. The only question now is, who will be the crypto Hotmail that does for b-commerce what Hotmail did for e-commerce in 1996?

Even though it might be impossible to imagine the new types of products and services, the exponential potential of the ensuing b-commerce era will most certainly result in an orders-of-magnitude larger growth and may leave companies like today’s FAANG giants (Facebook, Amazon, Apple, Netflix, Google) in the rearview mirror.


The content of any publication on this website is for informational purposes only.

About the author

Since 2012 Rafa has launched 10+ fintech apps, founded & built a platform that connects all forms of payments in Mexico to one app. For 14 years, 6 at McKinsey & Co., he has advised startups, SMEs, Fortune 100s, governments, International organisations and NGOs, on corporate & Go-To-Market strategy, business development and FinTech product development. He holds an Electrical Engineering degree from UAG MX, and an MBA from HEC Genève. Rafa is passionate about everything fintech, and spends summers wakesurfing on the lake, and winters in the mountains snowboarding. He likes to play basketball and tennis in between.

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