The Development History and Future Outlook of Crypto Assets in the E-commerce Field

The prospects of Crypto Assets as a payment method for e-commerce have always attracted attention. Theoretically, its characteristics such as irreversible transactions, low fees, and instant cross-border payments seem to effectively address the issues of traditional payment systems. However, in reality, the application of Crypto Assets in the e-commerce sector has progressed slowly. In recent years, as the market has gradually matured and technology has continuously advanced, this situation has begun to change. This article will delve into the application history of Crypto Assets in the e-commerce field, from the gap between early expectations and reality, to the importance of network effects, and finally to the new opportunities brought by stablecoins, revealing the core logic behind it and future development directions.

The Gap Between Early Expectations and Reality: Why Theoretical Advantages Have Not Translated Into Market Acceptance?

Around 2014, as the price of Bitcoin surged significantly for the first time at the end of 2013, Crypto Assets began to enter the public eye. At that time, the industry was generally optimistic that e-commerce would become the breakthrough point for the adoption of Crypto Assets. In particular, small and medium-sized e-commerce merchants were believed to be the first to adopt this new payment method, as the "chargeback risk" in traditional payment systems had always been a pain point for them. For example, customers might request their credit card companies to reverse payments for various reasons, and merchants often had to bear the entire loss. The irreversible nature of Crypto Assets could theoretically address this issue fundamentally.

In addition, the difficulties of cross-border payments also provide opportunities for Crypto Assets. Traditional bank transfer fees are high and the transfer time is long; while the cross-border transfer fees of Crypto Assets such as Bitcoin are fixed and low, with a very short transfer time. For e-commerce merchants relying on global supply chains, this seems like an ideal choice to reduce costs and increase efficiency.

However, these theoretical advantages have not been translated into practical applications. Although a few large enterprises have attempted to integrate Bitcoin payments, the user adoption rate is extremely low. More critically, the technological limitations of Bitcoin itself have become a fatal shortcoming: in 2017, the Bitcoin scaling controversy escalated, and transaction fees skyrocketed, making it uneconomical to purchase small-value goods. During this phase, the attempts of Crypto Assets in the e-commerce sector appeared more like a pioneering experiment rather than a scaled application.

Insights from Network Effects: Understanding the Essence of Currency Substitution through the Lens of Prison Economy

The early setbacks of crypto assets in the e-commerce sector actually reflect the underlying logic of currency substitution: for a new currency to replace the existing system, it must break through the network effects of the old currency. This can be inspired by the case of the prison economy in the United States.

Research has found that ramen has replaced tobacco as the primary "currency equivalent" in American prisons. For a long time, tobacco has been the "hard currency" in prisons due to its characteristics. The rise of ramen stems from a "food crisis" caused by long-term funding shortages in the prison system: inmates generally face insufficient caloric intake, and ramen, as a high-energy, easy-to-store food, has practical value that tobacco cannot replace. This case reveals a key rule: network effects can only be broken when new currency meets core needs that old currency cannot cover.

Returning to the competition between Crypto Assets and traditional payment systems: While Bitcoin has solved some problems, these advantages have not yet reached a disruptive level. Traditional payment systems have developed strong network effects through long-term accumulation, with both consumers and merchants accustomed to the existing model. The complexity, price volatility, and technological costs of Crypto Assets further weaken the adoption motivation for merchants.

Turning Point: Case Studies of Some Countries - The Path to the Popularization of Crypto Assets

In recent years, the application of Crypto Assets in the e-commerce sector has finally made substantial progress, with some countries' cases being the most representative. Although the significant drop in Crypto Assets prices at the beginning of 2018 raised market concerns, these countries still promoted the implementation of Crypto Assets payments in mainstream retail scenarios. For example, some large e-commerce platforms announced support for Bitcoin payments, covering their e-commerce platforms, travel services, and even mobile operator businesses; the largest convenience store chain in a certain country has also integrated Bitcoin and Ethereum payments, allowing consumers to purchase everyday goods with Crypto Assets.

The commonality among these cases is that the popularity of Crypto Assets is not actively driven by merchants, but rather a result of a user base leading the way. These countries are among the regions with the highest Crypto Assets holding rates globally. When a large number of users already hold Crypto Assets, it becomes a natural choice for merchants to integrate payment channels. This confirms the logic of "users come first, then merchants": only when the group of Crypto Assets holders reaches a certain scale do merchants have the incentive to bear the integration costs; and the motivation for users to hold Crypto Assets often initially stems from investment needs rather than payment needs.

Stablecoins: The Key to Solving Volatility Issues or a New Centralization Trap?

Although some markets show breakthroughs in the application of Crypto Assets, price volatility remains the biggest obstacle to their becoming mainstream payment tools. The uncertainty of prices makes it difficult for both consumers and merchants to regard Crypto Assets as a reliable measure of value.

The core solution to this problem is believed to be stablecoins - a type of Crypto Assets pegged to fiat currency. Theoretically, stablecoins can balance the technological advantages of Crypto Assets with the price stability of fiat currency. However, in reality, the development of stablecoins still faces two major challenges:

1. The contradiction between centralization and decentralization: Currently, mainstream stablecoins adopt a fiat currency collateral model, which can ensure price stability but reintroduces centralization risks.

2. Technical Bottlenecks of Decentralized Stablecoins: Algorithmic stablecoins automatically adjust supply and demand through smart contracts to maintain price stability, but they rely on over-collateralization and may face risks under extreme market volatility.

An innovative concept is a decentralized stablecoin endorsed by a network of retailers. This model may balance decentralization and practicality, but it requires the establishment of broad merchant consensus and user trust, which is difficult to achieve in the short term.

Future Outlook: Organic Growth and Diverse Coexistence

The popularization of Crypto Assets in the e-commerce sector may be a gradual process. As the user base holding Crypto Assets expands, the incentive for merchants to integrate will naturally increase; at the same time, the maturity of stablecoin technology will gradually address the volatility issue.

Ultimately, Crypto Assets and traditional payment systems may form a pattern of diverse coexistence: stablecoins for daily small payments, mainstream Crypto Assets as tools for large cross-border transactions, while traditional payment methods continue to serve risk-averse users. The future payment ecosystem will also differentiate due to varying scenario demands.

The pace of technological development never stops. The history of the Internet tells us that when infrastructure resonates with user habits, the speed of change will far exceed expectations. The true explosion of Crypto Assets in the e-commerce sector may just be a key application away - and the maturity of stablecoins could be that important turning point.