The Exploration of Crypto Assets in the E-commerce Field: From Ideal to Reality

The prospects of Crypto Assets as the main payment method in e-commerce have attracted considerable attention. Theoretically, their characteristics such as irreversible transactions, low fees, and cross-border instant payments seem to perfectly address the pain points of traditional payment systems. However, in practice, the adoption of Crypto Assets in the e-commerce sector has been relatively slow. In recent years, as the market matures and technology continues to advance, this situation has begun to change. This article will delve into the application history of Crypto Assets in the e-commerce field, analyzing the gap between early expectations and reality, the importance of network effects, and the new opportunities brought by stablecoins, revealing the core logic behind it and the future development direction.

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

Around 2014, with Bitcoin's first price surge at the end of 2013 (although relatively smaller compared to the scale of 2017), Crypto Assets first entered the public eye. At that time, there was widespread optimism in the industry that e-commerce would become the breakthrough for the popularization of Crypto Assets. In particular, small and medium-sized e-commerce merchants were believed to be the first to adopt this emerging payment method—after all, the "chargeback risk" in traditional payment systems had always been a major concern for them. For example, customers might request credit card companies to reverse payments for reasons such as "goods not received" or "fraudulent transactions," while merchants often had to bear the full loss. The irreversible transaction characteristic of Crypto Assets was supposed to fundamentally resolve this issue.

In addition, the pain points of cross-border payments also provide opportunities for Crypto Assets. Traditional bank transfer fees can be as high as 3%-5%, and the time to receive funds can take 3-7 days; whereas the cross-border transfer fees for Bitcoin and other Crypto Assets are fixed (only a few cents in the early days), and the time to receive funds is only about 10 minutes. For e-commerce merchants who rely on global supply chains, this seems to be an ideal choice for reducing costs and improving efficiency.

However, the theoretical advantages have not translated into practical applications. Although a few large enterprises have attempted to integrate Bitcoin payments, the user adoption rate remains extremely low. For instance, a well-known online travel platform announced it would accept Bitcoin in 2014, but just two years later, it terminated the service due to "insufficient transaction volume." More critically, the technical limitations of Bitcoin itself became a fatal shortcoming: in 2017, the Bitcoin scalability debate escalated, and transaction fees soared to $20 per transaction, making it uneconomical to purchase items below $100—paying $20 in fees for a cup of coffee is clearly unreasonable. During this phase, attempts to use Crypto Assets in the e-commerce sector resembled pioneering experiments rather than scalable applications.

Insights from Network Effects: Understanding the Essence of Currency Substitution through the "Ramen Economics" in American Prisons

The early setbacks of Crypto Assets in the e-commerce sector essentially 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 point can be profoundly inspired by the unique case of the prison economy in the United States.

In 2016, a study found that in American prisons, ramen replaced tobacco as the primary "currency equivalent." For a long time, tobacco has been a hard currency in prisons due to its portability, divisibility, anti-counterfeiting properties, scarcity, and wide acceptance—meeting all the core attributes of currency. The rise of ramen stems from a "food crisis" caused by long-term funding shortages in the American prison system: prisoners generally face insufficient caloric intake, and ramen, being high in energy and easy to store, possesses a "practical value" (calories) that tobacco cannot replace. This case reveals a key principle: only when a new currency can meet core needs that the old currency cannot cover can network effects potentially be broken.

Returning to the competition between Crypto Assets and traditional payment systems: Although Bitcoin addresses the issues of chargebacks and cross-border fees, these advantages have yet to reach a disruptive level. Traditional payment systems have developed strong network effects over decades of accumulation—consumers are accustomed to the security mechanism of "consume first, dispute later," while merchants rely on mature reconciliation and refund processes. The complexity barriers of Crypto Assets (such as private key management, wallet operations), price volatility (daily fluctuations exceeding 10%), and the technical operational costs (node maintenance, security protection) further diminish merchants' motivation. As someone said: "Unless there is a fundamental need as dire as hunger, currency systems will not easily change." Bitcoin's early failure to provide a "must-use" reason naturally made it difficult to shake the existing landscape.

Turning Point: Cases of Japan and South Korea - The "Which Came First, the Chicken or the Egg" of Crypto Assets Popularization

In recent years, the adoption of Crypto Assets in the e-commerce field has finally made substantial progress, with Japan and South Korea being the most representative cases. Despite the significant drop in Crypto Assets prices at the beginning of 2018 causing market concerns, both countries continued to promote the implementation of Crypto Assets payments in mainstream retail scenarios. For example, a major e-commerce giant in Japan announced in 2018 that it supported Bitcoin payments, covering its e-commerce platform, travel services, and even mobile operator businesses; South Korea's largest convenience store chain also integrated Bitcoin and Ethereum payments, allowing consumers to purchase food and daily necessities with Crypto Assets.

The common point of these cases is that the popularity of Crypto Assets is not actively driven by merchants, but rather a result of a user base that comes first. Japan and South Korea are among the countries with the highest rates of Crypto Asset ownership in the world—according to 2018 data, there are about 3 million Crypto Asset holders in Japan (accounting for 2.4% of the total population), and the number of Crypto Asset trading accounts in South Korea exceeds 5 million (accounting for nearly 10% of the total population). When a large number of users already hold Crypto Assets (as investments or asset allocations), merchants integrating payment channels becomes a natural progression—rather than having users convert their Crypto Assets into fiat currency before spending, it is better to directly accept Crypto Assets to enhance conversion rates. This confirms the logic of "users come first, then merchants": only when the holder group of Crypto Assets reaches a certain scale do merchants have the motivation to bear the integration costs; and the motivation for users to hold Crypto Assets initially often stems from investment needs rather than payment needs.

Stablecoins: The Key to Breaking the "Volatility Curse" or a New Centralized Trap?

Despite cases in Japan and South Korea showing breakthroughs of Crypto Assets in specific markets, price volatility remains the biggest obstacle to their becoming mainstream payment tools. Imagine this: if you buy a computer worth $5000 with 1 Bitcoin, and 24 hours later the Bitcoin price drops by 10%, it means you have paid an extra $500; conversely, if the price rises, the merchant faces a loss. This uncertainty makes it difficult for both consumers and merchants to view Crypto Assets as a measure of value.

The core solution to this problem is widely regarded as stablecoins— a type of Crypto Assets that is pegged to fiat currencies (such as the US dollar and Japanese yen). In theory, stablecoins can combine the technological advantages of Crypto Assets (speed, low cost, cross-border) with the price stability of fiat currencies. 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 collateral model: for every stablecoin issued, the issuer must deposit 1 USD in a bank account as reserves. Although this model ensures price stability, it reintroduces centralization risks—users must trust that the issuer maintains sufficient reserves and does not misuse funds. Historically, a well-known stablecoin experienced market panic due to reserve transparency issues, causing its price to temporarily deviate from the 1 USD peg.

2. Technical Bottlenecks of Decentralized Stablecoins

Another approach is algorithmic stablecoins, which automatically adjust supply and demand through smart contracts to maintain price stability, without the need for centralized reserves. However, these stablecoins rely on over-collateralization (for example, using $200 worth of Crypto Assets to collateralize $100 of stablecoins), and may face a "death spiral" during extreme market volatility (price drops trigger liquidations, further exacerbating sell-offs). As of now, no decentralized stablecoin has achieved the scale and stability of fiat-backed stablecoins.

Someone proposed an innovative idea: a decentralized stablecoin backed by a network of retailers. Similar to the banknotes issued by "wildcat banks" in 19th century America, it would be jointly guaranteed by regional merchant alliances, relying on a network of actual goods and services to maintain its value. This model may balance decentralization and practicality, but it requires a broad consensus among merchants 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 will not be an overnight revolution, but rather a process of organic growth. As the user base holding Crypto Assets expands (according to a report by a data analysis company in 2023, the number of global Crypto Assets holders has exceeded 420 million), the motivation for merchants to adopt will naturally increase; at the same time, the maturity of stablecoin technology (whether centralized or decentralized solutions) will gradually address the volatility issue.

Ultimately, Crypto Assets and traditional payment systems may form a diversified coexistence pattern: stablecoins for daily small payments, mainstream Crypto Assets like Bitcoin as tools for cross-border large transactions, while traditional payment methods continue to serve risk-averse users. Just as ramen and tobacco coexist in American prisons—where the former serves as the primary medium of exchange and the latter as a store of value—the future payment ecosystem will also diversify due to different scenario demands.

Technology never waits for the hesitant. The history of the internet tells us that when infrastructure resonates with user habits, the speed of transformation will far exceed expectations. The true explosion of Crypto Assets in the e-commerce field may just be a killer app away — and the maturity of stablecoins could be that critical turning point.