(Image credit: Andre Francois McKenzie)

As Bitcoin enters a new phase of acceptance, maturity, and penetration, the B2B sector should take into account its numerous benefits.

Even with Thriving E-Commerce, Free Market Shows Its Limits

The internet marked a major milestone for humanity. For the first time ever, instead of relying on institutional gatekeepers, the internet made it possible for anyone to access and disseminate information. Soon after, the internet integrated electronic payments with its Web 2.0 evolution.

As Amazon and PayPal spearheaded e-commerce, this brought a new free market era in which any private entity could easily and cheaply set up an online business, or an online interface. However, the likes of Amazon or PayPal still represent payment gateways attached to the traditional banking system, serving as financial infrastructure. Sometimes, this infrastructure can interfere in the operations of the free market.

Although internet censorship in the U.S. is nominally minimal, thanks to the protections of the 1st amendment of the U.S. constitution, Big Tech companies are exerting a heavy hand in stifling competition. Every time a competitor gains traction, shenanigans commence in a coordinated conjunction with major credit card and payment processing companies.

Bitcoin Represents Native E-Commerce

Thanks to the work of Satoshi Nakamoto, his whitepaper Bitcoin: A Peer-to-Peer Electronic Cash System propelled a potential solution to safeguard the free market. Native to the internet, Bitcoin (BTC) doesn’t require central controllers. It is as decentralized as the internet itself. Eleven years after Bitcoin’s launch, maturing to a $270 billion market cap, we can clearly see the value of Bitcoin’s native nature. At the end of October, Iran became the first country to use Bitcoin for imports, under the brunt of crippling US sanctions.

Other nations, from Lebanon to Argentina, are seeing skyrocketing Bitcoin adoption as their fiat money sinks. In the heart of the developed world, the United States, the post-corona pumping of trillions of dollars had also sown doubt in the strength of the fiat currency. Even major banks like JPMorgan Chase admit that Bitcoin is poised to become digital gold, supplanting the traditional function of the physical precious metal as a bulwark against inflation.

Such a view represents a stark 180-shift from 2017 when JPMorgan’s CEO, Jamie Dimon, called Bitcoin a fraud. This gives us a three-year span from “just a fraud code” to Iran accepting Bitcoin on the state level, and PayPal embracing Bitcoin into its payments ecosystem. Which factors contributed to such rapid legitimization of cryptocurrency and what can the B2B sector glean from them?

Comparative 2017-2020 Survey Lays Out Bitcoin’s Upward Sentiment

If you take a glance at your average crypto/blockchain conference, you would come away with the impression that millennials are the driving force behind Bitcoin’s adoption. And that impression would be correct. Thanks to the efforts of a recent Bitcoin adoption survey, collating Bitcoin sentiment from 4,852 participants across 17 nations, it is clear that Bitcoin represents freedom from uncertainty, despite its inherent volatility.

The 2008 financial crisis heavily eroded trust in the banking system. Banking bailouts didn’t help either. However, it took time for Bitcoin to gain credibility as a viable alternative. From 2017 onward we can see a 29% uptick in Bitcoin confidence. Of the total respondents, 47% view Bitcoin as more trustworthy than banks. More importantly, male millennials comprise 54% of that total.

Additionally, nearly 60% of millennials report eagerness to use Bitcoin as either a payment method or as a store of value. Likewise, about 45% of millennials would prefer investing in Bitcoin instead of gold, real estate, or bonds, which marks an increase of 13% from three years ago.

As we look at the data further, we can see that the age of participants is a major obstacle in Bitcoin adoption. After all, this was exemplified by Jamie Dimon when he called Bitcoin a fraud just three years ago when he was 61. Across all questionnaires, the age group above 65 shows the least enthusiasm for the money of the internet. No matter if they are familiar with Bitcoin as a concept, only 3% of this age group shows any willingness to use Bitcoin in any way.

Accordingly, half of the 65+ age group still view Bitcoin as a bubble, which is twice as much as millennials, at only 24%. Still, as the graph below shows, Bitcoin has come a long way in gaining positive perception.

As Bitcoin uncertainty falls, we are also seeing a rising trend of long-term Bitcoin holders – dubbed hodlers – who cling to Bitcoin no matter how much it fluctuates on a monthly basis.

Which Benefits Can B2B Derive from Inevitable Bitcoin Adoption

Although many major online stores already accept Bitcoin as a payment method, these are B2C (business-to-consumer) models. However, the inherent features of cryptocurrency, represented by Bitcoin, still apply to B2B sector:

• Blockchain is virtually unhackable, unless private keys are given to crypto exchanges.
• Saving on banking charges, especially for international exchanges.
• Fewer steps in the chain between giving money and receiving goods.
• Faster transfers because no middle-party (banking or governmental) mediation is involved.
• Expanding reach to the undeveloped world, which is mostly unbanked.
• No risk of chargebacks or fraud because blockchain transactions are immutable.
• Bitcoin duality – both a currency and a digital store of value against inflation.

With that said, cryptocurrency is volatile and subject to government regulation. However, if you take a look at the overall trajectory from Bitcoin’s launch in 2009, it is moving upwards.

Image credit: TradingView

Moreover, Bitcoin shows resilience to events that would have previously dropped its price. For example, both the recent KuCoin exchange hack and BitMEX exchange coming under CFTC investigation, within the same week, did not cause Bitcoin price drop. For comparison, when Mt.Gox exchange was hacked in 2014, Bitcoin dropped by 36%. This shows both Bitcoin’s and users’ maturity.

As far as government regulation goes, every region has its own approach, but largely, cryptocurrency is allowed to flourish. In the end, every B2B operation should calculate the risks and benefits, but to ignore Bitcoin entirely could end up costing you more in the long run.

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Shane Neagle is the Editor in Chief of
The Tokenist, a cryptocurrency publication.