Page 370 - Introduction to Electronic Commerce and Social Commerce

11.7 Digital and Virtual Currencies 357

Figure 11.6 Bitcoin Web wallet (Drawn by D. King)

transactions and addresses are public leaves open the pos- • Support Cross-Border Commerce. Architecturally, Bitcoin
sibility of tying transactions to real-life identity. For this can easily support cross-border transactions simply
reason Bitcoin is often referred to as pseudo-anonymous. because it utilizes the Internet. Also, it’s an open system
• Simplifies Financial Transactions. There are no prerequisites that allows anyone to join regardless of their location.
and no minimum levels required to participate. Transactions In most countries they can operate pretty much with
between parties can transpire without the assistance of impunity largely because of the regulatory confusion
any bank or financial institution. Because transactions are over virtual currencies. However, it is the case that
basically frictionless, fees are held to a minimum. Bitcoin is outlawed in a handful of countries (e.g., Russia)
• Merchant Friendly. For merchants, it’s easy to set up a and is increasingly subject to the regulations governing
payment system without relying on third-party gateways banks and institutions in a number of countries, espe-
or intermediaries. The setup costs are minimal and there cially those dealing with money laundering and financing
are none of the chargebacks associated with cards. terrorism.