GRD Journals- Global Research and Development Journal for Engineering | Volume 4 | Issue 7 | June 2019 ISSN: 2455-5703
Impact of Digital Currency in E-commerce Chandrasekaran G Department of MCA Mepco Schlenk Engineering College, India Neethidevan V Department of MCA Mepco Schlenk Engineering College, India
Murugachandravel J Department of MCA Mepco Schlenk Engineering College, India
Abstract E-Commerce, also called, Electronic Commerce or Internet Commerce, deals with buying and selling of goods or services using the internet, and the transfer of data and money to execute these transactions. The different forms of E-commerce are Business-toBusiness (B2B), Business-to-Consumer (B2C) and Business-to-Government (B2G). Using the latest trends can improve communication and E-Commerce business. With more digital innovations in finance, public people were showing much interest in this form of business. Apart from this, financial sector stakeholders and academicians are also attracted towards this. The main idea of Crypto currencies is to replace centralized systems such as banks and to reduce the need for an intermediary. As a result, the shopping process becomes much easier. With E-commerce, there is a possibility of reaching more people across the world with less expense than the traditional business. With the introduction of crypto currency, like Bitcoin, it has become easier for the users to move value around the web. Market volatility is the key issue with crypto currency payments. Price fluctuations in the value of a crypto currency can lead to net gains or net losses for e-commerce merchants. To put up risks and volatility, consider incremental additions such as rolling out crypto payments support on a web app before making them available via native app capabilities or vice versa. Keywords- Block Chaining, Crypto Currency, Mining, Bitcoins, Security Threats, E-commerce, User Privacy
I. INTRODUCTION The term Electronic commerce refers to the effective use of an electronic medium to do commercial transactions. It also refers to the sale and the purchase of products or services through internet. In certain cases, electronic commerce makes it easier to customize products, especially, when the electronic commerce site is linked with the production system of the enterprise (e.g. business cards, customized items such as T-shirts, cups, caps, etc.)
II. IMPORTANCE OF CRYPTO CURRENCY 1) While doing online transactions, people prefer to use crypto currencies because of the following benefits. 2) It helps doing business in a simpler and safer way. It gives customers good belief and trust for making investments for current and future needs. Since it follows systematic polices, online users find it easy for making payments. The users need not depend upon any third party. 3) The users need not sell their money to exchange digital currencies. It is enough if the user is aware of the crypto currencies and has a smart phone. 4) As no intermediary is involved, there is no need of paying any commission. 5) Crypto currencies can be stored in a wallet, from where the users can easily transfer to their account, and the wallets don’t charge for storing currencies. A. Different Forms of Crypto Currency 1) Litecoin (LTC) Litecoin uses the script algorithm, which incorporates the Secured Hash Algorithm, SHA - 256. It favors large amounts of highspeed RAM, rather than raw processing power alone. 2) Ethereum (ETH) Ethereum is an open software platform based on blockchain technology that allows developers to build and deploy decentralized applications. It is also used to build Decentralized Autonomous Organizations (DAO). A DAO is a fully autonomous, decentralized organization with no single leader. DAOs are run by programming code, on a collection of smart contracts written on the Ethereum blockchain.
All rights reserved by www.grdjournals.com
1
Impact of Digital Currency in E-commerce (GRDJE/ Volume 4 / Issue 7 / 001)
3) Zcash (ZEC) Zcash is a decentralized and open-source crypto currency used to provide extra security, in which all transactions are recorded and published on a blockchain, but other details such as the sender, recipient, and amount remain private. Zcash encrypts the contents of shielded transactions. Since the payment information is encrypted, the protocol uses a novel cryptographic method to verify its validity. 4) Dash (DASH) It is built upon Bitcoin’s core code with the more advanced features like privacy and quick transactions. It has a blockchain, wallet infrastructure and community. Its transaction fee is negligible. 5) Ripple (XRP) The payment providers exhibit more interest in using this. It is built for enterprise and individuals. The main objective is to move lots of money around the world as rapid as possible. It is stable and more than 35 million transactions are processed without any issue. It has the ability to handle more than 1500 transactions per second. 6) Monero (XMR) Monero is a secure, private currency system that uses cryptography to ensure that all of its transactions are not linkable and are untraceable. Nowadays it is more desirable.
III. LITERATURE SURVEY David Kbilashvili et al., have trown light on various Crypto currencies as the payment system. According them, more than 550 crypto currencies were introduced and only few of them were successful [1]. In the paper [2], the main objective of the author Mirelaredžović was to bring both positive and negative effects of Bitcoin on e-commerce. They also discussed about the development of E-Commerce in the past two decades. In the paper [3], Shailak Jani, observed the users’ confidence in using crypto currencies. He also analyzed response from nearly, twenty one different countries with respect to regulations and legislations concerned with crypto currencies. The author, Himani Grewal in [4], explored the various issues with respect to the usage of various crypto currencies in E-Commerce business. The paper also observed the ethics needed to be followed and their corresponding development and implementation of policies. As the usage of internet has become more popular, it provides more advantages to the users of E-Commerce business. Apart from this, internet also offers unethical behavior. Due to growth of ecommerce oriented businesses, it is viewed that ethical issues also continue to increase. In [5], Hui Lie et al, proposed a six-layer reference model for E-Commerce that includes infrastructures, science techniques, elementary services, business strategies, business modes and society environment layer. The machine-readable specification for each layer helps to exchange concepts and implement them effectively by people involved in E-Commerce business. David G. Messerschmitt et al., [6], explained the various opportunities to apply e-commerce technologies to networking. It includes the assembly, pricing and payments for corresponding infrastructure resources and various information access. E-commerce could do all sorts of help and synchronization of these elements. Vinitha Stephie. V et al., [7], focused on the design of Web portal for trading and welfare of pets. A “usability subculture” has evolved as a result of emerging web technologies. Due to this application, the users can easily enter into the approach of Veterinary Science, clubs, buying and selling of pets and their accessories.
IV. PROS AND CONS OF CRYPTO CURRENCY A. Benefits Since no third party is involved, there is no chance for central authority to manipulate or seize the currency. 1) Anonymity and Transparency If the Bitcoin users don’t publicize their wallet addresses publicly, it is really difficult to trace transactions belonging to them. However, even if the wallet addresses known to public, generation of new wallet address can be done easily. Thus increased privacy is achieved. 2) No Taxes and Lower Transaction Fees With the decentralized nature and user anonymity, there is no tax system for bitcoins. Earlier, Bitcoins provided instant transactions at nearly no cost. Even now, Bitcoin has lower transaction costs than a credit card, Paypal, or a bank transfer. 3) Theft Resistance Bit coins could not be stolen because of its design. Moreover, bitcoins are free from Charge-backs, i.e., once bitcoins are sent, the transactions could not be reversed.
All rights reserved by www.grdjournals.com
2
Impact of Digital Currency in E-commerce (GRDJE/ Volume 4 / Issue 7 / 001)
B. Challenges High energy consumption: Bitcoin’s blockchain uses PoW model to achieve distributed consensus in the network. In general, processing time needs more energy than using a Visa credit card. So there is a need for innovative technologies to reduce this energy consumption. Likewise, due to the heavy load in network, each transaction consumes more energy and, transaction processing time is also increasing. 1) Wallets can be lost When the user losses the private key due to various problems like a hard drive crash or a virus corrupts data or lost the device carrying the key, all the bitcoins in the wallet have been considered lost for forever. 2) Criminal activity The secrecy provided by the Bitcoin system helps the cyber criminals to perform various illicit activities such as ransom ware, tax evasion, underground market, and money laundering. Moreover, block chain in e-commerce allows for faster and cheaper executions of transactions in E-Commerce. For online payment in E-Commerce business, there are many online payment methods, coming with high transaction fees and limited payment options. But, in case of using blockchain technologies for payments, there is no need for financial intermediaries. These transactions provide direct access to all details and documentation. Usually, users spend time in requesting this information from intermediaries. Also, blockchain-based payments don’t require customers to give sensitive information to the third-parties. Transactions using blockchain occur directly between customers and merchants. This benefits the customers, who usually carry the extra costs, and sellers, who can offer products at a more competitive, lower price. The only fees necessary are for the network behind the blockchain, which validates transactions and secures the network. As of now, these fees are smaller than those charged by other digital payment providers.
V. CONCLUSION With more advancements in the field of Internet, Internet applications and mobile applications with crypto currency are playing a major role in E-Commerce Business. In this paper, we have explored various advancements, the role and impact of Crypto currency in E-Commerce. Since the Government has made major regulations and systematic implementations of policies, use of digital currency in E-Commerce business is a major success. Now more secured transactions are possible in internet with crypto currency.
REFERENCES David Kbilashvili, “Influence of E-Commerce and Crypto currency on purchasing behavior of wine customers”, Global Journal of Management and Business Research: E-Marketing, Volume 18 Issue 3 Version 1.0 Year 2018. [2] Mirelaredžović, Jelenanovaković, “The Impact of Virtual Money on E-commerce”, International Scientific Conference on ict and E-Business related Research, 2016. [3] Shailak Jani, The Growth of Crypto currency in India: Its Challenges& Potential Impacts on Legislation, Research gate publication, April 2018. [4] Himani Grewal, A Study of Ethical and Social Issues in E-Commerce, International Journal of Advanced Research in Computer Science and Software Engineering, Volume 2, Issue 7, July 2012. [5] Hui Lie, Xi’an Jiaotong University, A Reference Model for E-Commerce, 2002. [6] David G. Messerschmitt, Opportunities for E-commerce in Networking, IEEE Communications Magazine, September 1999. [7] Vinithastephie. V and M. Lakshmi, design and implementation of e-commerce web application, arpn journal of engineering and applied sciences, august, 2017. [8] https://ccm.net/contents/207-introduction -to-e-commerce-electronic-commerce [9] https://www.investopedia.com/tech/ most-important-cryptocurrencies-other-than-bitcoin/ [10] https://www.investopedia.com/tech/ most-important-cryptocurrencies-other-than-bitcoin/ [11] Mauro Conti, Senior Member, IEEE, A Survey on Security and Privacy Issues of Bitcoin. IEEE Communications Surveys & Tutorials, VOL. 20, NO. 4, FOURTH QUARTER 2018 [1]
All rights reserved by www.grdjournals.com
3