The Adoption Journey of Crypto Assets in the E-commerce Sector: From Ideals to Reality

Crypto Assets as a payment method in e-commerce have always attracted attention. Theoretically, their irreversible transactions, low fees, instant cross-border payments, and other characteristics seem to perfectly solve the pain points of traditional payments. However, in reality, the adoption of Crypto Assets in the e-commerce sector has progressed slowly. It wasn't until recent years, with the increase in market maturity and technological advancements, that this situation began to change. This article will delve into the adoption process of Crypto Assets in the e-commerce field, analyzing the gap between early expectations and reality, the key role of network effects, and the new possibilities brought by stablecoins, revealing the core logic and future development directions behind it.

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

Around 2014, with the first round of price increases of Bitcoin at the end of 2013, Crypto Assets entered the public eye for the first time. At that time, the industry was generally optimistic that e-commerce would become the "breakthrough point" 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 has always been their pain point. For example, customers may request credit card companies to reverse payments for reasons such as "goods not received" or "fraudulent transactions," and merchants often have to bear the entire loss. The irreversible nature of Crypto Assets should fundamentally solve this problem.

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%, with an arrival time of 3-7 days; whereas the cross-border transfer fees for Bitcoin and other Crypto Assets are fixed at (, initially only a few cents ), and the arrival time is only about 10 minutes. For e-commerce merchants relying on global supply chains, this seems to be an ideal choice for "reducing costs and increasing efficiency."

However, the theoretical advantages have not translated into practical applications. Although some leading companies have attempted to integrate Bitcoin payments, the user adoption rate is extremely low. More critically, the technical limitations of Bitcoin itself have become a fatal flaw: in 2017, the controversy over Bitcoin scaling escalated, and transaction fees soared to $20 per transaction, making it "uneconomical" to purchase items under $100—paying $20 in fees for a cup of coffee is clearly unreasonable. At this stage, the attempts of Crypto Assets in the e-commerce sector resemble "pioneering experiments" rather than large-scale applications.

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

The early setbacks of Crypto Assets in the e-commerce field essentially reflect the "underlying logic of currency substitution": for a new currency to replace the existing system, it must overcome the "network effect" of the old currency. This can be profoundly illustrated by the case of the prison economy.

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

Returning to the competition between Crypto Assets and traditional payment systems: Bitcoin, while solving issues of chargebacks and cross-border fees, has not yet achieved a "disruptive" level of advantage. Traditional payment systems have formed strong network effects over decades of accumulation—consumers are accustomed to the safety mechanism of "consume first, dispute later," and merchants rely on mature reconciliation and refund processes. The "complexity threshold" of Crypto Assets, such as private key management, wallet operations, price volatility, and technical operational costs, further weakens merchants' incentives. As someone said: "Unless there is a fundamental need as pressing as hunger, the monetary system will not change easily." Bitcoin's early failure to provide a "must-use" reason naturally made it difficult to shake the existing structure.

Turning Point: The Cases of Japan and South Korea - The "Chicken or the Egg" Dilemma of Crypto Assets Popularization

In recent years, the adoption of crypto assets in the e-commerce sector has finally made substantial progress, with Japan and South Korea being the most representative cases. Despite the significant drop in crypto asset prices at the beginning of 2018 raising market concerns, both countries have continued to promote the implementation of crypto asset payments in mainstream retail scenarios. For example, a major e-commerce giant in Japan announced in 2018 that it would support Bitcoin payments, covering its e-commerce platform, travel services, and even mobile operator business; 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 promoted" by merchants, but rather the result of a "user base leading the way". Japan and South Korea are among the countries with the highest rates of Crypto Assets ownership in the world — according to 2018 data, there were about 3 million Crypto Assets holders in Japan, accounting for 2.4% of the total population, and the number of Crypto Assets trading accounts in South Korea exceeded 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" — instead of having users exchange Crypto Assets for fiat currency before spending, it is better to directly accept Crypto Assets to enhance conversion rates. This confirms the logic of "users first, then merchants": only when the "holding group" of Crypto Assets 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 Breaking the "Volatility Curse" or a New Centralization Trap?

Although cases in Japan and South Korea show that Crypto Assets have made breakthroughs in certain markets, price volatility remains the biggest obstacle to their becoming a "mainstream payment tool." Imagine this: if you use 1 Bitcoin to buy a computer worth $5,000, and 24 hours later the price of Bitcoin drops by 10%, you effectively 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 regard Crypto Assets as a "measure of value."

The core solution to this problem is widely regarded as "stablecoins"—a type of Crypto Asset tied to fiat currencies like the US dollar and Japanese yen (. Theoretically, stablecoins can combine the technological advantages of Crypto Assets ) such as speed, low cost, and cross-border capabilities ( 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-backed" model: for every stablecoin issued, the issuer must deposit 1 USD in fiat currency into a bank account as reserves. Although this model can ensure price stability, it reintroduces centralization risks—users must trust that the issuer has "sufficient reserves" and "does not misuse funds." Historically, a well-known stablecoin caused market panic due to reserve transparency issues, leading to a temporary deviation of its price from the 1 USD peg.

2. The 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" ), such as using $200 worth of Crypto Assets to collateralize $100 of stablecoins (, and may face a "death spiral" ) under extreme market volatility, where price drops trigger liquidations, further exacerbating sell-offs (. As of now, no decentralized stablecoin has achieved the scale and stability of fiat-collateralized stablecoins.

Someone proposed an innovative idea: a decentralized stablecoin backed by a network of retailers. Similar to the banknotes issued by the "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 the establishment of widespread 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 will not be a "one-step revolution," but rather a process of "organic growth." As the user base holding Crypto Assets expands, according to a report from a data platform in 2023, the number of global Crypto Assets holders has exceeded 420 million, which will naturally enhance merchants' motivation to adopt; 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 "diverse coexistence" pattern: stablecoins for daily small payments, mainstream Crypto Assets like Bitcoin as tools for large cross-border transactions, while traditional payment methods continue to serve risk-averse users. Just as in prison where "ramen coexists with tobacco"—the former 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 sector may only be one "killer application" away—and the maturity of stablecoins could be that crucial turning point.