By Richard Peck
The Bitcoin eCommerce” trick is basically where you accept “crypto” money in an eCommerce store (for real world goods). Whilst the payment you receive will be 100% “crypto”, you’re able to exchange the “cost” of goods sold (COGS) out via an exchange, and keep the profits as “crypto”.
The aim is to ride any price increases in the underlying “crypto” assets, which should amplify your profits. Obviously, this works the other way – in that it could also lead to a loss of profits due to a drop in the price of the “crypto” tokens you were paid. However, generally, if you play the game properly – you should be able to increase your profits quite substantially with this method.
This tutorial is going to briefly explain the various points about the way this works. To do so means that you have to ensure that you understand fully what you’re doing, and how the process will grow…
Firstly, if you run an “eCommerce” store, you will need to accept payments.
With the plethora of services online today (including the likes of Stripe and PayPal), you have many ways to “receive” payments without the need for a traditional “merchant account”.
One of the newer ways to do this is with a service called BitGo. This is a “payment receipts” system for “crypto” tokens. Basically, it allows businesses to accept “crypto” currency for their products or services, allowing users to take full advantage of the likes of Bitcoin, Ethereum etc without fearing any security issues (BitGo is heavily focused on security implementation).
This means that if you receive any money via “crypto” tokens, whilst their price will often be line with the various “fiat” currencies – they will typically be quite volatile. For this reason, it’s often the case that many eCommerce store owners will simply “exchange” their “crypto” tokens for 100% fiat currency either at the end of the month, or after an order is received.
The “trick” employed by a large number of store owners is to actually keep their profits in the “crypto” ecosystem. This means they pay for everything else – including the likes of their COGS, warehousing and administrative costs – whilst retaining the pure profit in their exchange accounts.
By doing this, they have nothing to lose (and everything to gain) by letting their holdings ride the price waves of BTC and the other “crypto” tokens – multiplying their holdings faster than any savings account could ever do.