As the retail industry moves to become more digital, and omni-channel retailing becomes ingrained in our collective industry lexicon, payment methods and secure transactions are becoming more important to our daily lives. What will the future of retail look like? While the transition to chip-and-pin technology continues to move forward, what other security options exist? One alternative is Bitcoin, a virtual currency that eliminates the need for middlemen, such as banks or third-party networks.
Bitcoins are usually sold anonymously through online exchanges to buyers. When you purchase bitcoins, you are given a unique public Bitcoin address consisting of 27 to 34 alphanumeric characters, which is used to exchange bitcoins. Users then create an anonymous digital wallet of their Bitcoin addresses and their private cryptographic keys, which act as the digital credentials that allow them to access their bitcoin holdings.
Every Bitcoin transaction is recorded in a public ledger called the block chain. Essentially, the block chain is a history of all confirmed transactions and a record of how many bitcoins each Bitcoin address contains. Bitcoin transactions are verified by a network of computers to prevent double spending, and payments are irrevocable. That means it is impossible for buyers to chargeback Bitcoin purchases.
For retailers, Bitcoin reduces transaction fees as well as credit card chargebacks and fraud. It also greatly reduces the risk of data breaches because you no longer store credit or debit card numbers in the POS.
Users can store Bitcoin wallets locally on their PCs or smartphones or on an exchange. This makes it attractive option for online shoppers or those who are moving toward making smartphones their primary form of payment.
But when it comes to security, is Bitcoin any more secure than our current methods of payment? According to Adam Smith at Bi-Lo Holdings, Bitcoin is very secure–if handled correctly. Learn more about the process and how to keep your bitcoins safe in this EyeOnLP exclusive video.
