Blockchain For E-Commerce
Blockchain technology acts as the backbone of a special category of the internet. Holding a wide range of use cases across digital platforms and a lot more, and blockchain is being adopted by e-commerce giants to SMB. Blockchain For E-commerce businesses is becoming to have a huge impact in the digital world.
Let’s take a look at what exactly is ‘Blockchain For E-commerce’ and how does it disrupt the existing structure!
The hefty e-Commerce sector is disrupted by blockchain. This pandemic industry has positively messed our lifestyle in a lot number of ways and blockchain has already started to disrupt the e-commerce businesses. Blockchain-based e-commerce will provoke a dynamic shift by establishing a decentralized economy. Blockchain e-commerce solutions offer greater potential for businesses across the globe. Blockchain technology offers much potential for ecommerce businesses. Transactions, Supply Chain, and Decentralized platforms are the three main fundamentals that are behind the successful running of the e-commerce sector.
What is Blockchain?
In short, a blockchain is a chain of transactions. They are generally in the form of digital currencies and stored as a distributed ledger across a network of computers. There are no possible ways to modify or delete the data stored in a blockchain. Cryptography plays a pivotal role in a blockchain network. Yes, the blocks that store the data follow cryptographic hash principles. Besides Quantum, Blockchain technology is considered one of the greatest technological advances in recent years.
What is Blockchain used for?
Blockchains are potential enough to structurize the way society functions. They possess limitless applications and a lot of use cases across various areas such as online retail, money transfers, supply chain management, digital identities, real estate, data transfer, food safety, immutable data ledger, tax regulations, and digital voting applications.
Blockchain Technology On Ecommerce
Integrating blockchain technology on eCommerce businesses offer greater security and anonymity, and e-retail platforms built using this distributed ledger technology open up a number of consumer protections. There is no governing body to observe and collect data on the blockchain. By giving the users, the ultimate power of data control, they are free to either sell that data to third parties or simply store it.
Generally, E-commerce businesses put forth some peculiar challenges and risks to the financial industry that must be administered. The rapid growth in e-commerce indicates that users continue to prefer over self-service methods rather than participating directly with customer representatives to ease transactions. The security measures protecting these e-commerce systems must be of higher standards and hack-proof.
Benefits of Blockchain for E-Commerce
Blockchain adoption is spreading rapidly in the digital realm. Many tech giants are researching on how to extract the maximum efficiency of this technology. The benefits of implementing blockchain technology could potentially be a game-changer and it’s no surprise.
Transactions Made Cheaper
Transaction costs in a blockchain are comparatively lower than the costs in a conventional ecommerce. To be more precise, transaction cost in a public cost is usually 0.01 USD. Private blockchains offer even lower charges. This paves the way for blockchain to be highly preferable for online transactions.
Along with that, the lower charges incurred in blockchain transactions have eventually opened the gate for dynamic micropayments. By eliminating the payment processing fees levied by gateways, card companies, and banks, online sellers would be able to transfer the savings to customers via cheaper production costs
Transactions Made Faster
Blockchains allow quicker transactions when compared with traditional payment systems. Traditional payment systems involve 16 different phases. This includes a transaction fee, usually between 2% and 6% of the total amount. This results in far more expensive and huge processing time than transactions on a blockchain.
Intermediaries have no role to play for the transactions in blockchains because of the peer-to-peer mechanism. Transaction speeds are always limited by the capacity of the network. For example, Bitcoin can handle up to seven TPS while Ethereum’s ‘Lightning Network’ platform can handle up to one million transactions per second.
Standardized Data Security
By having information shared among a network holding more than a million systems, blockchain technology is both reliable and immutable. Blockchains are decentralized, i.e., no third-party will have permission to enter or hack into their data and perform restricted actions.
As the data in a blockchain network is encrypted and cross-verified by multiple nodes, modifying or infiltrating the network will be extremely difficult and expensive since every single node on the network would resist any attack from unauthorized access.
Blockchain Application For Ecommerce
Revamping the Payment Systems
The primary blockchain application for ecommerce is replacing the current payment methods with an efficient & dynamic payment method. Crypto payments offer a hefty advantage over fiat currencies that benefits both consumers and merchants. Blockchain-regulated cryptos do not reveal the identities of the parties involved and also the processes are automated.
- Incorporating crypto payment gateways in every line of business to accept payments via digital currencies.
- Blockchain reduces the additional costs levied on the transactions and puts an end to the payments messing up.
- With blockchain’s dynamic authentication systems, peer-to-peer payments will become easier and transactions will be more secure.
- Blockchain automates payments between merchants and credit card companies with complete control by algorithmic processes.
- Blockchain affords steadily-accessible accounts, high-security measures, lowered transaction charges, and international access.
Supply Chain Management
Supply chain management is the most pressing concern every eCommerce business deals with. Blockchain implementation in the supply chain will eradicate numerous issues. Blockchain is a better alternative to a centralized database and can be leveraged to overcome issues such as record or bookkeeping, unreliable product tracking.
- Crypto payments are facilitated with the aid of blockchain technology and because of that, there are no payment reversals.
- Blockchain allows banks and financial institutions to conduct cross-border independent transactions; thus lowering the costs.
- Avoiding middlemen is the key concept of decentralization. Blockchain paves the way for P2P & B2B services with high security.
- Blockchain opens up a decentralized environment where any illegal activities or wrongdoings can be efficiently monitored.
- With its automated nature, blockchain is capable of reducing overall costs for retailers and consumers at a much lower rate.
B2B ECommerce On The Blockchain
The deployment of cryptographic signatures forbids counterfeiters and makes blockchain-depended transfers the most secure among all online transactions. This featurette has already started to attract the existing financial sectors, forcing them to propel into digital currencies and blockchain networks.
Besides monetary transactions, the application of blockchain extends furthermore. For B2B entrepreneurs, blockchain can simplify ‘n’ number of things, ranging from issuance and transfer of financial securities to gift vouchers/coupons, loyalty points, energy credits, and even mobile minutes.
Generally, B2B businesses deal with high-value & high-volume orders that include multiple layers like producers, suppliers, distributors, and consumers. So, the friction would be high in those cases. B2B ecommerce on the blockchain aids businesses in reducing friction points and allows the entrepreneurs to utilize smart contracts, thus reducing inefficiencies at most levels of a deal-making process.