The online retail sector has begun to recognize the potential of blockchain technology. There are already over 22,000 sites worldwide that accept bitcoin payments from customers, including major corporations like Expedia, Overstock, and Microsoft. In the following years, more and more consumers will start making online purchases using blockchain technology. However, blockchain technology has more to offer than just cryptocurrencies to businesses with an eye toward the future. Blockchain has several potential uses for e-commerce sites, including improved data security and customer service. It’s easy to feel overwhelmed when first learning about blockchain technology and the blockchain e-commerce platform. We’ve defined blockchain and explained why business owners should care about this new technology.
What is Blockchain?
Even though blockchain has been widely discussed, many individuals still don’t know what it is or how it works. Blockchain is often misunderstood to be a cryptocurrency like Bitcoin when in fact it is not. That’s not a programming language. That’s state of the art information right there.
The blockchain can be viewed as an unbreakable digital ledger that logs all financial dealings within a geographical area.
Distributed ledger technology, or blockchain, paves the way for digital asset trading and storage without the need for a central authority. It has several potential applications, including retail and help desk settings.
How do blockchains work?
The name “blockchain” is used to describe the structure of this digital ledger, in which individual records (or “blocks”) are linked together (in a “chain”).
All the computers in the network, known as nodes, miners, or peers, use this chain of blocks to form a shared database. The blockchain is a distributed ledger that is maintained by the nodes in a network and used to record and verify digital transactions, such as the transfer of bitcoin from one user on the network to another.
Since blockchain facilitates safer and quicker transactions, it has the potential to significantly affect the e-commerce industry.
Why is blockchain technology important for commercial transactions? The two most widely-used blockchain technologies in online retail today are Ethereum (which provides a platform for ecommerce brands to manage their own blockchains) and Bitcoin (which inspired the development of blockchain technology and allows customers to make purchases on sites and apps that accept Bitcoin).
Benefits of BLockchain Ecommerce Development
Businesses and customers alike can rest easier knowing that their online financial transactions are more secure thanks to blockchain technology. However, it also has numerous other benefits, including the reduction of costs, the improvement of operations, the acceleration of transactions, and the enhancement of the overall customer experience.
Security breaches and unauthorized transactions are major concerns for online retailers. According to PriceWaterhouseCoopers, over half of all businesses have experienced fraud in the last 24 months, at a total cost of $42 billion.*
By allowing for the authentication of identities by a number of trusted parties, blockchain technology delivers the highest level of security for customer databases and CRM systems.
A major advantage of blockchain technology for retailers is that it allows them to unify services like payment processing, inventory management, product descriptions, etc., eliminating the need to buy and operate several systems.
Bitcoin and other cryptocurrencies may be transferred instantly from user to user, eliminating the need for intermediary banks. This eliminates the requirement for a financial institution or credit card provider, which can add fees when issuing or receiving payments.
Conversions are easier and faster
Since blockchain transactions do process quickly and do not go via traditional banks, there is no waiting time for payments or pending transactions. Customers will value the streamlined purchasing process and the resulting speedier order fulfillment.
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Better ways of conducting business
Blockchains can be used to record more than just monetary transactions. By storing smart contracts (also called smart properties or chaincode) on blockchains, routine tasks like bill paying and stock taking can be automated based on a set of predetermined rules and if/then statements.
For instance, you could put down cash in the form of a blockchain-based cryptocurrency to purchase a Rolex. The receipt will be stored in a digital contract. If the shop doesn’t deliver the timepiece by the agreed date, your deposit will be refunded through the blockchain. Payment in full will be sent to the shop via blockchain only after you have confirmed receipt of the watch.
The use of a blockchain can eliminate the requirement for paper records by storing digital documents like customer receipts and warranty information.
Simplifying and lessening the financial burden of supply chain management
Brands may save time and resources on shipping by implementing blockchain technology into their e-commerce supply chain. At any time along the distribution process, shippers can submit their bills of lading to a distributed ledger for easier shipment tracking, data verification, and pallet weight checks.
In addition, for items that need a certificate of authenticity or expiration date, blockchain may validate their legitimacy and freshness, giving customers more confidence in their purchase.
Access to global markets has improved
Citizens in many developing countries lack convenient access to a safe banking system. Since blockchain and bitcoin eliminate the need for a financial institution, they have access to a wider selection of online merchants. In addition, it opens doors for innovative businesses to compete in underserved markets.
Easier and more effective referral and incentive programs
Distributing loyalty points that customers can use with a variety of partners is a breeze for businesses using blockchain. Companies can save time and effort by paying content creators and influencers in digital tokens rather than hard currency.