All of a sudden there arrives a source Blockchain, where there was a way possible to change from the currencies of fiat to online transaction in the year 2008. It was sustained to hold the records of every single transaction which is traceable and immutable as it is completely open to the public, which was the revolutionary part of the transactions done. There were also some functions that perfectly held that did not have any central bank, central authority and was also not backed by any commodities. In the year end of 2018, its value was expected to reach $1.2 trillion, though it was moderate among tech savvy users for years. Here it is why it has big implications in eCommerce.
What is Blockchain?
A digital ledger in which transactions made in bitcoin or another cryptocurrency are recorded chronologically and publicly.
A Blockchain is a digital ledger (record) that stores every single transaction details, which is also linked with the previous transactions (called blocks). A block sustains the records of transactions which denote the link of previous block, a timestamp and data about the transactions. Once the records are created, neither the authorities nor the public can change the records as it is immutable, which builds the trust for the participants.
Satoshi Nakamoto, the creator of Bitcoin is as well known as the creator of Blockchain but the concept of blockchain has been evolving since 1991. The concept proofs of work in blockchain, helps to verify the contents of a block and it is been accessed to verify each block based on the block’s content. There is much of process that has been evolved to secure the individual’s record which is guaranteed to the participants. Bitcoin is allowed to be decentralized, when there is an assurance in the transactions in blockchain. The blockchain has adapted even the storage of medical records, events, traditional financial transactions and voting records.
Blockchain in eCommerce
eCommerce industry fits naturally in the blockchain, because the sector is aiming to transform, and hopes to have the highest impact on day to day consumer and seller activities. The e-commerce industry has arguably changed the way we store the data and the way we shop. As the data stored is immutable it shows it belongs to any of the distinct action. Some of the ways for eCommerce in blockchain.
1 Alternative payment methods
In the modern blockchain technology, cryptocurrencies (blockchain-powered currencies), bitcoin was leading in popularity and globally adopted, were the first to get implemented. Instead of other payments like PayPal, Stripe, Tez or any other payment, customers choose to pay through Bitcoin as it is commonly alternative to the payment of fiat currencies. In case of transactions, it is as simple as sharing a QR code. Also there are much of benefits for both the customers and the merchants, when transactions are dealt with bitcoins and cryptocurrencies.
2 Faster Transactions
Ethereum based company Monetha complies that the usual transaction costs around 2 to 6% in the traditional currency. It includes 16 steps to process a single transaction and also consists of number of parties. It denotes the processors of credit card vendors and also the process of simplifying benefits of both customers and merchants. Blockchain transactions are limited only by the speed of the network and by the speed which new blocks gets generated, where it tends to eliminate the need of intermediateries that underpins the single network.
The platforms like Lightning Network promises to handle 7 transactions per second, while Bitcoin at times struggles to handle. It denotes the transactions speed is limited only by the speed of the network and by the speed at which new blocks gets generated which also eliminates the intermediaries that underpins a single network.
3 More Secure Payments
The advantage for customers is that blockchain-based currencies do not reveal the individual’s identity unlike the traditional currency transactions. Cryptocurrencies like Bitcoin doesn’t expose any of the sensitive data like credit card number; instead it transfers the recipient to his or her own personal “wallet”. It just generates the unique identifier randomly and prevents from the scammers. For instance, in 2015, Credit and debit cards were used in over 100 billion transactions for a value of $5.72 trillion dollars. In a year span, 31.8 million US consumers were victims of credit card fraud.
Customers and merchants are accessed to have the transactions quicker without exposing their identities, and they as well process with speed, privacy and integrity.
4 Improved Order Fulfillment
eCommerce benefits in fulfilling the orders done by the customers, because it tends them to have a clear vision on each of the blocks that has been linked with previous ones. For instance, when a customer orders online on a blockchain powered eCommerce site, each of the process gets involved naming, order payment, fulfilment, and shipping which also adds the date stamp.
The process may evolve the following steps:
1) When an order is done by a customer, the shipping address is added and then the marketplace generates a block and proceeds with a proof of work, based on the order done.
2) On next step, the customer does the payment through credit card, and there evolves another linking the previous one with another proof of work.
3) The final step may take the process of the customer receiving the product which would generate the next block connecting to the previous block.
On extending the process, a fourth block could be generated after the time of the shipment done.
Blockchain technology establishes trust between all parties, where it serves less in the details of the orders as it is decentralized. There occurs 1-3% of global eCommerce transactions in dispute, but it is known that blockchain would help further for the transactions as it is a source of transparency.
For future trade, Blockchain financial institutions around the world are experimenting with blockchain as a platform which is expected to have around 10% of the global GDP generated by the year 2025. Blockchain has brought already an own technology for the Mastercard’s payment processes. Pharmaceuticals, luxury goods and even diamonds have been initiated for tracking systems, which have been brought as a solution, by the lead of Mastercard’s, Justin Pinkham.
Blockchain is powered to take over the world with the eCommerce industry and hundreds of other industries unlike the cryptocurrencies like Bitcoin.