What is blockchain technology?
Blockchain is a decentralized digital public book for tracking economic transactions. It is designed to record not only financial transactions, but also everything that happens in it. The best feature of Blockchain is that it allows you to publicly view users’ holdings and transactions they have made on the system.
In addition, it also hides the user’s identity through powerful cryptography. Deciphering cryptographic code requires a long and complex calculation, making it the most secure way to make money transactions.
Challenges in the e-commerce sector
Blockchain technology is transforming the e-commerce industry by decentralizing control and eliminating the existence of an intermediary from the landscape. But before exploring the potential of Blockchain technology for the e-commerce industry, let’s delve into the current challenges facing the e-commerce industry.
- High costs- One of the main problems of the seller in the traditional e-commerce business model is the involvement of an intermediary who takes a good share of the money for each purchase. The seller must pay a transaction processing fee for completing each transaction.
- Uncertain security Buyer data protection is another important issue for these types of businesses. The system must gain the trust of its customers and assure them of the security of their personal and financial data. The current state of the e-commerce industry does not ensure the safe security of users.
- Time consuming The e-commerce model includes a number of operations such as supply chain, logistics, payment gateways, etc. To manage all these operations the e-commerce industry has to deal with these intermediates every day. It takes a long time to complete the whole process.
How Blockchain will drive the e-commerce industry in the future
Blockchain technology for e-commerce is a boom not only of sellers but also of buyers. The few problems that can be addressed by introducing Blockchain in the e-commerce industry are the following:
- Cost reduction- With Blockchain, the e-commerce industry can rely on Blockchain technology to manage inventory, payment processing, product databases and other businesses. This results in you spending less on maintaining systems or hiring IT support teams to maintain them. Cryptocurrencies such as Bitcoin, Ripple, etc., will reduce the fee that institutions, such as banks, charge during transactions.
- Cyber-threats- Despite the use of a secure transaction network, the e-commerce industry is always at risk of losing data and money to its customers due to unwanted cyberattacks. Blockchain technology is the perfect solution to these problems. It provides the highest level of security by using distributed books to manage e-commerce database management systems.
- Fast processing Blockchain technology for e-commerce removes the dependence of resellers, workforces and independent organizations on the e-commerce model. This saves a lot of time spent on the overall process, from inventory management to placing orders and delivering to users ’doors.
These problems have bothered sellers from the beginning. Thus, integrating Blockchain technology into the e-commerce sector can certainly be a good idea for the whole system. This requires Blockchain technology for the e-commerce industry, which is able to solve all problems alone.
Many e-commerce companies have already started investing in Blockchain technology for business continuity. The day is near when Blockchain technology will penetrate the entire e-commerce industry.