What Is Blockchain?
The emergence of bitcoin in 2008 completely changed the way we view financial transactions. Indeed, this development sent shockwaves across major central and federal banks around the world. Finally, we had a fully-functional digital currency that was free from all regulations. It was not attached to any central bank and had no commodity backing. For online merchants, the invention of bitcoin by Satoshi Nakamoto seemed like what the industry had been waiting for.
But what is truly fascinating about bitcoin and cryptocurrency at large is not because the system is free from regulation. It’s the fact that transactions are stored through an accurate, robust, and hack-proof system known as the blockchain.
A blockchain refers to a systematic way of tracking transactions whereby a record of all the transactions made on a cryptocurrency platform, such as bitcoin, is maintained across closely-linked computers. The operations are known as blocks, and the computers that store blockchains are usually linked in a peer-to-peer network. For each block to be considered valid, it must contain a link to the previous block, as well as a timestamp and accurate data regarding the transactions it represents.
The best thing about transactions on the blockchain is that they are immutable. Once you create a block, you cannot modify it, which makes blockchain one of the most trustworthy concepts.
Now, e-Commerce is one of the industries that has benefited immensely from this revolutionary concept. And in this post, we shall discuss how blockchain technology has, and will continue to transform e-Commerce.
1. Alternative Methods of Payment
Blockchain uses its currencies, known as cryptocurrencies. Bitcoin ($BTC), is the most popular cryptocurrency. So much that some people often use the terms “bitcoin” and “cryptocurrency” interchangeably.
However, there are numerous other cryptocurrencies, such as Bitcoin Cash ($BCH), Ethereum ($ETH), Tether ($USDT), to mention but a few.
Cryptocurrencies have become an alternative method of payment, especially for online merchants trying to escape the prying eyes of regulators. All you have to do is download an e-Commerce mobile app that allows you to keep track of your transactions in real-time.
As alternative payment methods, cryptocurrencies have a few advantages over traditional currencies. Most notably, the transactions are easy to complete as, in most cases, it merely involves the sharing of a QR code between a merchant and customer.
2. Transactions Are Faster
Traditional payment methods are notorious for implementing bureaucratic channels that not only waste time but also charge heftier commissions. A transaction that would have taken you a few seconds to complete can take upwards of 10 minutes while costing you up to 5 times more.
These are some of the hurdles that blockchain seeks to eliminate. As the transactions occur on a single network, it significantly reduces the number of intermediaries. And that also reflects favorably on the overall commission charged.
The speed with which transactions are completed on blockchain mostly comes down to the speed of your internet. With a stable internet connection, specific platforms can process millions of transactions in a second.
3. Improved Supply Chain Management
As we already mentioned, each block on a blockchain platform links to the previous block. That makes it easy to track transactions for better record-keeping, inventory tracking, and higher efficiency.
Blockchain captures a product’s entire timeline, from the point the order was made, up to when it was fulfilled. With such a system, you’ll never have to worry about losing critical data in your company’s supply chain. It also renders a few departments in your company redundant. For instance, you would no longer need to hire an inventory or invoice record keeper, as everything happens automatically through a reliable platform.
And the fact that this information can be accessed using RFID tags and embedded sensors makes it even more trustworthy.
4. Transactions Are More Secure and Transparent
Another significant way through which blockchain has revolutionized e-Commerce is by guaranteeing transaction security. All transactions that take place on a blockchain do not disclose the identities of the buyer and seller.
Instead, transfers are authorized directly from one wallet to the other without sharing any sensitive information. The only thing the seller and buyer share is a randomly-generated code.
This is especially beneficial for parties that prefer anonymity. Plus, it helps to prevent the ever-growing incidences of credit card fraud.
But while transactions through the blockchain technology do not reveal your identities, these transactions are still transparent enough. That’s because the platform utilizes centralized ledger stores that accurately capture all the details of a deal, and makes those transactions visible and accessible by anyone.
5. Merchants Can Store Their Wealth in a Stable Currency
The blockchain did not just make online transactions a breeze. As we’ve already highlighted, the system utilizes cryptocurrencies, and these currencies are purely decentralized. That means that any central or federal bank does not regulate them. Instead, the merchant and customer control each of their transactions. Therefore, there are no chances of any data getting manipulated by third parties.
Plus, being decentralized means, there are no limitations on the number of transactions you can make and the locations you can make those transactions to. But here’s the best part.
World economies can collapse in an instant. Presently, major economies are struggling to cope up in the face of the rapidly-spreading, highly-infections, and fatal COVID-19 pandemic. However, the cryptocurrency system is as stable as ever.
So, besides using the blockchain to make secure transactions, online merchants may also consider storing their wealth in the form of cryptocurrencies, just in case the worst-case scenario becomes a reality.
Blockchain technology has revolutionized e-Commerce in a big way. Whether you are an online merchant or customer, there are numerous ways you can benefit from conducting your transactions on a faster, cheaper, and more secure platform such as the blockchain.