Most people are aware of blockchain as the fundamental technology behind cryptocurrency, a type of digital asset that has been steadily growing in prominence and popularity since the invention of Bitcoin in 2008. These days, crypto enthusiasts have their pick of thousands of different types of cryptocurrency, each promising its own special advantages and functions.
The privacy coin Monero (XMR), for example, allows anyone anywhere in the world to conduct completely untraceable, anonymous transactions through a highly encrypted XMR wallet. Other cryptos promise faster transactions, low transaction fees, and a host of other benefits.
The revolutionary potential of blockchain, however, does extend far beyond cryptocurrency. In recent years, companies in a variety of industries around the world have begun adopting blockchain technology to elevate their business operations. Most are interested in the security benefits of incorporating blockchain, but many also see its potential for elevating other key areas of business, such as data management, supply management, and payments.
E-commerce is one sector where the incorporation of blockchain technology could potentially revolutionize operations. This industry has boomed over the years with the increasing popularity of online selling and shopping, but many e-commerce companies struggle to achieve high levels of user security without sacrificing customer convenience. In light of this, fans of blockchain will readily argue that embracing the technology could solve the e-commerce industry’s many problems.
According to experts in the field, the e-commerce industry could potentially enjoy the following benefits from adopting blockchain tech:
Simply put, a blockchain is a digital ledger that is used to record and verify online transactions. This ledger is housed on a decentralized network of computers rather than owned and administrated by a single individual or organization. Blockchain networks facilitate peer-to-peer exchanges between buyers and sellers, eliminating the need for middlemen (such as banks or credit card companies) that often slow down the transaction process.
The decentralized nature of blockchain thus means that online payments made through a blockchain platform can be processed in a matter of minutes instead of over several days, as is the case with traditional financial institutions. E-commerce businesses can then begin the order fulfillment process as soon as they’ve received payment. This payment model minimizes the amount of time a customer will have to wait for their purchase to arrive, thereby enhancing client satisfaction. It also allows businesses to fill more orders within a certain period.
Lower Transaction Fees
At present, most e-commerce platforms route payments through third-party service providers like banks or fintechs. These third parties typically levy transaction fees from the seller, the buyer, or both. In many cases, fees for international transactions are particularly high.
As previously mentioned, blockchain transactions are peer-to-peer between buyer and seller. Incorporating blockchain on e-commerce platforms thus eliminates the need to pay any additional fees and allows both the buyer and seller to make significant savings on their transaction.
A Safer, More Secure Payment Model
High-level encryption features make blockchain networks far more secure than any other currently existing digital record-keeping platforms. Transactions made on a blockchain are immutable, which means that they can’t be edited as soon as they’ve been recorded in the network’s ledger. They’re also clearly timestamped for transparency purposes. These features make it more difficult for hackers to falsify transaction information and for customers to make dishonest claims.
Reduced Risk of Online Fraud and Scams
Keeping customer information safe is another pressing challenge facing e-commerce platforms today. Most companies store this information on private, centralized servers, which can render them vulnerable to attacks from cybercriminals. Hacking techniques have only grown more sophisticated over the years, and even the largest and wealthiest e-commerce companies have fallen prey to attacks despite hefty cybersecurity investments.
Blockchain technology offers a much more secure method for recording and storing information than any other platform currently available. This is in large part due to the decentralized nature of blockchain networks. Transaction records made on a blockchain are immediately duplicated and recorded on not only one computer, but every computer on network. This means that hackers attempting to falsify a transaction would have to access a multitude of computers and manipulate the transaction records on each one.
Transparent Fulfillment of Orders
E-commerce customers are especially particular about transparency and generally prefer to be aware of what’s happening to their purchases throughout the fulfillment process. Companies that offer order tracking and ready customer service in the event of irregularities generally tend to find more favor with consumers for this reason.
More and more companies today have turned to blockchain to optimize their supply chain management and other critical business processes, and with good reason. Processing transactions through blockchain networks also makes it much easier for sellers to provide customers with real-time detailed information on their orders as well as track and resolve any problems that arise. All actions performed by all parties involved in the transaction, from placing the order to delivering it, are recorded on the blockchain. This allows customers to monitor their order statuses easily every step of the way.
Blockchain technology can improve e-commerce companies’ security, productivity, and transparency by leaps and bounds. These improvements, in turn, will only serve to enhance the customer experience, allowing e-commerce platforms to attract new customers and secure the loyalty of old ones.