How Can Blockchain Benefit E-commerce Business?
E-commerce business is rapidly growing many retailers transfer their production online to follow up with the market’s needs. Big and small players consider online retail as one the most comprehensive and promising fields. However, as much as e-commerce can offer for business owners and consumers, it still lacks at some points. For example, such e-commerce monopolies as Amazon or Alibaba generate more than a half online retail sales worldwide. It means that smaller companies face insurmountable competition or has to deal with the third parties to provide a compelling service to their customers.
The issue has been around for several years, but companies and business people are trying to solve it with the help of new technologies. One of the most promising ones is blockchain technology, this innovation is already widely implemented and used to ensure the best service and secure the information. Generally speaking, blockchain is a digital data structure made out of digital blocks. Each block contains a unique hash code which comes from the previous one. It means that the system is capable of following the history of transactions while standard data ledger can only show current or latest status. By using the benefits of the blockchain technology, it is possible to transform e-commerce to more transparent and secure business.
How Can Blockchain Change E-Commerce?
Eliminating a Middleman
One of the major issues e-commerce faces is control by the third party, which means that in most cases retailers have to rely on an online market platform. A middleman causes a few problems: increased costs, longer distribution time and danger to data transactions. On the other hand, blockchain is based on a distributed structure without a central point of authority. It is run by many different nodes, in case of a transaction, there is no need for a third party, as all activities are made directly. It could benefit an e-commerce business by eliminating market platforms and saving customers money and time.
It is hard to earn customers trust, especially, for smaller e-commerce companies. Due to many scams and data leakages, buyers are more conscious and picky before purchasing goods from e-shops. It becomes challenging for small online shops to get a trusted reputation and attract a big audience. However, when it comes to blockchain, the system could eliminate this issue by ensuring transparency. How does it work? As mentioned before, the structure is made of digital blocks each block has a unique hash code which comes from the previous one. This is how blocks form a chain, and when a transaction is made it has to be confirmed by the majority of nodes. It’s a way of ensuring transparency of an e-commerce business by utilizing a blockchain technology.
When asked about blockchain, the first thought that comes to our heads are cryptocurrencies, Bitcoin in particular. By now, cryptocurrency forms the major part of a blockchain usage, and it is valuable for e-commerce retailers as they can implement crypto payments. Paying in crypto would open a business for a wider audience by letting them use alternative currencies. Moreover, transactions made on blockchain are more transparent and faster. To successfully implement this digital solution, you have to find a comprehensive platform for your e-commerce business. To find the best option for you, check out this resource for best ecommerce platforms – Profit Industry.
Higher Security Levels
Blockchain’s distributed nature ensures higher security levels, as the system is made of thousands of digital blocks it is impossible to hack it. Each one of them contains a unique code from the previous one, therefore if someone decides to harm the data that person would have to change all the chain. Moreover, the blockchain structure doesn’t have a central point of authority, and in case one of the nodes gets corrupted, the system wouldn’t be damaged. It could benefit e-commerce companies by ensuring their customers about trusted and open service.
Blockchain allows different parties to have access to the system and ensures fast and secure information flow. It is valuable for e-commerce as it can attract a bigger audience and provide equally qualified service. That would abolish the need for an additional market platform where you could sell goods, moreover, high accessibility lowers costs.
We live in a fast moving world, where everything is changing in the blink of an eye. Due to recent trends, industries and companies have to adjust and turn their niche towards improvement. Blockchain implementation could solve many issues that are facing the e-commerce sector. It is ideal to make your business more secure, immutable and accessible.