In recent years, the e-commerce space has experienced many different trends, innovations, and transitions. With the entrance into the 4th industrial revolution, it is likely to be disrupted once again – this time with the implementation of blockchain technologies. But what is blockchain? Is it worth the hype?
What is blockchain?
Let’s start with the basics:
Essentially, a blockchain is a decentralized and distributed digital ledger that is used to record transactions across many computers, or nodes, making it close to impossible to alter or change. It is a digital chain of encrypted, time-stamped blocks of transactions, linked in chronological order. By using a blockchain, many people can write entries into a record of information, allowing a community of users to see and control what information is stored. Keep in mind, Bitcoin is just one of the MANY applications and uses for blockchain technology. In fact, just as the Internet once did, blockchain can (and most likely will) touch just about every industry, including e-commerce.
Blockchain and eCommerce
Since the largest and most relevant implementation of blockchain has been in the cryptocurrency and financial space, it’s no surprise that payment methods when it comes to retail and e-commerce will shift too. For many, paying with Bitcoin, for example, will replace where consumers currently use PayPal. Why? The advantages benefit both customers and merchants. Some of these examples include decentralization, identity protection, faster transaction times, fraud reduction, ease of use, and so much more.
But blockchain use isn’t limited to financial transactions. One of blockchain’s biggest draws is its ability to apply transparency to an industry, something E-Commerce marketplaces could certainly use. Transparency can be established in many ways, including verification of product authenticity, fair reviews, ease of monitoring, and much more. For example, when it comes to a business and their reputation, genuine reviews are key. Whether the review is good or bad, it may help determine its order of appearance on an e-commerce marketplaces. Unfortunately, with the way things are set up today, fake reviews are prevalent and can tarnish a product’s reputation.. To accurately verify a user, blockchain brings complete transparency and security to the table. Once data is stored on the blockchain and in a block, it can be added to other similar blocks, but it can never be altered or deleted. Plus, each block requires verification across a network of computers before it can be added to the chain. Once that digital map is created of a product, it cannot be modified. Therefore, fake reviews can be curbed and minimized.
Blockchain and Security
Aside from decentralization and transparency, blockchain can add an unparalleled level of security to the e-commerce space. For one, blockchain-based currencies do not show personally identifiable information. This is a major plus for e-commerce users, as the consumers can be a peace knowing their information won’t be leaked or put on display. From the business’s side, it is extremely difficult, if not impossible, to complete a cyber attack or breach when using blockchain technology. In today’s day and age, this is a must in order to avoid the risk of losing customer data.
At the end of the day, blockchain technology could be a revolutionary way for e-commerce platforms to get ahead and stay ahead. Whether it be transparency, security, ease of payment, decentralization, and so much more, blockchain offers businesses and users a plethora of benefits while solving age old problems.