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 goes into it. The best feature of Blockchain is that it allows users to publicly see the possessions and transactions they have made over the system.
In addition, it also disguises a user’s identity through powerful cryptography. Decrypting cryptographic code requires a long and challenging calculation, which makes it the safest way to make a money transaction.
Challenges in the e-commerce sector
Blockchain technology is transforming the e-commerce industry by decentralizing control and cutting the existence of an intermediary from the landscape. But before we explore the potential of Blockchain technology for the e-commerce industry, let’s look at the current challenges facing the e-commerce industry.
- High costs – One of the main problems of the seller in the traditional business model for e-commerce is the involvement of an intermediary, which takes a good share of money with each purchase. The seller must pay the transaction processing fee to complete each transaction.
- Insecure security- Buyer data protection is another key concern for this type of business. The system must gain the trust of its customers and assure them that their personal and financial data are safe. The current state of e-commerce fails to provide reliable security for consumers.
- Time-consuming The e-commerce model includes a set of operations such as supply chain, logistics, payment gateways and more. To manage all these operations, the e-commerce industry has to deal with these intermediates on a daily basis. This takes a long time to complete the whole process.
How Blockchain will stimulate the e-commerce industry in the future
Blockchain e-commerce technology is a boom not only for sellers but also for buyers. Some of the challenges that can be addressed through the introduction of Blockchain in the e-commerce industry are the following:
- Cost reduction – With Blockchain, the e-commerce industry can rely on Blockchain technology for inventory management, payment processing, product database and other business activities. This results in less system maintenance costs or hiring IT support teams to maintain them. Cryptocurrencies such as Bitcoin, Ripple and others. It will reduce the fees charged by third-party institutions such as banks during transactions.
- Cyber threats- Despite using a secure transaction network, the e-commerce industry is always at risk of losing its customers’ data and money due to unwanted cyber attacks. Blockchain technology is the perfect solution to these challenges. It provides the highest level of security through the use of distributed books to manage e-commerce database management systems.
- Fast processing – Blockchain e-commerce technology removes the dependence of intermediaries, labor and third-party organizations on the e-commerce model. This saves a lot of time spent in the entire process, ranging from inventory management to placing orders to step-by-step delivery to consumers.
These challenges have bothered sellers from the beginning. Thus, integrating Blockchain technology in the e-commerce sector can definitely be a good idea for the whole system. Here comes the need for Blockchain technology for the e-commerce industry, which is able to solve all the challenges on its own.
Many e-commerce companies have already started investing in Blockchain technology to run their businesses seamlessly. The day is not far when Blockchain technology will penetrate the entire e-commerce industry.