How Blockchain is Transforming the eCommerce Industry
A Blockchain is a type of database – it’s a chain of blocks that contains information. Now to understand blockchain you need to understand what is a Database? A database is a collection of data stored in an electronics machine. In a database, data stored in a table format like an excel sheet. But there can be large databases that they handle on servers that are made by powerful computers. Blockchain is a database but not all Databases are blockchain. One of the key differences between Blockchain and Database is the way of the storage of the data. Blockchain stores the data in a group (block) and made a unique key for a specific block (hash). When the block filled, it’s chained with previous block and forming a chain of data which is called ‘Blockchain’.
How does the Blockchain Work?
In 1991 Blockchain concept described by a group of researchers. Their Intend was to timestamp the digital documents so that it’s impossible to hack them or in the language of Blockchain temper them. It went in use in 2009 when ‘Santoshi Nakamoto’ adopt it and make a cryptocurrency called Bitcoin. Block in Blockchain has some properties like when a data has been recorded it’s become very difficult to change it. For Bitcoin Blockchain a block contains data of that transaction, Hash and Hash of the previous block. Using that Hash, you can traverse the blocks. When a new block is created its hash is calculating, any change in the block will cause a change in hash and the rest block will invalid because of changes in the previous Hash.
Blockchain Uses in Ecommerce
Payments: According to Coin Map a side that tracks merchants accepting cryptocurrency, nearly 15000 places are taking cryptocurrency as payment from their customers. Accepting cryptocurrency as payment is risk worthy or not depends on the company’s way of seeing it. Prices of cryptocurrency go up and down all time. A cryptocurrency like bitcoin inherits some properties of blockchain-like having no middle man -bank, payment processor which many mainstream payment methods require. The cause significant cost out to vendors and customers. Many large online retailers like Microsoft, Expedia, Overstock are accepting bitcoin as payment because accepting cryptocurrency as payment nowadays is become simple.
Supply chain: Reducing cost is the key feature of blockchain. That’s why many suppliers use blockchain to avoid paperwork. For smaller suppliers, profit margins can be very limited because of the constantly changing value of cryptocurrency.
Some Advantages of Blockchain
Decentralized: Blockchain isn’t regulated by any third-party organizations so that the buyer and the seller can only control the operations. Blockchain currency can’t be de-evaluated by anyone as the value of cryptocurrency vary on market prices. Blockchain currency doesn’t depend on any particular state’s economic position.
Identity Protection: Blockchain-based payments are very secured as this doesn’t reveal the identity of the transaction maker. And there was no control of any state’s government that how a person can utilize his/her cryptocurrency.
Faster transactions: Blockchain provides faster transactions than any other mainstream transaction mode which requires days to send money from a country to another. Bitcoin takes only a minute to transfer.
Reduced Fraud: Blockchain-based transactions are extremely secure because of peer-to-peer technology. Any person can join this peer-to-peer network and when he/she join gets a full copy of the blockchain. When a new block created a copy of that block goes to everybody and needs to verify by everybody to ensure it’s not tempered. If everyone verifies then that node goes to their individual blockchain. If anyone wants to tamper with a block that person needs to change all blocks, redo the proof of work and need to take control of almost 50% of the network then there is a chance to accept that block to the peer-to-peer network.
Ways the Blockchain is Transforming the eCommerce
Blockchain improved supply chain management by keeping records more secure. Blockchain projects are created to is to incorruptible visualization of the supply chain process. Since data validation on a Blockchain network is virtually incorruptible so supply chain management focuses on a Blockchain network is a much-needed solution for today’s eCommerce. Blockchain network provide transparent supply chain so that customer can see their order flow and that will increase their trust on the vendor.
Internet is an ocean of data where a hacker can tamper with any customer’s data so that all the customer data will keep secure Blockchain stores data on centralized servers with Blockchain encoding where no online criminal can tamper with data. It’s impossible to attack a Blockchain-based e-commerce platform since they are decentralized, which means all customer data are decentralized. Blockchain-based e-commerce platforms are considered virtually safe.
This is considered a very big problem faced by very big vendors like Amazon or Flipkart that they cutting off the transparency between the seller and the buyer. But in a Blockchain-based eCommerce platform main key is transparency. eCommerce platforms can use Blockchain to transform their platform to another level.
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