What is Blockchain technology?
Blockchain is a digital digital ledger to track economic transactions. It is designed to record not only financial transactions but all who enter it. The best feature of a blockchain is possible to see the ownership of the user and the transactions they have done on the public system.
In addition, it also hides the user’s identity through strong cryptography. Cryptographic code decryption requires long and challenging calculations, thus, making it the safest way to transact money.
Challenges in the e-commerce sector
Blockchain technology changes the e-commerce industry by decentralizing control and cutting the existence of intermediaries from the landscape. However, before exploring the potential of Blockchain technology for the e-commerce industry, let’s explore the current challenges facing the e-commerce industry.
High Cost – One of the main pain points of the seller in the traditional e-commerce business model is the involvement of an intermediary, which eliminates a good share of money for every purchase. Sellers must pay transaction processing fees for settlement of each transaction.
Uncertain security – Buyer data protection is another major problem for this kind of business. This system needs to get the trust of their customers and must convince them that their personal and financial data is safe. The condition of the e-commerce industry currently fails to provide very easy security for users.
The time-e-commerce eater model includes an array of operations such as supply chains, logistics, payment gateways etc. To manage all e-commerce industry operations have to deal with these intermediaries every day. It spends a lot of time resolving the whole process.
How Blockchain will encourage the e-commerce industry in the future
Blockchain technology for e-commerce is boom for not only sellers but also for buyers. Some of the challenges that can be treated by introducing blockchains in the e-commerce industry are as follows:
Cost reduction – With Blockchain, the e-commerce industry can rely on Blockchain technology to manage inventory, payment processing, product database, and other business activities. This results in less expenses to maintain the system or hire a support team to defend it. Cryptocurrency is like Bitcoin, ripples etc. will reduce costs that third party institutions such as bank fees during transactions.
The threat of cyber – although using a secure transaction network, the e-commerce industry is always at risk of losing their customer data and money because of unwanted cyber attacks. Blockchain technology is the perfect solution for resolving this challenge. It provides the highest level of security by using the ledger distributed to manage the e-commerce database management system.
Quick processing – Blockchain technology for e-commerce releases intermediaries, labor and third party organizations from e-commerce models. It saves a lot of time consumed in the overall process starting from inventory management, to order placements to deliver on the step of the user door.
These challenges have disrupted the seller from the start. Thus, integrating blockchain technology to the e-commerce sector can certainly be a good idea for the whole system. This is the need for blockchain technology for the e-commerce industry that is able to complete all challenges.
Many e-commerce companies have begun to invest in Blockchain technology to run their business smoothly. It was not far away when Blockchain technology would penetrate the entire e-commerce industry.