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 exists in it. The best feature of Blockchain is that it allows a public overview of the possessions and transactions they have performed through the system.
Moreover, it also disguises the identity of the user through powerful cryptography. Deciphering cryptographic code requires a long and challenging budget, which makes it the most secure way to transfer money.
Challenges in the e-commerce sector
Blockchain technology is transforming the e-commerce industry by decentralizing control and cutting the existence of intermediaries from the landscape. But before we explore the potential of Blockchain technology for the e-commerce industry, let’s explore the current challenges facing the e-commerce industry.
- High costs- One of the main torments of retailers in the traditional e-commerce business model is the involvement of an intermediary who takes a good chunk of money with every purchase. The seller must pay a transaction processing fee to complete each transaction.
- Insecure security- Customer data protection is another key concern for such businesses. The system needs to gain the trust of its customers and must convince them that their personal and financial information is secure. The current state of the e-commerce industry does not provide users with reliable security.
- It takes time The e-commerce model includes a range of operations such as supply chain, logistics, payment passes, etc. To manage all these operations, the e-commerce industry must deal with these intermediaries on a daily basis. It takes a lot of time to complete the whole process.
How Blockchain will lead the e-commerce industry in the future
Blockchain technology for e-commerce is booming not only sellers but also buyers. Several challenges that can be addressed by introducing Blockchain in the e-commerce industry are the following:
- Cost reduction- In addition to 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 spending on system maintenance or hiring IT support teams to maintain them. Cryptocurrencies like Bitcoin, Ripple, etc. It will reduce 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 data and money to its customers due to unwanted cyber attacks. Blockchain technology is the perfect solution to address these challenges. Provides the highest level of security by using distributed books to manage e-commerce database management systems.
- Fast processing- Blockchain e-commerce technology removes the dependence of intermediaries, the workforce and third organizations on e-commerce models. It saves a lot of time spent in the entire process, from inventory management, to placing orders to step-by-step delivery to the customer’s door.
These challenges plague sellers from the start. Therefore, integrating Blockchain technology into 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 that is capable of solving all the challenges on its own.
Many e-commerce companies have already started investing in Blockchain technology to run their business smoothly. Not far off is the day when Blockchain technology will penetrate the entire e-commerce industry.