Is Blockchain really effective when applied to E-commerce?
Digital transformation brings significant changes, interrupts many industries, and simultaneously creates breakthroughs that help some businesses grow and develop records. Many immense, established corporations struggle while new, small businesses are more resilient by adopting new business models. But the opportunity is still open to all. Currently, many startup projects are applying new technologies to achieve superior results compared to the common ground in the market. Blockchain is one of the core technologies chosen and is interested in many businesses, especially startups in the e-commerce industry. Is Blockchain really effective when applied to E-commerce?
The World Economic Forum (WEF) predicts that 10% of global GDP will be stored on Blockchain by 2025. That means international operators are preparing for this seismic shift and are ready to go fully ready in the next few years. The impact of blockchain technology is predicted to be as large or more significant than the internet revolution of the 1990s, thanks to today’s internet’s fast and powerful pervasive support. Although Blockchain has extensive applications in different industries, in all cases, the benefits of applying Blockchain technology are not much additional and are based on: transparency, immutability, redundancy and redundancy security. So how is Blockchain used for Ecommerce?
Thanks to its security characteristics and fast processing speed, the application potential of Blockchain in e-commerce is enormous. Currently, the most popular blockchain technologies used in e-commerce include Ethereum, which allows e-commerce businesses to manage their blockchains; and Bitcoin — the cryptocurrency that started the development of Blockchain and opened the form of payment in Bitcoin. Thanks to Blockchain, online financial transactions can become more secure. This is of great benefit to both buyers and sellers. Moreover, Blockchain also brings a lot of other positive values , including cutting transaction costs, improving business processes, making transactions faster and improving customer experience. Transaction and data issues are the biggest concern for e-commerce brands. According to PriceWaterhouseCoopers’ annual Global Economic Fraud and Crime Survey 2020, 47% of companies have experienced credit card fraud in the past 24 months, with a total loss of $42 billion. Blockchain enables identity authentication by multiple trusted parties and, at the same time, provides the highest level of security for customer databases and CRM.
One of the outstanding advantages of Blockchain is that it allows retailers to combine services such as payment processing, inventory management, product description, etc., thereby saving costs for purchases and maintaining separate governance systems. In addition, cryptocurrencies like Bitcoin can be sent from one user to another instantly, without going through the banking system. This reduces fees charged to banks for processing and redemption of funds or fees that credit card companies charge based on payments. Transactions are more straightforward because transactions on the Blockchain are processed instantly and without going through a traditional bank, so there are no delays in payment processing. Therefore, the purchase can be made immediately, and the order fulfillment speed also becomes faster.
Blockchain can store more information beyond transactions, typically intelligent contracts, which can automate tasks based on preset rules and if-then statements, like payments, automated accounting or inventory management. Blockchain can also store electronic records such as customer receipts and warranty information. Thereby making claims and warranty claims easier, not to mention saving on a massive amount of paper filings. Blockchain in the e-commerce supply chain means businesses can cut down on the manual work involved in shipping. Bill of lading information can be placed on the Blockchain at each stage of the supply chain, cutting administration time and costs and making batch tracking or verifying product and tonnage information easy for products with expiry dates or certificates of authenticity. Blockchain can guarantee the quality and validity of stock and ensure that customers receive products of equal value equal to what they paid.
For customers living in developing countries, using reliable banking systems is difficult. Thus, Blockchain and crypto allow them to bypass the middleman like banks to reach more e-commerce retailers. And most importantly, Blockchain allows future-minded businesses to penetrate emerging markets. Blockchain will enable brands to quickly issue reward points for redemption or discounts on business and partner websites. In addition, companies can also pay content creators or influencers, KOLs, with tokens (digital assets issued by blockchain projects), which can then be converted to currencies they want.
Although the technology is relatively new, the main reason the idea of bringing Blockchain into an e-commerce system is so popular is that it benefits both the seller and the consumer. The industry agrees that while the potential of blockchain technology is enormous, it is still in the development and testing stages. In the future, Blockchain is likely to become an integral part of the financial and e-commerce ecosystem.
Currently, Shopdi’s development team is perfecting the e-commerce platform, applying advanced technology of the 5.0 era to solve problems in the market. The first Blockchain-integrated e-commerce platform dedicated to high-end, high-quality goods, ensuring prestige — Shopdi is confident to succeed on the pioneering journey to bring E-commerce to new elevations.
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