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 everything that goes into it. The best feature of a blockchain is that it allows you to publicly view user participation and transactions made on the system.
It also hides a user’s identity through powerful cryptography. Decrypting the cryptographic code requires a long and challenging calculation and therefore becomes the safest way to channel money.
Challenges in the e-commerce sector
Blockchain technology is transforming the e-commerce industry by decentralizing control and cutting the existence of the intermediary 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 problems for a seller in a traditional e-commerce business model is the involvement of an intermediary, who deducts a good chunk of money from each purchase. The seller must pay a transaction processing fee to complete each transaction.
- Secure security- Buyer data protection is another key concern in these types of businesses. The system needs to gain the trust of customers and ensure that their personal and financial data is secure. The current state of the e-commerce industry is failing to provide users with perfect security.
- Time consuming The e-commerce model includes operations such as supply chain, logistics, payment gateways, and so on. To manage all these operations, e-commerce has to deal with this means on a daily basis. This consumes a lot of time to complete the whole process.
How Blockchain will drive the e-commerce industry in the future
Blockchain e-commerce technology is on the rise not only for sellers but also for buyers. The following are some of the challenges that Blockchain may face when entering the e-commerce industry:
- 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 makes it less expensive to hire IT support teams that maintain or maintain the system. Cryptoconferences like Bitcoin, Ripple, etc. will reduce the fees that third parties like banks charge for transactions.
- Cyber Threats- Despite the use of a secure transaction network, the e-commerce industry runs the risk of losing data and money to customers due to unwanted cyberattacks. Blockchain technology is the perfect solution to solve these challenges. It provides the highest level of security using distributed books for managing e-commerce database management systems.
- Fast process- Blockchain technology for e-commerce is removing the dependency of intermediaries, employees and third parties from the e-commerce model. It saves a lot of time consumed in the overall process from starting inventory management to delivering orders to the user portal.
These challenges have bothered vendors from the beginning. Thus, integrating Blockchain Technology into the e-commerce sector may be a good idea for the entire system. Here comes the need for Blockchain technology for the e-commerce industry, which is capable of solving all challenges alone.
Many e-commerce companies have already started investing in Blockchain technology to make their business work well. It’s not far off the day when Blockchain technology will penetrate the entire e-commerce industry.