There are several advantages for sellers and buyers when blockchain technology is used in online retail. Stakeholders benefit from a streamlined experience across many processes at once. Let’s take a look at the many advantages that come with building a blockchain eCommerce platform.
Better Safety Measures
Blockchain’s inherent security makes it superior to all other current methods. There is zero chance of a breach or harmful action with client data on blockchain digital ledgers. When customer data is kept on the blockchain, the customer retains full ownership. Customers can select which businesses they want to share their data with.
Phishing attacks may negatively impact users’ trust in eCommerce platforms. Here, hackers steal users’ credentials and use them for various fraudulent activities, including but not limited to online fraud, the sale of fake goods, and illegal cross-border purchasing.
To a large part, blockchain facilitates the regulation of such fraudulent actions. All transactions on the platform are guaranteed to be legal and transparent thanks to the immutable ledger of activity.
The Originality of the Product
The merchant’s product description gains credibility because altering or removing data from the distributed ledger will be difficult. Additionally, supply chain visibility improves product validity for end users. Users can have faith in the merchant’s stated product details while purchasing.
There are no go-betweens
Blockchain technology functions to do away with any middlemen. The customer’s information is sent to the retailer, and the purchaser’s payment is made to the vendor. It completely revamps the procedure’s safety while also increasing its speed. Both the payment and the refund can be processed in seconds.
Improved Package Tracking
Logistics plays a crucial role in online retail. Inefficient inventory tracking has caused major issues for retailers and platforms that depend on outside delivery services. In this use case, blockchain works its magic by improving logistics tracking so that one can readily determine where a package is at any given time.
The use of Blockchain technology in online retail in real time
Well-known e-commerce sites already use blockchain technology to improve their customers’ shopping experiences. Check out these real-world examples:
Blockchain Overseen by Amazon
We can only talk about online marketplaces by mentioning Amazon at some point. The platform is widely regarded as the market standard due to its cutting-edge features and widespread adoption. The company has consistently pushed to improve the efficacy of online purchasing through AR/VR for a better customer experience or the usage of blockchain in the supply chain.
The company has known for some time that tracking and tracing are problematic since customers want more information about where their package is. The current supply chain is cumbersome since it relies on paper documents and separate data silos.
As a result, Amazon is preparing to implement Blockchain technology throughout its supply chain. The consumer can view the status of their order at any time, including during the production process. All parties involved will use the digital ledger, including suppliers, manufacturers, regulators, logistics providers, wholesalers, retailers, and consumers. This means there will be no one in charge of the operation. Instead, each participant will share the most recent data available regarding the product. This means the customer has unfettered access to the product’s whereabouts in real-time.
Libra Cryptocurrency to Be Presented by eBay
eBay has been a mainstay of the online marketplace for decades, releasing upgrades regularly. As of late, the company has begun working closely with the Libra Association in preparation for the widespread launch of Libra Cryptocurrency. The new digital money is anticipated to be used for various transactions on various platforms.
The company’s goal with Libra Cryptocurrency is to create a widely recognized and secure digital currency that can dramatically improve shopping experiences. As a result of the implementation of this cryptocurrency, consumers will have access to products offered by vendors located all over the world, and they will be able to pay for those products in the currency of their choice. Additionally, the transaction cost will be a small fraction of what it is today, making the deals more lucrative for the companies involved.
The Problem with Using Cryptocurrency in Online Shopping
Blockchain is still in its infancy, but it has the potential to improve the capabilities and operations of eCommerce transactions greatly. The use of cryptocurrencies in online shopping faces many obstacles. Among the many difficulties we face now are:-
Only when blockchain is supported by all parties involved in a process can its efficiency be fully exploited. To illustrate, let’s say a consumer requests order tracking in real-time. Suppliers, manufacturers, warehouse managers, wholesalers, and retailers must then update their blocks on the blockchain with the new data. But the widespread use of blockchain technology is just starting; it has a ways to go. If the technology is widely adopted, it can provide its benefits.
The Soaring Price of Blockchain Technology
If the company’s owner is unwilling to make a sizable financial investment, there will be no way to deploy blockchain technology. Although some blockchain solutions are free, investing in the training and experience of software engineers who can build blockchain applications is essential.
While Ethereum can handle 15-20 transactions per second, Bitcoin can only handle 3-7. Therefore, blockchain’s speed must be improved through widespread adoption before it can be applied in large-scale organizations. A significant barrier to the widespread deployment of blockchain technology in the electronic commerce sector is that it can only support so many users at once.
Legislation and rules
There has been considerable unfavorable press about cryptocurrencies in particular industries, and some countries have even banned or restricted their use. Many nations have outright outlawed Bitcoin, while others have attempted regulation with mixed results. Therefore, substantial changes must be made to these regulations and legislation before eCommerce can become a global idea.
Low Availability of Labor
The need for qualified individuals has increased by 300% as awareness of NFTs and blockchain grows. The scenario has created difficulties in the labor market. Companies are competing fiercely for top personnel, with some offering yearly salaries of over $1 million to entice qualified candidates. The deployment process is already complicated by the need for more available blockchain professionals.
Lack of standards, interaction with legacy systems, interoperability, crucial privacy problems, etc., are challenges and hurdles in using blockchain in eCommerce.
Blockchain’s Possible Future Role in Online Shopping
The blockchain market is valued at $4.982 billion in 2021 and is projected to grow to $67.385 billion by 2026. The numbers indicate a CAGR of over 68.4% over 5 years. Undoubtedly, the business world is becoming more acquainted with the blockchain concept, which is being utilized to transform the user experience. This means that –
As a result of its decentralized nature, blockchain technology will play a pivotal role in the future of customer data storage and sharing.
Cryptocurrencies may find wider use because it may be used as a form of payment anywhere in the world and doesn’t require an intermediary.
Blockchain technology might be implemented for package monitoring and tracing, allowing for constant updates on where a package is at any given time.
Since blockchain verifies the legitimacy of the data, consumers will feel more secure making high-priced purchases on the web.
With blockchain technology in place, the time it takes to make payments and get refunds will rapidly reduce.