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Some ecommerce platforms, including large organizations such as eBay and Amazon, are beginning to allow the use of digital currencies on their platforms. Today, we look at the blockchain technology that lies behind these currencies and speculate as to how it could shape the future of ecommerce.
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Bitcoin has been in the spotlight for quite a while now. In fact, online merchants and businesses are beginning to accept bitcoin and other cryptocurrencies as means of exchange. What’s more, thanks to crypto exchange development, anyone can send and receive cryptocurrencies anytime anywhere.
Companies and businesses around the world are now considering the use of cryptocurrencies and blockchain technology. They’re beginning to appreciate how this technology can help them maintain security. Moreover, they understand it will allow them to heighten their standards for supply chain management, payments, and data management. Basically, it will make them leaders in the marketplace.
One vertical in particular that is likely to be affected by blockchain technology is ecommerce. This internet-based industry has always struggled to achieve a high level of security and privacy without compromising transparency and customer convenience. Blockchain technology could be the solution they need.
Blockchain Technology Provides a Safe Payment Model
Crypto traders and investors already know how easy it is to transfer cryptocurrency assets. Most cryptocurrency projects use blockchain technology. This is why all you need is an internet connection and a blockchain wallet address to send and receive cryptocurrencies.
With blockchain technology, ecommerce platforms can better deal with fraudulent chargebacks. This is because the blockchain provides an irreversible transaction facility. Additionally, dishonest claims by consumers and other disputes become less likely.
Most ecommerce platforms use payment methods that involve third parties. This process can be time-consuming and expensive for sellers. But blockchain technology removes the need for a third party to confirm transactions. It also provides both seller and buyer a secure payment model.
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It Makes Transparent Order Fulfillment Possible
Most ecommerce platforms provide customers with details about their orders, beginning as soon as a customer places an order online. Moreover, the order fulfillment journey doesn’t end until the product has been delivered.
However, if an ecommerce platform is powered by blockchain technology, the level of detail can increase. Customers can track every step of the transaction. This provides complete transparency into all the actions performed by any of the parties. It is for these reasons that huge organizations and businesses are already using blockchain technology for the purposes of supply chain management and other business processes.
Blockchain Technology Offers Low Transaction Fees
As we mentioned earlier, many ecommerce platforms use payment methods that involve third parties. These entities usually ask for a transaction fee from both the ecommerce platform and the buyer, especially if it is an international transaction.
But if an ecommerce platform adopts blockchain technology, they can reduce these transaction fees. This is a win for everyone who is a party to the transaction. In these scenarios, blockchain technology establishes a peer-to-peer network. Then there is no need for a third party to confirm the transactions.
Decentralized Servers Minimize Fraud and Scams
Most ecommerce platforms store the information they collect from their suppliers and customers in centralized servers. The danger here is that even the largest ecommerce companies, including Amazon and eBay, have fallen prey to cyber attacks.
However, if companies store data on the decentralized servers that blockchains offer, their data is virtually impossible to hack into and misuse. When it comes to recording and storing data, blockchain technology offers a level of security that no other method has yet achieved.
Fast Transactions Are the Norm with Blockchain Technology
If an ecommerce platform is powered by blockchain technology, customers will enjoy the benefit of making online payments almost instantly. They will not have to wait for several hours or even days for payments to process. The order fulfillment journey can begin immediately.
Simply put, blockchain technology makes it easy to shop online. Users can make payments directly to the ecommerce business without having to wait for their bank to confirm the transaction. Once they have made the payment, the ecommerce store can ship the products they have ordered. Customers experience more shopping satisfaction and less inconvenience.
Blockchain Technology Minimizes Fraud
Blockchain is a powerful technology. Nonetheless, some blockchain platforms require a native digital currency to perform any action.
For example, Ethereum is a well-known blockchain platform. Its native cryptocurrency is ether. Users and developers must use Ether to perform actions on the Ethereum blockchain. But with a blockchain Ethereum wallet, users can read their balance, connect to applications, and perform transactions, right on the platform.
Moreover, blockchain technology can also help ensure that the products people are buying are authentic. Additionally, the technology makes it easy for sellers to track where the products are coming from. This helps prevent fraud and scams.
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Many industries can gain a wide array of benefits by using blockchain for their platforms. The technology helps businesses achieve more transparency, greater efficiency, and tighter security. All of these factors will help build trust between an ecommerce business and its customers.
Moreover, ecommerce stores will be better able to manage supply chain and payment processes. As blockchain eliminates the need for an IT team, as well as for a bank or a financial institution, this will also help in ultimately reducing costs and lead to higher profits and more satisfied customers.