An explosion occurred
in the already booming e-commerce industry as consumers shifted their focus and
spending from physical businesses to online marketplaces.
Global e-commerce
sales in 2014 came to roughly $1.34 trillion. Statista estimates that by the
end of 2020, this amount will increase to $4.2 trillion; by 2023, it will reach
over $6.5 trillion.
According to another
prediction, 95% of all purchases will be made online by 2040.
However, the
e-commerce industry is beset by several issues that limit its growth and
decrease its efficiency.
The good news is that
blockchain technology has made it possible to solve many of the problems
e-commerce businesses face.
Effects of Blockchain Technology That Are Good
Before we get into Blockchain E-commerce
Development Company, let's take a broad look at the most important characteristics
of distributed ledger technology.
Transactions are swift and reasonably priced.
The elimination of
middlemen via Ecommerce blockchain technology makes bitcoin transactions quick
and affordable.
Unlike exchanges for
digital currency, e-commerce platforms frequently impose a transaction fee of
2–6% on companies.
In addition to the
percentage-based fees related to online purchases, some payment processors may
charge set transaction fees or ongoing membership fees for maintaining an
account.
Highly Transparent and Honest Online Market
While a concern for
all merchants, a lack of transparency in business practices harms online shops'
success, even the most well-known online marketplace, Amazon, recently removed
a merchant's website without providing any explanation.
Blockchain technology
effectively monitors any fraudulent and immoral action by any business or
merchant because it is decentralized.
Therefore, blockchain
technology can make creating a reliable online marketplace for buying and
selling goods easier.
The Control of the Supply Chain
The structure of
businesses and other organizations engaged in producing and selling a product
is referred to as the "supply chain."
By utilizing supply
chains with various players, businesses can reduce costs and increase their
competitiveness. Because of this, any e-commerce company must have a strong
supply chain management system.
A supply chain
comprises numerous steps, including manufacture, delivery, and sale. In light
of this, the entire supply chain may compromise even if only one phase is
compromised.
Safer Environment
With distributed
ledger technology, consumer data and financial transaction records are more
secure in the cloud. The frequency of security breaches increases along with
the adoption rate of blockchain-based e-commerce systems.
Another important
advantage blockchain technology can offer to online shops is the capability to
accept cryptocurrency payments.
Chargeback prevention security measures
Internet retailers
have experienced chargeback fraud since the beginning of the sector.
While a client may
request a chargeback through their bank in various circumstances, a poll found
that 81 percent of consumers use this route out of convenience rather than
contacting the shop directly to request a refund.
Online businesses lost
$4.8 billion to friendly fraud, which entails starting a chargeback without
first getting in touch with the seller.
Customers who never
meant to make a transaction submit a different fraction of false chargebacks.
When the online store ships the items, they purchase and attempt to get their
money back by offering a chargeback.
The blockchain technological advances that have shown the most promise
1. Making use of tokens as a security precaution
There are many issues
with the ICO process, which has caused the market for utility tokens to stall.
The majority of investors accustomed to the IPO market do not see any profit
potential in ICOs because they have no real value and murky laws. Many individuals
only think about cryptocurrencies as short-term investments due to the danger
of market manipulation and low liquidity.
Security tokens were
offered as a solution to these problems affecting initial coin offerings
(ICOs). They combine the advantages of blockchain technology with the aid of
the stake concept, which they draw from the notion of programmable equity.
Compared to ICOs, they provide investors with more tangible benefits like
ownership and dividends. Because business owners are familiar with this idea,
it has the potential to change the IPO market by providing companies with more
liquidity, efficiency, and accessibility to capital Because business owners are
familiar with this idea, it has the potential to change the IPO market by
providing companies with more liquidity, efficiency, and accessibility to
capital Because business owners are familiar with this idea, it has the
potential to change the IPO market by providing companies with more liquidity,
efficiency, and accessibility to capital around-the-clock.
2.) Blockchain
Consortiums
The major objective of
such an organisation would be to promote cooperation amongst rival businesses.
As more people utilise a blockchain network, both the technical security and
the worth of the shared data increase.
3.) Stablecoins
A different kind of
token is being used to address the problems with the volatility of Bitcoin. It
blends cryptocurrencies' anonymity, security, and transparency withz the
consistency and dependability of traditional currencies. Their value and
stability are unaffected by changes in the market because they are pegged to a
specific amount of fiat cash.
4.) Hybrid Models
Because there are no
regulations or governmental backing for bitcoin transactions, there is less
trust in them. Many countries, including China and Ecuador, are looking into
launching their own cryptocurrency. However, because no country's central bank
backs these virtual currencies, their practical application is limited.
Despite the fact that
national fiat currencies typically have the upper hand, the best course of
action is to create a virtual link between the crypto and fiat sectors. Many
firms require the ease of the fiat-crypto conversion when growing their reach.
Hybrid models also show promise for real-world uses like voting and land
registries.
Although the majority
of B2C businesses have minimal issue adjusting to the online environment, B2B
businesses are sometimes slower to adopt digital innovation. They can benefit
from blockchain technology by making it easier to create complex ecosystems,
such B2B2C ones.
Recent attempts to
implement this concept have encountered a number of challenges. Decentralized
systems must have the necessary safeguards in place, such as a corporate
governance architecture that guarantees each participant in the ecosystem has
an equal vote in how the ecosystem is run, to prevent monopolisation. However,
failed initiatives might highlight areas that need improvement, opening the
door for more advancement the following year.
5.) Distributed Ecosystems Platforms
Although the majority
of B2C businesses have minimal issue adjusting to the online environment, B2B
businesses are sometimes slower to adopt digital innovation. They can benefit
from blockchain technology by making it easier to create complex ecosystems, such
B2B2C ones. Peer-to-peer transactions are powered by smart contracts, which
enable the connection of competitors and the development of new business
models.
Over the past few years, there have been a number of initiatives to put this theory into practise. Because of this, it's critical for these systems to have a corporate governance framework that guarantees equal rights for every member of the ecosystem. On the other hand, unsuccessful attempts can highlight areas that need improvement in the upcoming year.
