The blockchain is a revolutionary new technology that everyone is currently raving about. The hype predominantly stemmed from the connections cryptocurrency shares with blockchain technology, but also brought along with it a number of criticisms and confusions, commonly termed FUD (short for Fear, Uncertainty and Doubt) by the crypto community. However, the blockchain technology at its core is vastly different from cryptocurrencies. Blockchain is just the framework that enables multiple technologies to run over it.
What exactly is Blockchain?
Blockchain is a distributed digital ledger system that enables seamless and transparent transactions to take place over the network. This technology has several applications across varied fields like healthcare, education, economy, crypto trading etc. The main benefit of blockchain technology is the fact that it is virtually tamper-proof. All transactions on the blockchain network are recorded and verified using advanced algorithms, thereby providing complete transparency and ending any possible scope for corruption.
Blockchain for eCommerce
While eCommerce has sustained all these years with the use of closed proprietary code at the backend, enabling the blockchain technology on the platform can be a major positive driver, eliminating online fraud to a great extent. While the applications of this tech in the field of eCommerce are aplenty, let us take a look at some of the key characteristics.
A safe and protected environment
As mentioned earlier, every transaction made on the blockchain network is permanently logged. This reduces the chances of any kind of fraud, as every action is traceable back to the origin. These transactions contain details of the purchase, a time-stamp and additional data regarding the product and the customer.
While these transactions are immutable and permanent, there is a caveat. Each transaction, called a block, carried out on the blockchain marketplace is validated and verified across multiple nodes before being added irreplaceably to the existing chain. This eliminates the chances of unintended or fraudulent use.
Complete transparency for better accountability
The fundamental thought behind the blockchain project is to create a transparent network that can be verified publicly. This works out great in the case of online marketplaces as the customers generally tend to seek unbiased, concrete information, be it quantitative or qualitative.
As a cascading effect, this makes the sellers and merchants on the eCommerce platform more wary, competitive and accountable. Under such public scrutiny, the merchants tend to improve the quality of their products and services, helping the brand grow bigger.
Digital tracking that leaves a solid footprint
Perhaps the biggest benefit, and the one yet to be tapped to its full potential is that every transaction can be traced using a unique digital ID. This reduces the time and manual effort taken by the Customer Service Associates who deal with non-blockchain based platforms. This can also be used by record labels, artists, music producers and the like, to ensure that their creative content is not deleted, duplicated or tampered with.
While there may not be too many early adopters of the blockchain technology due to the entire fiasco surrounding cryptocurrency, there is a gradual but positive hike in the number of adopters. Shopping on a crypto-based marketplace ensures that the customer is more aware of what the product is and how it works. The feedback provided by the community is freely available. Also, this helps in faster turnaround times for complaint redressal.
Distributed hosting for revenue sharing
Another principle on which the blockchain tech runs is that the hosting is decentralized. While traditional eCommerce platforms rely on specific strategically located servers, blockchain marketplaces work on peer-to-peer basis, with regular integrity checks to curtail any fraudulent or questionable transactions made. As the servers are hosted by the users, the costs involved in blockchain marketplace are much lower than the non-blockchain ones.
Lower costs resulting in lower prices
In the absence of a centralized hosting server, the saved money can be used to reduce prices for the items and services, thereby providing the best rates for the sellers, producers and consumers as well. Similarly, due to the elimination of the intermediary in the selling process, the prices are further reduced. While this may be a loss to intermediaries such as payment gateways, it helps drastically cut down on costs, especially for lower priced goods and services.
Freedom of choice
When there are no third parties or intermediaries involved, it provides sellers the freedom to decide on what they feel is the best way to go about selling the product or service. There is scope for better and more competitive pricing, unrestricted by terms and conditions that are generally imposed by third parties. This ultimately helps them provide better customer experience.
Win-Win-Win for all
Unlike traditional marketplaces, in a blockchain marketplace producers do not pay in case their product is not purchased. Sellers too have the upper hand of being able to position and price their product the way they deem fit, benefiting from higher profit margins per sale. Most importantly, the customer gets to purchase the best products at the most competitive prices, thus making it a perfect solution for everyone involved!
The most defining aspect of why blockchain and eCommerce are a match made in heaven is the existence of smart contracts. These nifty little tools (or rather simply a piece of code within the blockchain network) allow parties to create contracts on any topic in the world. Much like an offline contract, all the caveats involved are valid and legally enforceable.
These smart contracts are programmed to run without external interference, generally coded on an If-Then model. Thus, these unbreakable smart contracts serve as a great means to facilitating online purchases with an added level of security. If you pay for something, you are sure to get what you ordered. And if a customer has ordered something, the seller is sure to get the money, thereby completing the transaction.
Trimpo Blockchain and eCommerce?—?A match made in heaven
As one of the leaders in blockchain and eCommerce, Trimpo (and effectively its stakeholders) stand to benefit from all the features mentioned above. We strongly believe that this is the way forward, a model that would inevitably be adopted by all marketplaces in the future. However, for the time being we lead the front as pioneers of a new revolution in eCommerce, enabling multitudes of small entrepreneurs to dream big!
Learn more about our journey at https://trimpo.org/.
To learn more about how we’re helping businesses establish thought leadership, DM on Twitter (harsh jaiswal).