How to Apply Blockchain Technology to E-commerce


How to Apply Blockchain Technology to E-commerce | How does blockchain technology work? | A distributed digital public ledger called blockchain can be used to monitor corporate activities.

How to Apply Blockchain Technology to E-commerce. It is intended to record all activities, including financial transactions. The best aspect of a blockchain is that it makes it possible for users to view their holdings and the transactions they have made on the network in public.

Furthermore, it conceals a user’s identity using robust cryptography. Due to the lengthy and challenging computation required to decrypt the cryptographic code, it is the safest method of trading money.

E-commerce Sector Challenges

Blockchain technology is revolutionising the e-commerce industry by decentralising control and getting rid of the need for middlemen. Let’s first look at the challenges the e-commerce market is now facing before exploring the potential of Blockchain technology.

  • High Costs: One of the main drawbacks of a seller in the conventional e-commerce business model is the presence of a middleman, who deducts a sizable portion of the proceeds from each sale. The Seller shall pay the Transaction Processing Fee for each completed Transaction.
  • Uncertain Security: Another major risk for these kinds of enterprises is the protection of customer data. Customers need to feel confident using the system, and it needs to reassure them that their financial and personal information is secure. The status of the e-commerce sector today prevents users from receiving failsafe security.
  • E-commerce models require a variety of processes, such as supply chains, transportation, payment gateways, etc., which take time. The e-commerce sector must engage with these intermediaries on a daily basis to manage all of these processes. The entire procedure requires a lot of time to complete.

How Blockchain Will Shape E-Commerce in the Future

Blockchain technology is revolutionising e-commerce, benefiting both customers and merchants. Here are a few issues that the use of blockchain in the e-commerce sector can help with:

How to Apply Blockchain Technology to E-commerce

Cost reduction – The blockchain technology allows the e-commerce sector to use it to manage inventory, payment processing, product databases, and other commercial operations.

  • As a result, it costs less to maintain systems or hire IT support teams to do so. The expenses imposed on transactions by third parties like banks would be reduced by the usage of cryptocurrencies like Bitcoin, Ripple, and others.
  • Cyberthreats: Despite utilising a secure transaction network, the e-commerce sector is constantly at risk of losing the personal information and money of its customers owing to malicious cyberattacks. Blockchain technology offers the ideal answer to these problems. By using distributed ledgers to administer the e-commerce database management systems, it offers the highest level of security.
  • Fast processing—Blockchain technology is freeing the e-commerce paradigm from the reliance on middlemen, labour, and outside organisations. It reduces the amount of time needed to complete the entire process, which includes maintaining inventory, placing orders, and delivering products to customers’ doorsteps.

A Brief Introduction to Blockchain for Ordinary People

Crypto-what?

It’s fair if the technical language that’s usually used to describe this mysterious blockchain technology made you squirm in dread if you’ve tried to learn more about it. So let’s first talk about what blockchain is before we explore what a cryptocurrency is and how blockchain technology may alter the course of history.

A blockchain, in its most basic form, is a digital version of the ledgers that have been used for hundreds of years to record sales and purchases. In fact, this digital ledger records debits and credits between parties in a manner that is basically identical to that of a conventional ledger. Who manages the ledger and who verifies transactions is the primary difference between this and blockchain.

In conventional transactions, a payment from one person to another must be made through some sort of middleman. Let’s say Rob wishes to send Melanie £20. He can either give her cash in the shape of a £20 note or send the funds electronically to her bank account via a banking app.

How to Apply Blockchain Technology to E-commerce

Rob’s funds are either validated by the app when he makes the digital transfer or they are verified by the bank as the middleman when he withdraws cash from a machine. The bank determines whether the transaction should move forward.

Every time Rob pays someone or receives money into his account, the bank is exclusively responsible for maintaining the record of all transactions that Rob has performed.In other words, the bank, which both owns and maintains the ledger, is the point of entry for everything.

That’s a big responsibility, so Rob needs to believe he can trust his bank; otherwise, he won’t put his money at risk with them. He must have confidence that the bank won’t defraud him, take his money without his permission, be robbed, or disappear without a trace. 

This desire for trust has been the driving force behind almost all significant behaviours and aspects of the monopolistic financial sector. Even after it became clear that banks were mismanaging our money during the 2008 financial crisis, the government (yet another intermediary) decided to save them rather than take the chance of shattering the last vestiges of faith by allowing them to fail.

Blockchains function uniquely in one important way: they are completely decentralised. No one institution maintains a central ledger, and there is no central clearing house like a bank. Instead, the ledger is dispersed throughout a vast network of computers, or nodes, with a copy of the entire ledger kept on each one’s hard disc.

Peer-to-peer (P2P) clients, which synchronise data across the network of nodes and ensure that everyone has the same version of the ledger at all times, are used to connect these nodes to one another.

Before new transactions are added to a blockchain, they are encrypted using contemporary cryptographic technology. A block, which is essentially just an encrypted collection of new transactions, is created once the transaction has been encrypted. The network of computer nodes is then informed of that block via broadcast (or sending).

How to Apply Blockchain Technology to E-commerce

The block is added to the end of the ledger on each computer after being validated by the nodes there and then transferred through the network once verified. below a list of all earlier blocks. Because of its chain, the technology is referred to as a blockchain.

The transaction can be finished once it has been approved and recorded in the ledger. Bitcoin and other cryptocurrencies work in this way.

Accountability undermines trust.

How is this system better than one that relies on banking or central clearing? Why would Rob choose Bitcoin over fiat money?

The solution is faith. Rob must have confidence in his bank to handle and secure his money appropriately, as was previously mentioned, in order for the banking system to function. To make sure this happens, there are extensive regulatory procedures in place to monitor the actions of the banks and make sure they are appropriate for the task at hand.

Then, governments exert control over the regulators, creating a system of restrictions whose sole purpose is to help thwart mistakes and improper behaviour. In other words, the Financial Services Authority and similar organisations exist because banks cannot be trusted on their own.Additionally, as we have all too frequently seen, banks routinely act badly and make mistakes.. 

The likelihood of abuse or misuse of power increases when there is just one source of authority. People’s confidence in banks is shaky and unsteady; we don’t really trust them, but we don’t see many other options, either.

Contrarily, blockchain-based systems don’t require any level of your trust. There is no single point of failure and no single approval route in a blockchain because all transactions (or blocks) are validated by the network nodes before being added to the ledger. 

To successfully alter the blockchain’s ledger, a hacker would need to simultaneously break into millions of machines, which is virtually impossible. A hacker would typically be unable to knock down a blockchain network because, once more, they would need to be able to take down each and every computer in a network of computers dispersed over the world.

How to Apply Blockchain Technology to E-commerce

Another crucial element is the encryption procedure itself. Blockchains like the Bitcoin blockchain utilise consciously challenging techniques for verification. 

In the case of Bitcoin, blocks are verified by nodes completing a sequence of calculations that are purposefully time and processing intensive, frequently in the form of puzzles or challenging mathematical problems, making verification neither instance nor accessible.Nodes that dedicate their resources to block verification are rewarded with a transaction fee and a bounty of recently minted Bitcoins.

Because processing blocks like these need rather strong computers and a lot of electricity, this serves the dual purpose of encouraging individuals to become nodes and managing the process of generating, or minting, units of the money. 

Mining describes this process since it requires a lot of labour (in this case, performed by a computer) to produce a new commodity. Additionally, it means that transactions are validated in the most unbiased manner imaginable, one that is more unbiased than a body subject to government regulation like the FSA.

Blockchains can function without the need for regulation (they are self-regulating), government, or other opaque intermediaries because of their decentralised, democratic, and highly secure nature. They function rather than in spite of the fact that individuals lack trust in one another.

After you give that some thought, the frenzy surrounding blockchain will begin to make sense.

Sensible contracts

The use cases for blockchain that go beyond cryptocurrencies like Bitcoin are where things start to become really interesting. The secure, independent verification of a transaction is one of the guiding principles of the blockchain system, thus it’s simple to think of further applications for this kind of procedure. 

It should come as no surprise that there are numerous such applications, both in use and under development. The best examples include:

  • Smart contracts (Ethereum) are blocks that contain code that must be performed in order for the contract to be honoured. Smart contracts are arguably the most fascinating blockchain development since Bitcoin. The code can be anything as long as a computer can run it, but put simply, it means that you can utilise blockchain technology to build an escrow system for any form of transaction thanks to its independent verification, trustless architecture, and security. A contract that checks to see if a new client’s website has been released or not, and then automatically releases the payments to you after it has, may be created, for instance, by a web designer. No more charging or seeking leads. Smart contracts can also be used to prove ownership of items like artwork or real estate. This method has great promise for reducing fraud.
  • Cloud storage (Storj): Cloud computing transformed the internet and ushered in the era of Big Data, which in turn sparked the current AI revolution. But most cloud-based systems are run by servers located in single-location server farms that are owned by a single corporation (Amazon, Rackspace, Google etc). Due to the fact that your data is managed by a single, opaque organisation that acts as a single point of failure, this offers all the same issues as the banking system. When data is distributed on a blockchain, the trust issue is fully gone, and reliability is also anticipated to improve because it is so much more difficult to bring down a blockchain network.
  • Identity theft and data protection are two of the current era’s main problems with digital identification (ShoCard). The potential for misuse of our personal information is concerning, especially in light of the vast amounts of information that large, centralised websites like Facebook already have on us and the aspirations of many industrialised nations to compile digital information about their citizens in one place. By encapsulating your essential information in an encrypted block that can be validated by the blockchain network whenever you need to establish your identity, blockchain technology offers a potential solution to this problem.This can be used for many things, including the obvious replacement of passports and identification cards as well as other things like password changes. It might be really large.
  • Digital voting has long been thought to be inaccurate and extremely susceptible to fraud, making it a hot topic in the wake of the investigation into Russia’s interference in the most recent U.S. election. While preserving the voter’s privacy, blockchain technology makes it possible to verify that a vote was sent successfully. As people will be able to vote on their mobile phones, it promises to both decrease election fraud and increase overall voter turnout.

How to Apply Blockchain Technology to E-commerce

Blockchain technology is still extremely young, and the majority of the applications are far from being adopted by the general public.Extreme volatility is a reflection of how new blockchain technology is because it affects even Bitcoin, which is the oldest blockchain technology. But blockchain is a really appealing and fascinating technology to watch since it can tackle some of the most important concerns of our time. I’ll make sure to look out for you.

How Blockchain Can Strengthen Marketing Plans

The development of blockchain technology has accelerated significantly. Blockchain technology was only used for cryptocurrencies at the time Bitcoin was introduced. These days, more industries are looking into the benefits of this technology. Marketing is one industry from which blockchain has really benefited. Technology is now resolving significant issues that the marketing sector has been facing.

Every business wants to have a strong online presence in the extremely competitive digital market of today. As a result, businesses want to ensure that their marketing plans are solid. At this point, blockchain technology has the potential to alter the marketing and advertising industry. The majority of programming languages, including C/C++, Java, Python, Solidity, etc., can be used to create blockchains. On Hackr.io, you may find the top programming lessons as recommended by the community if you’re wanting to learn these languages. Here are some of the top tutorials for learning Java, for instance.

To learn more about blockchain and develop a thorough understanding of it, one may always resort to a number of online tutorials. Continue reading to learn more about how blockchain may improve marketing.

Knowledge of Blockchain

A database can be compared to blockchain. Blockchain is made up of several blocks that are connected to one another in a chain. Information is kept in each block. In a peer-to-peer (P2P) network, the data contained in these blocks can be distributed to the desired users.

Cryptographic methods are used to safeguard blockchain to stop unauthorised parties from tampering with the data. The algorithms used to store the data in the blocks are consensus-based. This indicates that users are not permitted to change, delete, or add material to the blocks once it has been mutually agreed upon to store it.

Any time a transaction is carried out, whether it involves a contract, an information exchange, or the exchange of money, it is done in blocks. A permanent digital record is created after the block has been validated by all users connected to the P2P network. The block is completed and then added to the chain.

How to Apply Blockchain Technology to E-commerce

Blockchain technology has made everything completely transparent and auditable. It does not have a single point of authority or control, nor does it have a single point of failure. As a result, transactions carried out utilising this technology are completely secure and open.

Bitcoin and the Marketing Sector

Blockchain technology has changed the marketing industry of today. Here are a few ways that blockchain could enhance your marketing strategies:

1. Finding and Grasping the Correct Audience

Despite having access to consumers’ behavioural data, the majority of online advertisers hardly ever succeed in targeting the proper customers. The majority of marketers still pay exorbitant charges to advertising middlemen despite having access to a wealth of consumer data. Despite their best efforts, they are still unable to connect with and engage the desired audience.

How to Apply Blockchain Technology to E-commerce

Blockchain is useful as a practical method for reaching the proper audience with an advertisement. Blockchain develops a decentralised search engine that makes it simple for marketers to connect with their target market. Target users who provide advertisers their personal data can also be compensated with tokens because of blockchain technology. They get compensated each time someone clicks on an advertisement. Only the proper audience is targeted and engaged since people only view the advertisements they express interest in.

2. Keeping ad fraud at bay

Ad fraud is a serious issue for marketers and advertisers that is only getting worse. Today, buying phoney impressions and clicks is a popular practice. Ad fraud alters analytical data as a result, which affects marketing strategies and choices.

Blockchain technology enables the real-time display of clicks on advertising platforms. Additionally, it helps marketers by bringing in quality traffic and renting out their advertising platforms.By validating clicks in this way, ad fraud is prevented.

3. Designing Loyalty Programs and Reward Systems

When customers feel unique, they never forget. Because they make customers feel unique, loyalty programmes are effective for increasing sales. Blockchain technology has the potential to give customers an unforgettable experience. A secure platform for managing and distributing loyalty programmes and gift cards can be created on blockchain by attaching gift cards.

Customers will have a bad experience with the brand if they acquire gift cards but are unable to use or redeem them.Blockchain technology can be used to convert gift cards into digital wallets or currencies, making it easier for consumers to use or redeem them.Gift cards and discounts can also be used in conjunction with one another. This idea can help companies cut their marketing costs by thousands of dollars.

4. Data gathering and crowdsourcing

For marketers, good data is incredibly powerful. The majority of marketers are still unable to obtain precise and high-quality customer data despite using a variety of marketing methods and dozens of marketing tools. The only people who can supply reliable statistics are the customers themselves.

However, how can a marketer persuade consumers to provide their data? In order to motivate users to submit their data, crowdsourcing and blockchain come in handy in this situation. It benefits both parties because they receive pay in exchange, creating a win-win scenario. The information gathered is highly authentic and relevant in this way.

5. Decentralising online shopping

The use of blockchain is decentralising internet retail. The technology can be used by marketers to create decentralised marketplaces where suppliers can sell their products directly to customers without having to pay for the use of expensive third-party platforms.

6. Using influencers

Consumers are more likely to believe what other consumers have to say about a brand than what a marketer may assert. Utilising influencer marketing is now possible because of blockchain. Marketers can verify influencers’ identities, confirm their followers, and receive a return on investment thanks to blockchain technology.

7. Doing away with the necessity of middlemen

Financial transactions through banks are necessary since marketing includes money. With the help of digital wallets provided by blockchain technology, bank-mediated transactions are no longer necessary. Blockchain ensures that transactions go smoothly and lowers the costs associated with doing business with banks, which serve as middlemen.

How to Apply Blockchain Technology to E-commerce

Marketers need to find novel approaches to strengthen their marketing strategy as the competition in the digital world intensifies. Blockchain technology has already shown to be a powerful tool for enhancing marketing campaigns. In spite of the fact that this technology is still relatively new in the marketing world, it is quickly replacing other marketing tools like Google ad banners and pay-per-click. By fostering a transparent, genuine, and safe client experience, realising its full potential can undoubtedly help markets.

Conclusion

The sellers have been bothered by these issues from the beginning. Therefore, incorporating Blockchain Technology into the e-commerce industry can be beneficial for the entire system. Now the e-commerce sector needs a technology like Blockchain that can handle all the problems by itself.

For the smooth operation of their businesses, many e-commerce companies have already begun to invest in Blockchain technology. The e-commerce sector as a whole will soon be affected by Blockchain technology.

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