In this guide, Academy by CoinMarketCap looks at the features of blockchain that are making the operations of small-scale e-commerce businesses easier, faster, and cheaper. Read more!
Blockchain refers to a decentralized and digitally administered public ledger which exists over a network. It is used to record important data. With the increasing use of this technology in multiple virtual facets and its indispensable applicability, it is no wonder that it has made its way into e-commerce as well.
Blockchain in E-commerce
Within e-commerce, this phenomenal ledger provided by blockchain has multiple applications. It allows e-commerce business owners to both electrically and manually store and share digital assets, such as their product information and their customer’s data, with utmost security.
Furthermore, blockchain offers features to the world of e-commerce that allows both sellers and buyers to have seamless experiences with shopping and selling online.
How the Rise of Blockchain Impacts the E-commerce Industry
Blockchain and e-commerce are directly related. Offering vast benefits, its rise impacts the e-commerce industry in multiple ways, some of which are listed below.
Automation of Contracts
Blockchain technology introduces smart contracts, which are software programs that automate operations based on predefined parameters. Smart contracts help easily automate activities related to e-commerce since blockchains are used to store them.
They can help expand an e-commerce business by reducing the price of hiring employees to do jobs that computer systems can automate. Moreover, smart contracts can also make inventory management more accessible, meaning online sellers can keep track of their inventories.
Loyalty Programs and Offers
When online sellers use blockchain technology to operate their business, they can instantly provide their customers with redeemable loyalty points when they reach specified purchasing criteria.
These loyalty points may also be used across several e-commerce platforms, as part of a collaboration, or if a parent organization has multiple e-commerce websites. Furthermore, due to this technology, customers may now take advantage of customized offers and discounts from online businesses as well.
These reward programs can help e-commerce businesses gain more recurring clients and grow their products’ reach and profits.
Supply Chain Monitoring
Online retailers can reach their targeted business objectives and goals with the help of a dependable supply and distribution chain. This is because supply chain allows business owners to determine what products are on the way and when the products will arrive.
It assist business owners in evaluating the kind of items that suppliers are providing. When these business owners utilize blockchain technology to track their inventory, they have the option of prohibiting suppliers from swapping items and ensuring that the process is honest and transparent.
Influencer Outreach and Compensation
Influencers are vital to the development of e-commerce platforms, and their role should not be neglected. Paying social media influencers is among the many wonderful features that cryptocurrency offers for e-commerce businesses. Thanks to blockchain, influencers can earn digital tokens for producing and posting interesting content about these e-commerce platforms.
Business owners can use digital wallets to pay the influencers since virtual currencies like Bitcoin are easy to transfer. The influencers can then seamlessly change these virtual currencies to whatever currency they prefer.
Review Generation
Online business owners can use blockchain technology to validate customer reviews of their items and services. The validity of many product and service reviews on the internet is increasingly being questioned, with the legitimacy of a company's reviews greatly determining its credibility as a brand. This makes the usage of this technology by e-commerce owners incredibly indispensable.
The Upside of Blockchain Technology in E-commerce
Lower Transaction Costs
E-commerce companies can easily integrate stock control, transaction processing, marketing content, and other organizational processes using blockchain. They save money by not overspending on services that support these operations or paying IT support workers to manage the operations. Bitcoin and other cryptocurrencies reduce the costs that banks charge for handling transactions.
Vast Consumer Base
According to estimates, more than a 100 million people worldwide use cryptocurrency, thus proving that they have a vast consumer base all around the globe.
Cryptocurrency allows a business to reach countries that they previously could not, perhaps due to the inaccessibility or unavailability of payment methods in specific regions.
Reduced Risk of Fraud
When it comes to keeping up with market competition and growing customer demands, most online shops struggle. Aside from these difficulties, they are also vulnerable to cyber attacks, resulting in the leak of consumer data and loss of millions of dollars.
Cryptocurrency offers a reduced risk of fraud. By making use of distributed ledgers, the technology provides the highest possible level of protection and security for e-commerce data management.
Trading Boost in Third-World Countries
It is incredible how cryptocurrency enables third-world nations to trade online. Individuals and other clients in such nations don't need an intermediary to handle their payments because of the peer-to-peer mechanism that cryptocurrencies offers.
Moreover, blockchain technology is allowing internet retailers to tap into the consumer base in the developing world's marketplace, allowing trade to boost on both the buyer's end and the seller's end.
Final Thoughts
Vendors from all over the globe are flocking to e-commerce as a platform for their commercial ventures. With increasing acceptance and usage, blockchains are pioneering themselves as the foundation of online payment and sales. Not only do they support all e-commerce operations, but they are also way cheaper and faster that traditional methods.
The future is not rapidly approaching us; it is already here. The only way to equalize the market is to make financial and commercial transactions more transparent to the consumers. Blockchain aims to seize the power and hold of financial institutions in order to give citizens more authority over their purchases and transactions thereof.
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