Blockchain & Crypto in E-commerce

Businesses and e-commerce platforms today are more open to adopting blockchain technology and accepting cryptocurrencies on their platforms. There are several upsides to this in addition to heightened security and improved trust. Let's take a look at some of the advantages of utilizing blockchain and cryptocurrencies in e-commerce.

Why E-commerce Platforms Adopt Blockchain & Crypto

Trust

Blockchain provides a trustless execution environment. This means that trust is non-existent or not required, thereby ensuring its trustworthiness. Once an agreement is encoded within the blockchain, it is executed as such, without any deviations. Using blockchain technology, an e-commerce platform can improve user trust in their platform.?

Decentralized structure

Centralized structures are prone to failure due to their centralized architecture. When all of the platform’s information is stored in a central server, there is a higher chance of the platform being disrupted due to a functional or technical failure. This is averted in decentralized systems. Since decentralized systems distribute data across multiple servers, the platform built over such a network would retain its functionality even when some of the servers fail.

Transparency

Transactions on a blockchain, except for privacy-based blockchains, are transparent and can be viewed by all participants. This transparency can help build trust among users, as they can verify the authenticity of transactions and the provenance of products.?

Peer-to-peer Transactions?

Building a trustworthy marketplace that fosters direct interactions between buyers and sellers, free from intermediaries, has been a formidable challenge. Blockchain introduces transparency and directly connects buyers with sellers. Its integration allows businesses to facilitate peer-to-peer transactions, eliminating the need for third-party middlemen.

Improved Security and Privacy

In an era where data breaches and privacy concerns are on the rise, security is paramount. Blockchain's decentralized architecture ensures secure data storage across a distributed network, minimizing the risk of unauthorized access. Blockchains also have the advantage of privacy protection as users aren’t required to provide personal information such as an email address and can interact with the platform using their wallet address. This however, differs from platform to platform. While some may choose to not collect data, some might have this as an opt-in feature.?

Reduced Costs

Blockchains and cryptocurrencies, by eliminating the middlemen, help reduce the associated costs. By automating the processes involved in payment processing, conflict resolution, support as well as compliance, operational costs can be reduced. In addition to this, processing fees on most blockchains are miniscule compared to those on traditional payment platforms.

Speed

Blockchain/crypto transactions are significantly faster than regular transactions, enabling users to purchase products within minutes. This is the same for both intra and international transactions. Normal cross-border transactions require additional processing and verification time. With crypto, transactions are processed and verified quickly.?

Micropayments

Fiat transactions, due to the presence of intermediaries, require a hefty processing fee regardless of the amount of transaction while cryptocurrencies enable cost-effective micropayments, which can be useful for pay-per-use services or content, such as digital downloads, online articles, and in-app purchases.

Immutability

Immutability is the innate nature of a blockchain. Information once recorded cannot be deleted, modified or otherwise altered. Immutability grants users the ability to verify, dispute, and/or claim ownership of their purchases based on historical data, since this data is preserved on-chain in the form of a transaction and can be publicly viewed. (white the details of the transaction such as the purchased goods aren’t visible, anyone can verify that address (A) has transacted with address (B))

Data Ownership

On a blockchain-based platform, users have more control over their data and can choose to share it with businesses on their terms. This aligns with the growing emphasis on data privacy and ownership rights.

Reduced Fraud and Risk of Chargebacks

Oftentimes, in traditional payment systems, users are debited twice during their purchase. While refund is guaranteed, it often takes the payment processors around 5 to 7 working days. This is super-inconvenient in today’s fast paced world. Sometimes, there are false chargeback claims usually requiring additional verification and compliance procedures. Blockchain's immutability makes it challenging for fraudulent activities like chargebacks, counterfeit products, and double-spending to occur. This can save both businesses and customers from financial losses.

Smart Contracts

Smart contracts are self-executing contracts with the terms of the agreement directly written into code. They automate many aspects of the buying and selling process, such as payments and order fulfillment, reducing the need for intermediaries and potential disputes.

Anonymity

Depending on the kind of platform used, cryptocurrency transactions may offer a certain degree of privacy to its users. Completely decentralized platforms do not collect personal information while some platforms may choose to collect them to provide the user with a better user experience. If the platform used does not collect personal information such as an email address or mobile number from the user, then transacting with cryptocurrencies only shows that an address A has interacted with an address B.?

Streamlining Supply Chain Management

Managing complex supply chains in e-commerce, fraught with issues like counterfeiting and inventory management, is no small feat. Blockchain's decentralized ledger enables stakeholders to track and verify every step of the supply chain. This transparency ensures customers receive authentic products while reducing fraud and counterfeit goods.

Gift Cards

Another popular use of cryptocurrencies on e-commerce platforms include purchasing gift cards. Users can buy the gift card that corresponds to the product they want to purchase, with crypto, and then redeem the said gift cards while purchasing real world products.?

One such platform is Uquid, arguably the most popular and largest e-commerce platform to accept a number of cryptocurrencies, including Beldex. Visit Uquid to buy with BDX.

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