What is Blockchain?
Blockchain is a technology used to store and transmit data on transactions conducted on the internet. Information is stored in a sequence of blocks, one after another, and once one block of information is full, another is formed, which creates a chain. The same copy of this “ledger” is dispersed throughout the network in a peer-to-peer fashion, without a centralized authority or management system. Each computer connected to the network is allowed to transmit and verify the data. Once the data is written, it cannot be modified. If someone was to tamper with historical information, the procedure will be ignored. Such modifications are detected and rejected by other members in the system, ensuring the integrity and validity of the chain – after all, each member is supposed to have the same copy of the data. Combined with cryptography, this makes Blockchain one of the safest forms of data storage and validity confirmation, and the technology is already applied in various areas – cryptocurrency, finances, energy, administration, accounting, Internet of Things, voting systems, transportation, identity confirmation, data storage, gambling, databases, tracking of luxuries, government services (taxes, registers, etc.) and more. Blockchain has quickly become one of the pillars of FinTech and InsurTech. In this short introduction to the topic, we will have a closer look at what Blockchain does for e-commerce.
Blockchain use in e-commerce
There are a number of advantages of using Blockchain in e-commerce:
1. Improved security – as mentioned before, data stored and transmitted using this technology cannot be manipulated or deleted as it is constantly verified by other members in the system and rejected if any discrepancies are observed. This maximizes the protection of consumer sensitive information – personal details, credit card info, delivery addresses, etc., and it also ensures the security of transaction history as historical information cannot be tampered with.
2. Supply chain monitoring – blockchain makes it possible to monitor even the most complex supply chains at an unprecedented level. Every participant of the network – the seller, buyer, vendor, etc. – can quickly access necessary information, communicate with others and monitor processes in detail. There are no intermediaries in the process and the openness helps build trust between all members of the network. Product information and authenticity can be verified at every stage of its life and the ease of access for all interested parties greatly facilitates communication between everyone involved in the supply chain.
3. Secure payments – since the technology is also so strongly associated with cryptocurrency, this payment method can be added to any business, which eliminates the need for any middleman – be it a bank or a payment processor. This accelerates the payment process and can significantly reduce costs for both sellers and consumers. Icoholder has created a list of over 250 companies that accept Bitcoin payments, some of them are well-known brands (including some BMW dealers and Fidor Bank based in Germany)
4. Digital product market – Blockchain also makes it possible to trade digital products, such as unique virtual game items and other one-of-a-kind digital goods.
Blockchain has quickly become one of the most important solutions wherever data integrity and protection are critical. Users do not have to worry that the data in the chain has been tampered with in any way, as there is no central authority and the information is quickly verified by other parallel parties involved in the chain. Recognizing the safety, versatility and high quality provided by blockchain, big companies, start-ups, as well as governments of several countries continue to invest a lot of resources in this technology, quickly pushing us towards a Blockchain revolution.