Eligma meets blockchain: the hows and the whys
Blockchain. The magic word. A technology that some say will affect our lives even more profoundly than the Internet itself. While no one knows if that will actually be the case, we at Eligma are its passionate advocates and believe that it will be a big part of the future.
For starters, it will enable us to develop some of Eligma’s major features:
- unchangeable and transparent inventory records;
- decentralised second-hand product sales;
- the ELI token;
- loyalty program.
A lot of ink has been spilt over blockchain, smart contracts and other related definitions. Since I do not want my article to span dozens of pages, I will just give a few short descriptions and point you in the right direction, where you can find more information.
A blockchain is a continuously growing list of records called blocks, which are linked and secured using cryptography. Each block typically contains a cryptographic hash of the previous block, a timestamp and transaction data. You can find a more detailed explanation here and a great overview in layman’s terms here.
A smart contract is simply a piece of code on the blockchain that performs an action once certain criteria are met. It eliminates the need for a trusted third party since it executes automatically when both parties confirm that the terms have been met. Again, you can find more information here and a great introductory graphic for beginners here.
We believe that Eligma and its users will greatly benefit from these technologies. Eligma’s three pillars — AI-driven discovery, blockchain-based inventory and the ELI token-powered loyalty — will allow quick discovery of best offers, safer inventory keeping and a unified loyalty program for all users and retailers on the platform.
This architecture represents the best of two worlds: we can harness the transparency and safety of both our sidechain and the Ethereum blockchain and, at the same time, avoid the transaction fees of the latter by only storing hash values there.
Blockchain-based inventory
As the above image shows, our Inventory pillar is based on a sidechain solution (a sidechain is a blockchain ledger that runs in parallel to the primary blockchain). Inventory will encapsulate DIPs (digital item profiles) with different records regarding products. This will include products that our users purchased and were added to the inventory automatically, and products that users added manually.
While we could organise this data in the form of a regular database, we want to make it safer and more transparent for our users. For this purpose, we will be storing DIPs into a publicly accessible sidechain where all the transactions related to DIPs will be ordered into a transparent non-alterable ledger of blocks. These blocks will be assigned hash values, which will be entered into the Ethereum blockchain. In this way, everyone will be able to check that the sidechain blocks were not changed since the moment of their creation. This will ensure that the product data available to our users on second-hand listings is up-to-date and correct. Our sidechain will be accessible by other web and decentralized applications, enabling third parties to analyse data and track certain shopping patterns, which could present opportunities for interesting partnerships down the road. These services will not be able to modify the data and all the user’s personal information will be hidden and off-limits for such services.
Smart contracts and second-hand product sales
Our ELI crypto token is an ERC-20 compliant token that enables us to use the Ethereum blockchain-based smart contracts for decentralized sales on the blockchain.
In this case, Eligma offers completely decentralized sales using smart contracts on the blockchain. They will allow payments in cryptocurrencies between sellers and buyers who previously agreed to terms through the Eligma platform or other means of communications. Both buyers and sellers are motivated to successfully fulfil the smart contract terms in order to receive their payment and/or deposit in ELI tokens. Smart contracts act as trustless agents, assuring that the terms are met and thereby eliminating the need for other parties to act as trusted agents. This eliminates fees in second-hand product sales.
The ELI token will also present the focal point of our universal loyalty program. Users will be able to earn and redeem ELI tokens with every retailer on the platform, eliminating the need for separate and fragmented loyalty programs. Eligma will transfer value into ELI tokens and credit them directly to the users’ wallets. They will be able to exchange those tokens for retailers’ discounts and other forms of awards, thus returning them to retailers. This will create a healthy economy of constantly circulating ELI-tokens, which will also be used for some of the platform’s advanced features.
As you can see, blockchain is not just a word we throw around lightly … it will power some of Eligma’s features that will make it unique in the commerce world and give our users safer and more transparent ways to discover, purchase, track and resell items.
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