Here’s the Future of E-commerce with Blockchain

Have you ever thought how e-commerce will look like with the game-changing blockchain technology? Imagine decentralized online retail with more opportunities for merchants. The benefits of lower fees and disintermediated purchases. The ultimate privacy of personal data. Real-time monitoring of operations.

All this could become possible with blockchain. As an example, let’s analyze how Amazon could change if it would be blockchain-driven or start operating in the blockchain-led e-commerce landscape.

Decentralization vs Monopolization: Why It Matters

Regardless of a variety of merchants on the market, the latter is still highly monopolized. In 2018, the GMV share of Amazon on the US market was estimated at as much as 41%, whereas by 2021 it will rise to 50%. What’s wrong with that? The biggest issues of monopolization are cost-inefficiency and almost no possibility of external interference.

How Blockchain Demonopolizes the Market

Cost-inefficiency is caused by high transaction fees. Amazon vendors can choose either the PRO plan that costs $39.99 a month, or the individual plan for small batches with the $0.99 per item fee. In addition, professional sellers pay 6–25% of their turnover, whereas individual merchants are charged $0.45–1.35 per item. What’s more, Amazon postpones its payments to vendors for as long as 2 weeks — 3 months from the date of purchasing, which means that big money is frozen.

Fair disintermediation of this process can make e-commerce operations more affordable for merchants, with fewer fees and no frozen assets.

Blockchain-driven e-platforms don’t require a ‘leader’ who’s responsible for all the transactions. Instead, they act as a digital public ledger that guarantees all obligations will be fulfilled with no counterparty risks. Blockchain-driven smart contracts can both trigger payments, once a bought product is delivered, and make returns automatically. This will reduce both fees and payment wait time.

So, what’s the impact of blockchain on digital marketplaces? As the technology promises risk-free collaboration of sellers and buyers, there is no need in any intermediary that gobbles up fees and freezes merchants’ revenues. In this case, vendors could increase their profit and consumers could benefit from lower prices.

BitBoost is just one decentralized marketplace using this exact strategy for its app. However, despite new blockchain-powered companies popping up on the market, there’s still big wiggle room for other potential players. If you’d like to become one of them, the genEOS blockchain ecosystem will significantly ease your market entrance. This platform offers pre-designed data decentralization and smart contracts, cutting development costs.

‘Black’ vs ‘White’ Box: What’s There?

If you ever were engaged in Amazon business either as a vendor or as an affiliate partner, you must know that at any time the jig can be up. Amazon can close your account and block the money in it on the basis of only vague reasoning.

Can blockchain shift this paradigm and make the cooperation process more transparent? Blockchain-powered data storage makes any alterations immediately trackable. If any violations are detected, the system will store this data on blockchain and inform the related parties about the case. Smart contracts will allow time to resolve this problem and then will either close the merchant’s account automatically or postpone its operation until any corrections are made. This way, blockchain-driven platforms can prevent any arbitrariness, hence making the market more competitive.

Private Data Will Remain Private Forever

Have you ever been confused by the fact that Amazon knows you better than you know yourself? The store analyzes your behavior and purchasing patterns and uses this information for ad targeting to make a precise hit.

Aware of this problem, European authorities issued the 2018 General Data Protection Regulation to prohibit any unauthorized use of private data. Well, it’s great but are you sure that this law is being really implemented by all the market players?

Blockchain can guarantee integrity and confidentiality of private data because data there is encrypted and decentralized. In order to hack such a system or intentionally misuse blockchain-stored data, it’s necessary to access all the chain nodes instantly, which is near to impossible. As a result, private will remain private as it must be.

Wrap-up: How Blockchain Enhances E-commerce

This probably sounds too good to be true but blockchain can really turn e-commerce upside down. It will make transactions more affordable because they will not require an intermediary anymore — blockchain will take on this role. Smart contracts will be responsible for payment workflows and trigger any alterations to the cooperation terms, if needed.

Blockchain can also open the door into internal processes. It will let partnering businesses know what’s going on, what needs to be corrected in terms of cooperation, and automatically check whether any violations were remedied properly.

Lastly, blockchain will keep private data private with no exceptions. Every customer’s personal detail will be stored in a decentralized and secured way with no third-party access allowed.