When you hear the word ‘Blockchain’ you automatically think of ‘Bitcoin’, somehow Bitcoin and Blockchain have become synonymous to each other. However there is a difference between the two, ‘Bitcoin’ is a cryptocurrency and ‘Blockchain’ refers to a decentralized database.
Blockchain technology underpins all cryptocurrencies, such as- Bitcoin, which also happens to be the most commonly known cryptocurrency along with being the first cryptocurrency. Cryptocurrency have certainly caught the attention of the financial world, because of its unbelievable investment returns.
Bitcoin has shown an approximate 1500% investment return in 2017 and Ethereum has shown an increase of 1000%
Blockchain is the decentralized technological innovation behind the revolution called Cryptocurrency which is designed to harness the power of internet. Rather than depending on traditional networks of banking systems for verification of transactions, cryptocurrency is verified by the user’s computer that is logged into the currency network. The currency is encrypted with a predefined algorithm hence it is not possible to increase the money supply. The users are also aware of the roof limit of each algorithm, so no cryptocurrency can be mined beyond the said limit.
Cryptocurrency has a digital value which can be used for transactions as digital equivalent of cash. This has led to a number of M-commerce and e-commerce industries interested in utilizing cryptocurrency for their transactions.
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Features like customer convenience, flexibility, no hassle of standing in long queues, have made e-commerce a growing trend across the world.
Most e-commerce players prefer the user to make use of their apps for shopping and to encourage this shift they offer special deals on their custom apps and not on their website or even mobile browser. By offering exclusive deals on their mobile apps they are eventually hoping to divert the regular website visitors also to mobile apps.
They are also utilizing the customization feature of the app to gain a better insight into the user’s preference thus enhancing the user experience.
Blockchain is a digital ledger that stores all the past transactions; these are called ‘Block’ and each block has a cryptographic value. Each time a new block is made, it has three essentials – a link to previous block, a timestamp and data about the transactions that it represents. Blocks once created cannot be modified; this is a very crucial aspect it creates between parties of the Blockchain. Since the blocks cannot be modified, there is an assurance that the data it contains is valid.
Blockchain consists of ‘proofs of work’, which verify the contents of each block and these are based on the contents of the block. Proof of work also guarantees that the block is neither duplicated nor modified.
Blockchain and its guiding principles allow cryptocurrency to be decentralized and ensure honesty, trust and integrity during each transaction.
Since all transactional data is stored on Blockchain, it is a natural fit for m-commerce. And, even if the data is not financial it can be stored safely.
With global acceptance of Bitcoin, Cryptocurrency has become the internet of money; customers have a choice between multiple channels of payments. There is no processing fee, no chargebacks or a hidden cost of a wire transfer. Cryptocurrency has advantages over such traditional methods of payments, it is easy to implement, i.e., receiving and sending money is as simple as sharing a QR authentication code.
Blockchain enabled cryptocurrency does not need a middle man to facilitate transactions. Cross border transactions usually take 4 to 5 days to be processed whereas a payment made though cryptocurrency gets processed within 24hrs.
Cryptocurrency like Bitcoin and Ethereum can process 10-20 transactions per second.
On an average 100 billion transactions are done annually with credit card, a shocking 31.8 million people become victims of credit card fraud.
Cryptocurrency does not require the details of the customer and there is no need to submit data like the credit card number. The customer only authorizes a payment transfer from his wallet to the recipient’s wallet and since each person has a randomly generated unique identifier, it is a safe transaction.
As discussed earlier, each block of Blockchain has a link to the previous block. This also acts a visible chain of events that is like the process of fulfilling an order. This feature not only ensures tracking but also ensures speed in order fulfillment.
When an order is placed on a Blockchain powered e-commerce site and m-commerce app, each step of the ordering process adds a new block to the existing chain along with a crucial time stamp. Blockchain is a fully transparent public record of all transactions.
Cryptocurrency is an open source ecosystem; it gives the retailers the facility to create their own program, a new product and services based on the platform. Multi-signature transactions on Blockchain are transparent in nature as there is a no centralized record, which not only fortifies the security of the transaction but also stops any kind of illegal activity.
Blockchain enables the tracking of an order or goods to and fro from its premises. And since all the records are transparent in nature, it is easy to track and find any discrepancy in quantity or quality of the order.
Since Blockchain is a shared, indelible ledger, a lot of processes like internal audits and checks are eliminated. With more and more ecommerce businesses adopting Blockchain for supply chain management, it is not long before it becomes a ‘supply chain operating system’ universally.
Inventory control and management has always been a problem with any product-related business. Items need to be constantly stocked and replenished. If you add smart contracts to the Blockchain, it resolves the issues that could arise in inventory management. Items can be ordered automatically when the minimum limit is reached. This will ensure that there is no scarcity or excess of products.
Since the total number of purchases can be tracked with Blockchain, it is easier to track the loyalty points earned. Complete purchase history along with details of reward points earned and redeemed is safely stored on its distributed ledger. Incorporation of smart contracts in Blockchain can be used for rewarding discount vouchers and tracking of points, both earned and redeemed.
It is estimated that by 2025, 10% of global GDP will be generated on Blockchain.
Blockchain is emerging as a platform for all future trades. Cryptocurrency like Bitcoin has opened the avenues for a new kind of money that is not under anyone’s control. With benefits like zero transaction fees, it is fast emerging as the new kind of superior currency.
Blockchain has completely revolutionized digital currencies as well as the transaction systems. Every transaction, process and agreement has its own digital signature, which can be validated by anyone. And since the contracts are embedded as codes they are fully safeguarded against any kind of data loss and information tampering.
Blockchain technology in Mobile commerce solutions has made the operational framework easier and smoother. Blockchain is rightly considered the game-changer for decentralizing the infrastructure. It is certainly the technology that will enable new options and avenues for M-commerce/E-commerce businesses, shared economy and much more.