How Can Blockchain Smart Contracts Be Used in e-Commerce?
Smart contracts are replacing the traditional ones in various industries with the fast speed. Today, they are broadly used to make deals between buyers and sellers in the online outlets. How can the technology be implemented in the work of traditional online shops and what benefits will it bring to the customers and service providers? Let’s find out.
What are smart contracts?
Blockchain smart contracts are digital protocols similar to the traditional contracts by their functions. They are created to enable deals between parties, contain terms of agreement and are executed automatically.
Why to use them?
It is important to know that DLT-based contracts eliminate the third party from transaction-making process, making it private, fast and more secure.
As digital contracts get executed only if rules and conditions are respected by both parties, any risks are reduced for every participant.
How are DLT and smart contracts used in e-commerce?
DLT can be applied in the sphere of electronic commerce in several ways with the aim to improve the existing processes.
As it is already mentioned above, payment processes can greatly benefit from DLT integration, as the current payment methods lack some important features. With the assistance of the self-executing contracts, the payment process will take place directly between buyers and sellers.
Moreover, with the elimination of intermediaries, the processing fees will be reduced, as there will be no need to conduct transactions through the banks or other financial institutions.
The payment process will also become secure, as the transaction will only take place if the conditions of the contract are followed.
• Tracking products and delivery
Supply chain management is another e-commerce industry’s sector which will be greatly improved with the help of DLT.
Customers will be able to check where the ordered product is, and make sure it is on the right stage of the delivery process. As with DLT all the information is stored publicly, buyers will have an easy access to data and control over their ordered products.
Advantages of blockchain for e-commerce
DLT and self-executing contracts provide benefits for both products providers and sellers. The online outlet’s success depends on the customers’ satisfaction, therefore, with DLT, buyers are ensured that the process is fair. With improved processes, sellers, in their turn, gain client’s trust.
Among the elements improved there are:
Apart from the mentioned transactions security, the customers’ personal data is protected as well. With DLT, the data is not stored on a centralized server, therefore, there is almost no chance of hacking and stealing information.
• Record keeping
As the information is stored on a distributed ledger – on many computers at once – it cannot be changed or altered anyhow. This way of storing information ensures that all documents are kept in their original versions and have copies, so the loss of data is impossible.
• Reduced costs and increased speed
Fees are reduced for both buyers and sellers with the elimination of the middlemen. More than that, the existing problem of the e-commerce industry is that in order to access large audience interested in products, sellers have to pay large commission fees which can rise up to 20%. Decentralized marketplaces, however, solve this problem, so parties stop losing their money.
As for the speed of transactions, it increases with the use of DLT. Apart from that, the speed of the goods transportation process increases as well as all the paperwork during the delivery is eliminated.
Real-life use cases
Today, there is a number of online shops built on the base of DLT, platforms which offer blockchain-based payment solutions and companies for decentralized e-commerce platforms development.
It is the platform which provides help with building e-commerce websites based on the DLT. The company’s aim is to create the revolutionary innovative e-commerce ecosystem built on trust and security.
Among the new solutions presented by the platform is also the integration of AI and VR for improving the shopping experience.
It is the decentralized marketplace where users are the owners of digital assets such as stores and different brands.
The platform allows to record the ownership of the shop using DLT. Then, the owners can easily sell or transfer it as a digital asset – it allows the full control over the store.
As for consumers, the benefit for them is lower prices and constant discounts enabled by the company.
OpenBazaar platform is one of the first P2P marketplaces. It is a free-to-use platform which can be accessed online or downloaded as an app.
The platform aims at providing a revolutionary e-commerce experience with the help of decentralization. Easy access to everybody helps sellers to freely list items and find buyers.
The platform claims to be similar to traditional and well-known companies as eBay and Amazon, however, it ensures greater control over the data and allows buyers to pay for products with more than 50 altcoins.
The platform offers a unique solution for the world of e-commerce by providing the possibility of all online shops management with one account.
The purpose of the company is to make the shopping process less complicated and more comfortable.
The platform utilizes AI as well – it helps users to save time by monitoring many online shops and finding the best deals for them.
Eligma also has a DLT-based loyalty program – the platform awards customers for shopping through the platform by giving away its tokens ELIs. These tokens can then be used for more purchases, which will encourage the adoption of the DLT worldwide.
DLT and smart contracts integrated into the electronic commerce industry revolutionize the shopping experience. The use of technology presents benefits for both retailers and customers, building trust between parties and making the process easier for all participants.
DLT and its integration into various industries will be discussed at the Blockchain & Bitcoin Conference Stockholm.
Details of the event and registration are on the official website