Remember that a blockchain is a”dispersed ledger.” It records transactional information and stores it across several different computers. Combining transactions leads to a”block” Each block is related to the block before and after it, thus creating a”chain.” Since the blockchain information is stored on multiple computers around the world, no single central authority controls the information, which provides blockchain the advantages of being protected, reliable, and for the most part unchangeable.
3 Immediate Blockchain Uses
Payments. Cryptocurrencies like bitcoin utilize a blockchain to record the transactions involving that cryptocurrency. The cryptocurrency inherits those exact same secure transaction benefits related to the blockchain without needing to involve a middleman — banks, payment processors — that many mainstream currencies and transactions require. This takes substantial cost out of the transaction, making bitcoin and other cryptocurrencies generally more affordable for both merchants and customers.
Holding cryptocurrency as payment is becoming simpler as an increasing number of online merchants, physical places, and consumers have embraced bitcoin and other cryptocurrencies. In accordance with CoinMap, a website that tracks merchants accepting cryptocurrency, almost 15,000 places globally allow consumers to pay using cryptocurrency.
Large online retailers like Expedia, Overstock, and Microsoft, in addition to thousands of Shopify shop owners, all accept bitcoin, opening the door to many more customers. The advantages for merchants are low or no processing fees, no chargebacks, international use, and fast setup.
Overstock takes bitcoin for payment, as does Expedia and Microsoft.
Accepting cryptocurrencies is now as easy as establishing an account using a bitcoin chip — BitPay and Coinbase are the key ones — and incorporating it into your ecommerce website. (I don’t have any affiliation with any of the companies discussed in this guide, other than a small volume of cryptocurrency trading via Coinbase.) For many merchants, the chip takes care of producing a cryptocurrency wallet that you maintain your funds and enables you convert your cryptocurrency into U.S. dollars (or your local currency). Like all things payment-related, merchants should consult their accountant and tax preparer to discuss their experience and comfort level with cryptocurrency payments and if they have recommendations specific to the merchant’s business.
Supply chain. Reducing the cost and complexity of the distribution chain is now an integral use for blockchain. Lots of the biggest retailers have embraced blockchain for this purpose, or they’re testing it.
The majority of these retailers utilize the blockchain to get rid of the manual and paper work related to international product shipping. By way of instance, data from a bill of lading for freight shipments can be manually set on the blockchain at every stage of the supply chain or mechanically entered, eliminating the lengthy and costly administrative procedure for approvals and receipt warranties. This permits all participants to track the shipment via its travel, verify the product information (like pallet weight) at each step, and know that the data is accurate and dependable.
For smaller merchants, there may be similar opportunities for removing cost, but it might not be worth the effort to get your providers blockchain-enabled.
But for merchants that sell unique items for which credibility matters or greater risk products which might be tampered with or have expiration dates, the blockchain helps affirm the validity and quality of their stock and reassures consumers that they’re getting what they pay for. Provenance and Codex Protocol are examples of businesses that help merchants implement supply-chain blockchain solutions.
Channel expansion. Blockchain and cryptocurrency have attracted a wave of decentralization to ecommerce, creating marketplaces that allow anyone to offer products available. A number of these marketplaces focus on particular categories. Rare Bits is a market for crypto-collectibles (one-of-a-kind electronic goods). Wax is for virtual game items. More general marketplaces include OpenBazaar and BitBay.
Transaction volumes on those decentralized marketplaces moderate compared to typical ecommerce volumes, and user interfaces for both merchants and customers leave a lot to be desired. However, the marketplaces offer an option for merchants which are targeting a cryptocurrency-savvy community or need to expand their retail station and appreciate a decentralized model.
Businesses across the globe continue to operate on blockchain solutions for, as examples, loyalty applications , advertisements, contracts, fundraising, and business lending. All trends point to all merchants — online and offline — benefitting from blockchain adoption.