How Blockchain Technology Can Transform E-Commerce Part 2

Blockchain as a trusted solution in the e-commerce industry.

In essence, Amazon, eBay and other large e-commerce platforms are trusted third parties that consumers use to make decisions about products they would like to buy. The Bitcoin network showed that blockchain technology is a solution for a situation when two parties that do not trust each other want to engage in a transaction. To use Bitcoin as a form of payment, parties on the Bitcoin network do not even need to know each other and this principle applies perfectly to the e-commerce industry. On a decentralized e-commerce platform, sellers would have access to all their data and would be able to make decisions about how to sell their products freely.

 

Using blockchain to track cargo and shipments

The Bitcoin network keeps track of all the transaction that are occurring on the network in real time and that have occurred on the network since its inception in 2009. This approach would also work perfectly for the logistics and transportation industry. The Bitcoin network adds coins to circulation as miners create new blocks of the Bitcoin blockchain. Every person at any time can see the exact number of bitcoins in circulation.

A blockchain network for the logistics and transportation industry could be adding entries to its blockchain in a similar way, so that it would be possible for all interested parties, including manufacturers of the products, vendors, suppliers, and end users to see latest up-to-date tracking information. Such a blockchain could be open or private. A shipping company could have its own private blockchain with a restricted access and information only available to buyers and sellers.

Generally speaking, blockchain in the logistics industry doesn’t have much value for a company that moves cargo from point A to point B on its own. For all other scenarios, including moving a package from point A to point B from a company A to a company or a person B, blockchain can be extremely efficient and valuable because it offers short update cycles, short processing times, and transparency for all parties involved in a transaction.

The bitcoin network aims to generate a new block of the Bitcoin blockchain every 10 minutes. Once it generates a block, every person in the world can see all the transactions included in that block and in all the blocks before this one by visiting https://blockchain.info/ Many other financial blockchains have much shorter block creation times. For example, Litecoin creates blocks of its blockchain every 2.5 minutes.

If a blockchain for the logistics industry were to update at the same speed with updates about packages and cargo in the way similar to how FedEx and UPS websites update the data, any interested party could see the location of a cargo shipment or a package in close-to-real time.

One of the main differences between blockchain and a website that belongs to a private company in this very scenario is that records on a blockchain network are tamper-proof. If a shipping company wanted to change information on its own website, be it about current shipments or past shipments, it could easily do so. However, it would not be possible on a blockchain network because once a block becomes a part of the blockchain, it also becomes immutable.

Such a blockchain-based approach to tracking of shipments could be also coupled with a decentralized blockchain-based marketplace to improve the efficiency of decentralized selling even further because not only would be buyers and sellers confident about transactions, but both sides would also have confidence about shipping of physical goods, since all the information would also be on a blockchain.

A merchant would send a package to a buyer and would create an entry on blockchain. Then, the shipping company would update the transaction when it receives the package, when the package is in transit and when the package arrives to the buyer. This would work in a very similar way to a transaction on the Bitcoin network that starts with a user sending funds on the network, miners picking up the transaction and including in the blockchain and, finally, the recipient of the funds receiving the money.