Digital marketplaces orchestrating millions of transactions and online networking are often marred with challenges, such as payment delays, trust, and relevant suggestions to better reach target markets.
Although the shift from offline to online has enabled cross-border networking and propelled business reach, there are certain core areas that continue to haunt even when there is technology for everything.
Trust, security lapses, and failed transactions continue to acquire the front row. Let’s try to connect these dots and see the bigger picture.
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- Inability to sell if you are not a seller with a strong reputation.
- No provision to digitally verify users.
- Maintain customer loyalty.
- Develop and maintain a secure network.
- Ability to maintain a vulnerability management program.
- Implement strong access control processes.
- Regularly monitor and test networks.
- Maintain a security policy.
- Reduce processing and payment delays.
- Lost transactions.
- Cross-border transactions.
- Diverse payment methods.
Considering industry pain points, it can be understandably concluded that the industry needs a technology revolution to challenge current norms and accelerate innovation for better reach and customer experience. This is where Blockchain has stepped in as a boon for businesses envisioning to take bigger stakes in digital markets.
Blockchain — a Disruptive Entrant in the Digital Sphere
Blockchain technology, initially considered as a finance-centric technology, has now spanned its reach in almost all domains where trust, security, and traceability remain a major concern. The rule-based intelligence of blockchain has the potential to completely transform digital marketplaceS where transactions can be seamlessly completed with the help of smart contracts.
Consumers are now engaging more in a peer-to-peer manner fueled by blockchain-based platforms instead of a central gatekeeper. There are three core blockchain elements that can help develop smart online marketplaces
Smart contracts are agreements that are digitally signed by each party to prevent any kind of fraud and eliminate third-party payment processing fees. They are:
- Automatic (without any intermediate).
- Publicly stored.
Smart contracts can be operated underneath a set of conditions depending upon the users’ agreements. When those conditions match, the contract is executed.
Online marketplaces can implement smart contracts to track transactions, monthly subscriptions, and agreements between platform users. It also helps to resolve possible disputes.
The decentralized ledgers of blockchain ensure that:
- All transactions are copied and spread across a blockchain network.
- There is no centralized authority or information store.
- Whenever a new block is added to the blockchain, the network is updated to reflect the change.
Blockchain technology helps to track every transaction. It provides improved order self-actualization traceability. Each step in the order processing adds a new block in the chain along with the time and actions that were performed.
Furthermore, decentralization means that there won’t be any intermediaries between sellers and consumers.
In any case, if a dispute arises between a seller and consumer, a trusted third party is required:
- It can be the blockchain platform that the seller and consumer agreed on in advance or any individual in the network.
- A mediator will receive the keys to decrypt messages between the seller and consumer.
- A mediator can decrypt contracts and talk with both parties to resolve issues.
Cryptocurrencies are digital assets that are based on cryptography (an encryption technique – for security). Cryptocurrencies are basically used to buy and sell products and services.
Buying products and services with cryptocurrencies does not require disclosure of identities, as it takes place online. It offers transactions with pseudonymity.
With cryptocurrency, consumers can complete purchases without providing any personal information to the merchants maintaining anonymity.