There have been many rumours around e-commerce giants getting involved in the cryptocurrency space. From PayPal to Amazon and others, it seems e-commerce is the new frontier for blockchain technology. This is no surprise, as e-commerce always has been a major force for blockchain adoption, what we are beginning to see now is a new wave of mainstream adoption.
In my work as a Master of Financial Economics candidate I am thinking about money matters all the time and e-commerce is of particular importance today in the international economy. There’s no question that blockchain technology has huge implications for e-commerce. In 2020, it’s clear there are significant benefits to having cryptocurrency technology in the financial system.
What’s been less clear to many is how this will trickle through to the everyday consumers that will benefit from the technology. E-commerce is one simple way to see how. Cryptocurrency has the potential to take costs in e-commerce from dollars to cents. The maths behind this is simple, for every dollar we can reduce the cost by, we gain a dollar more for e-commerce purchases.
E-commerce is quickly becoming a staple in the economy, for millions of people ordering goods and services online has become commonplace. Given the savings that will be made using cryptocurrency it’s no surprise e-commerce giant Shopify is currently looking to participate in Facebook’s Libra project. Chinese fintech companies are hedging their bets too, with investments and partnerships within the cryptocurrency space.
All aboard the blockchain express
Imagine e-commerce as a train station, where millions of trains pass through everyday. Managing the flow of trains is a complex task, especially when you have multiple trains for each delivery.
Customer information, including shipping address, payment details and package logistics all require constant attention. This is likely why we are seeing e-commerce giants such as PayPal enter the cryptocurrency space — cryptocurrency simplifies the transaction process. Instead of having multiple trains running through the station for each purchase, blockchain technology can combine data and payment in the same transaction, essentially lengthening a single train of information.
Making sense of more than money Blockchains like Syscoin can combine data, money and transit information into one succinct format, as base layer for e-commerce transactions online. This platform is building toward a crucial layer for the creation of decentralized marketplaces, by equipping retailers with the tools to manage inventory and track shipments.
Additionally, public blockchain records allow open access to each transaction which will prevent discrepancies and delays by keeping sellers accountable. This has implications for preventing fraud, reducing the
number of lost of packages, and ultimately will reduce the cost of transactions.
This is only the beginning. Who knows, perhaps in the future we will be running space tourism flights on Ethereum smart contracts?
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