How Blockchain Impacts Ecommerce

How Blockchain Impacts Ecommerce

How Blockchain Impacts Ecommerce

It’s no secret that eCommerce is an ever-evolving industry with retailers constantly using new technologies in their businesses and finding new ways to sell their products. And this trend is expected to continue as the industry is poised for massive growth in the years to come.

Despite the growth and popularity of eCommerce, the industry still faces various challenges. These include everything from cybercrime to supply chain management, dealing with fraudulent warranty claims, and even things like finding the right payment providers to ensure the biggest possible market.  

Fortunately, blockchain technology can effectively solve all these problems and allow eCommerce retailers to face these challenges head-on. As a result, it promises to revolutionize the industry and fundamentally change many of the processes eCommerce retailers rely on in their day-to-day business. 

But how is blockchain impacting eCommerce? What changes can the industry expect in the years to come? In this post, we’ll look at these questions in more detail.

What Is Blockchain?

Although it may sound complicated at first, blockchain technology is actually quite simple. And it’s core, blockchain is a type of database. And everyone knows what a database is, right?

In simple terms, a database is a collection of information or data that’s stored electronically. The information in the database is typically structured in tables that allow users to query the data. So, for example, in a database of the residents of a particular suburb, you could query the name, and you’ll be provided with all the information on the specific person.

To store this database, businesses typically use servers where the database resides, and, nowadays, it’s quite common that databases are stored in the cloud. Keep in mind, though, that it’s perfectly possible for anyone to use a database.

Now that we’ve seen what a database is, how does it compare to blockchain technology. The first main difference between blockchain and a database is the way the data is structured. Where are database stores information in a table, blockchain stores the information in groups which are also known as blocks.

These blocks have a specified storage capacity, and when they’re full, they’re chained onto the previous block in the chain. This forms a chain of blocks that contain data, and this is why it’s called a blockchain. When new information is added, a new block is created, and this block, when filled, is then chained to the blockchain.

Every time a block is chained in this way, it’s given an exact timestamp and blocks are stored chronologically. This gives the chain an irreversible timestamp of data which makes it a lot safer and provides better transparency because transactions can be traced on the blockchain.

How Can Blockchain Impact Ecommerce?

Now that you know what blockchain is and how it works, let’s look at how blockchain can impact eCommerce.

Better Payments

eCommerce retailers are increasingly using cryptocurrencies as an alternative to traditional fiat currencies. And these currencies are based on blockchain technology. Some of the main reasons why more retailers accept cryptocurrencies are that they’re relatively easy to use, and they often come with lower costs. 

There are, however, several other reasons why cryptocurrencies may become even more popular for eCommerce payments in future. These include:

  • It’s decentralized. Block-chain and cryptocurrencies aren’t regulated by any government or regulatory authorities. As such, cryptocurrencies can’t be inflated or devalued by governments’ monetary policies, and it’s not susceptible to political influence. Moreover, governments or regulatory bodies don’t have any oversight or control over cryptocurrencies. In simple terms, customers can spend their cryptocurrency how they like when they like, and they’re not bound by geographical restrictions and limitations that are often the case with regular banking and credit card transactions. 
  • It’s anonymous. Unlike credit card transactions, blockchain transactions are completely anonymous. Despite this anonymous nature, cryptocurrency transactions are still very transparent due to the nature of the blockchain. 
  • Simplicity. Because, unlike regular transactions, users don’t need to open an account to use cryptocurrencies, cryptocurrencies are far easier and simpler to use. So, in simple terms, there are no forms to fill out, no documents to submit, and no identity verification that needs to be done. It’s also far cheaper compared to other forms of payment.   
  • Faster. Typically, normal banking transactions can take days to complete. In contrast, payments with cryptocurrencies take a fraction of the time. Also, cryptocurrency payments are available at any time of the day for customers to make payments instantly. 
  • Reduced fraud. Because of its distributed and peer-to-peer nature, blockchain-based currencies are inherently more secure than traditional transactions. 

For these reasons, more eCommerce retailers will start to implement cryptocurrency payments, and, as more do, more customers will start using them. 


Just think about it, an eCommerce retailer’s available market is often limited by the payment methods it can provide to its customers. Unlike other payment methods, blockchain-based cryptocurrencies have no geographical limitations, and customers can use them from anywhere.

So, if a retailer accepts cryptocurrencies as payment, it opens up the possibilities of a far larger market. 

Supply Chain Management

Supply chain management is one of the most critical processes in eCommerce. This is simply because retailers monitor which stock is on the way and when it should arrive. It also helps them verify which products suppliers are sending to them. Here, blockchain can be instrumental. Retailers can use it to track stock and keep better, more transparent records compared to a typical database. 

This improves the entire inventory management system of the retailer and makes it a lot easier to manage. Also, when retailers use blockchain for supply chain management and other administrative processes, they’ll cut down significantly on costs while still having a secure and transparent system.  

More Transparency

A lack of transparency is one of the most significant issues facing the industry today. Despite trying to overcome this issue, most companies have failed to do so. 

With the help of blockchain technology, companies can do now this. This is simply because of the peer-to-peer and decentralized nature of blockchain, which records and validates every transaction once it’s completed. This, in turn, offer retailers the opportunity to be completely transparent in their dealings with customers and suppliers. 


By design, blockchain technology is one of the safest technologies there are. This is due to several reasons. For one, its distributed nature makes it inherently secure and could protect retailers against potential security breaches. In fact, there have been very few instances of security breaches in blockchain-based networks. 

Another significant benefit is, as said above, the fact that no sensitive customer data is necessary for any transaction. This ensures that customers’ data is far safer compared to other databases and forms of payment. 

As a result, and because of the fact that cybercrime is increasing significantly, many retailers could choose to implement blockchain-based systems to protect not only their customers but also themselves.  

Reviews and Offers

Online retailers often rely on customer reviews to create trust in their potential customers. It’s simple, when a customer doesn’t trust a retailer, the chances are slim that the customer will buy a product or service. And this poses a significant issue for eCommerce retailers.  

Because online reviews then have a significant impact on the sales that a retailer can make, fake reviews can tarnish the reputation of a retailer to the point of reducing its sales. So, it often happens that bad actors post bad reviews precisely for this reason and to promote the product of another company.

By using blockchain technology, retailers can verify each transaction, and in doing so, confirm whether a review is real or fake. 

Also, retailers can use blockchain technology to issue redeemable offers to customers through loyalty programs. When they do, they’ll be able to better tracks these offers, which makes blockchain more efficient.

Smart Contracts

If you think about it, contracts regulate almost every part of an eCommerce retailer’s business. Unfortunately, managing all these contracts comes with massive overhead expenses and effort. Here, it’s often necessary to hire staff to manage contracts. 

With smart contracts, retailers can automate significant parts of the contract management process, making the process overall more efficient and streamlined. These contracts use blockchain technology to capture, verify, and enforce contract terms between parties. 

Receipts and Warranties

Because blockchain is a real-time ledger of all transactions, it provides retailers and customers with the ability to store warranties and receipts. As a result, these receipts and warranties are easily accessible, meaning no more paper receipt that customers have to keep to prove that they bought the product when they want to return or exchange it.

Apart from making it more convenient and protecting customers, it can also protect retailers in the case of fraudulent warranty claims because they can see precisely when a customer bought a product. 

The Bottom Line

It’s no secret that the eCommerce industry will grow significantly for some time to come, especially in the wake of the COVID-19 pandemic, where consumers turned to online shopping in what some believe to be a permanent change of customer behaviour. In simple terms, eCommerce is here to stay.

Despite its popularity, the industry still faces various challenges, which despite its best efforts, it could not solve. Fortunately, blockchain technology offers the answer to these challenges, and as more retailers realize it, it will become more prevalent in the industry.

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