As e-Commerce evolves and transforms our online experiences and future commerce, the issues of trust, security, transparency, coherence, and cost-effectiveness are challenges that remain prominent. Online consumer fraud and data breaches has impacted several companies and organizations worldwide such as Target, Yahoo, and most recently Equifax and has had a profound effect on trust and transparency. Current e-Commerce platforms are based on legacy payment processes that are cumbersome and vulnerable to external threats and rapid change. For example, today’s payment processes require intermediaries like banks, marketplaces, credit card companies, or third-party services to act as middleman resulting in a highly vulnerable, expensive, and time-consuming process.

Moreover, e-Commerce is on the verge of being re-imagined with new and immersive technologies like Augmented and Virtual Reality (AR/VR), Conversational User Interfaces (CUI), and Artificial Intelligence (AI). These technologies are poised to transform how we consume and interact with digital environments and future commerce in ways previously not possible. SMITH is at the forefront of shaping and harnessing new and immersive technology solutions for this new frontier.

However, as future commerce is re-imagined with exciting new possibilities, trust and transparency remains a prevailing and dominate issue.

Internet of Value

The Internet of Value (IoV) enables the instant exchange of value transactions like currencies, stocks, votes, securities, intellectual property, music, scientific discoveries, and more without intermediaries.[1] Similar to how information is exchanged across the internet today. This is powerful because it enables a future for everyone to share in the transfer of value.

The Internet of Value is poised to reshape and transform e-Commerce and the global economy. But for it to become reality and adopted, it must ensure trust.

e-Commerce of Trust

Blockchain technology enables the Internet of Value in a highly secure and transparent manner. It is a shared, immutable ledger for recording the history of transactions. Blockchain fosters a new generation of transactional applications that establish trust, accountability, and transparency and has the potential to enhance future commerce beyond todays e-Commerce. [2]

Blockchain provides an open and decentralized database built on a trust protocol that stores payment transactions in blocks that are linked and secured using cryptography. It enables any ecosystem, machines, or individuals to securely exchange and distribute value peer-to-peer with no intermediary. Payment processing based on Blockchain is transparent, secure, accurate, and instant.

Its economic and social impacts are far reaching including commerce, banking, security, legal, health care, insurance and much more.

The potential of this new way of trust is tremendous, as it would entail being able to access stores from across the world with full guarantees. For online merchants, a technology such as this would allow them tap into truly global markets.[3]

– Adolfo Contreras Ruiz de Alda, co-author of Blockchain: the Industrial Revolution of Internet

World Economic Forum: What is Blockchain?

Decentralization

Blockchain technology is based on a decentralized model which distributes every transaction in a ledger across a secure network. A decentralized model maintains the integrity and authenticity of information reducing the risk of data breaches and fraud. There are no intermediaries required and no one centralized database on the network that can be hacked.

The following illustrates a transaction flow through a Blockchain e-Commerce model.

Decentralization
What is Blockchain Technology?

Transparency

Blockchain payment processes provide transparency and traceability through a decentralized ledger. Each chain on the network contains a copy of the ledger. While transactions are recorded and visible, privacy is maintained using a public and private key cryptography which mitigates the risk of fraud.

Transactions are verified and validated using smart contracts allowing for a more secure and transparent environment. A smart contract is a program that is capable of facilitating, executing, and enforcing the negotiation of an agreement using Blockchain technology.[4]

ChainThat: Simple introduction to smart contracts on a blockchain

All transactions made are authorized by miners, which makes the transactions immutable and prevent them from the threat of hacking.[5] Mining is the process of adding transaction records to the ledger of past transactions. A miner is a computational review process performed on each block of data in a Blockchain network.

Blockchain Ecosystems

The first implementation of Blockchain technology for e-Commerce was BitCoin. Bitcoin uses a global cryptocurrency that can be used as a medium of exchange. The bitcoin system works using a blockchain ledger to record transactions. Each bitcoin represents a virtual digital currency that enables online payments to be transferred directly, without intermediaries.

Blockchain Ecosystems

 

Bitcoin provides a level of convenience and simplicity that facilitates instant transfer of money without the process of entering confidential payment information. It’s adoption in e-Commerce is rapidly growing with many e-Commerce sites now accepting bitcoin payments. For example:

Expedia - The largest travel booking site Expedia use bitcoin payments for hotel booking
Shopify Stores - Online stores build on the Shopify platform provide bitcoin payment options
Dish Network - Satellite television provider Dish Network accepts bitcoin payments

Bitcoin is only one of several hundred applications that use Blockchain technology today. For example, IBM has recently announced a major Blockchain collaboration with several companies across the global food supply chain including Walmart, Nestlé, and Dole.

Examples of Blockchain used in other transformational applications include:

Nasdaq Linq was the first financial services product based on Blockchain technology. Linq uses Blockchain to power capitalization tables, which private firms use to manage shares in their companies.

Ethereum is an evolution of the technology. It is an open decentralized software platform based on Blockchain that provides a way to execute peer-to-peer applications. It uses a crypto token to pay for transaction fees and services on the Ethereum network.

Capasity is a decentralized ecosystem for immersive digital content exchange. The Capasity ecosystem leverages Blockchain infrastructure to create, share, rent, and sell AR/VR and 3D content P2P.

Capasity

 

Café X is reimaging the coffee experience by launching latte-serving robots that serves up coffee ordered from an app. Moreover, this company uses Blockchain technology to revolutionize the Coffee Supply Chain.

Café X

 

Final Thoughts

The potential of future commerce and immersive technologies like Augmented and Virtual Reality, Conversational User Interfaces, and Artificial Intelligence will re-imagine and drive the next era of e-Commerce. However, the success of future commerce for organizations ultimately lies on trust and transparency.

Blockchain technology has the promise to deliver the Internet of Value and realize the e-Commerce of Trust.

So I wonder, what could be the future of all this?

Bettina Warburg: How the blockchain will radically transform the economy
Fortune: What Blockchain Could Look Like in The Future

References

[1] - https://ripple.com/insights/the-internet-of-value-what-it-means-and-how-it-benefits-everyone/
[2]https://www.ibm.com/blockchain/
[3]https://www.bbva.com/en/blockchain-e-commerce-trust/
[4]https://blockgeeks.com/guides/smart-contracts/
[5]https://mercury-processing.com/blog/bitcoin-and-blockchain-the-internet-of-value/

Tags: ecommerce, Experience Design, future commerce, internet, blockchain, Technology