No matter the number of television personalities talking about bitcoin, or how large the growing cryptocurrency market capitalization gets, blockchain will only be considered successful when a significant portion of our everyday online interactions are occurring on its networks.
There are many companies working diligently on blockchain ideas that may one day replace today’s payment, storage, and security services, but the world is light years from true decentralization. It’s still a very young innovation, yet progress is very encouraging given the technology’s enormous potential. Blockchain ideas are spreading to industries outside of those with its most direct applications, and into parallel sectors that stand to benefit just as much.
Retail is one of the most pertinent areas considering so many of the services being developed are crucial to its activities. Operations like payment processing, supply chain logistics, and location-based advertising are already under the microscope of blockchain leaders, who are working diligently to bring better versions of these deliverables to market. As these key areas begin to evolve and reap the benefits, other curious industries will fall in line as well.
One of the most interesting notions that follows a decentralized network is how data ownership is handled in these environments. Because all peers share responsibility for sending and storing data, there isn’t any single authority overseeing how it’s captured, meaning that each peer can exercise control over which services capture their data, where it’s stored, and to whom it can be sold. Currently, companies feed on our data for free, developing an industry whereby gatekeepers profit immensely by selling this data. Location-based and demographic-based advertising is an important component in retail, even for brick and mortar companies, as evidenced by services like Groupon. Itself the beneficiary of a rigged data relationship, Groupon’s restricted, expensive, and opaque way of building online-to-offline relationships is facing risks from blockchain.
Technology leaders in the retail space like HotNow are developing a fresh take on the incomplete deal that small businesses opt for when partnering with Groupon or FourSquare. Blockchain is to thank for HotNow’s latest venture, HoToKeN—a token-based platform that uses cryptocurrency to better nurture online advocates for local businesses. For missions like posting an image, writing a review, supporting a social media account or answering a questionnaire, users are rewarded in HTKN that will be redeemable for discounts at their favorite local shops and restaurants. The ledger can record a customer’s ‘creditworthiness’ and even allow them to borrow HTKN in bulk. HotNow’s HoToKeN is a creative answer to local businesses who question how they can build an online-to-offline presence more efficiently.
In eCommerce, Know Your Customer (KYC) protocols are required by law and help to reduce fraud and crime online, as well as establish secure ways to prove one’s identity during a purchase. Most purchasing activity done via online retail pages is with credit cards, but the ways that our centralized system goes about verifying these payments and storing our sensitive information is neither safe nor private. We’re required to input our credit card information often and the information necessary to use it (our names, addresses, birthdays, and more) with each new purchase, or we can allow the site to save our details to make it faster next time. However, as the all-too-recent Equifax breach demonstrates, a single hack on that central server array means that the entire database could be compromised along with your data.
A distinct advantage of any system using blockchain as a foundation, rather than any single blockchain product, is the preservation of KYC standards alongside anonymity and safety. How is this possible? A retail system doesn’t need to know your name to determine that you’re the rightful owner of the credit card being used, because it can trust that the public ID (the equivalent of a screen name) listed on the ledger is paired with the correct private ID (you). This happens via cryptography, whereby the blockchain system assigns each person a public alias that can correspond to only one real identity, which itself is protected by a unique private key (a phrase that only the correct identity knows). This allows an online shopping cart that uses Deloitte’s KYCstart service, for instance, to take a credit card payment and verify the owner of the card without the information ever entering its system.
Blockchains are basically decentralized ledgers, which organize the consensus of and record all data transmitted between a vast array of disparate peers. It’s the equivalent of a big spreadsheet shared between millions of people, and when one user makes a new entry, everyone knows about it. There are few areas more immediately relevant to this technology than supply chain management and logistics, for which the current status quo holds many problems. The first is a lack of standardization between the industry’s various shippers, carriers, truckers and fulfillment centers, which naturally breaks up communication and makes it difficult to know exactly when a package will arrive or its condition along the way. While this is inconvenient to people ordering products online, it also makes it hard to build accurate dynamic pricing models, which pressure sellers at the end of the chain to overcompensate for potential delays and inflate prices.
Alongside the Internet of Things (IoT), which provides real-time streaming data from remote, connected devices, blockchain can transform supply chain management for the better. Development is already underway on solutions that will eliminate cumbersome paper-based processes. For instance, IBM and Maersk are partnering on a new blockchain venture designed to help stakeholders along the supply chain track freight with more transparency. Including the ongoing individual projects, logistics is one of the most crowded industries with blockchain innovators, likely due to its relevance with the ledger.
Retail is primed for disruption, and the blockchain solutions being developed today have their sights laser-focused on doing just that. The list of ancillary services that retail leans on to be able to provide efficient operations is long, and many of these services will soon run on the decentralized ledger. Accordingly, retail will likely evolve more than any other industry as blockchain makes it slow impact, benefitting the billions who take part in it every day.
Disclaimer. This article is paid and provided by a third-party source and should not be viewed as an endorsement by CoinIdol. Readers should do their own research before investing funds in any company. CoinIdol shall not be responsible or liable, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any such content, goods or services mentioned in this article.