By Swathi Hameed
The technology of blockchain has been around for more than two decades now. Ever since Bitcoin, an application of blockchain, hit the airwaves in 2008, a number of applications have cropped all of which seek to leverage the principles and capabilities of the digital ledger technology.
Many people see blockchain as a technology that powers bitcoin. While this was its original purpose, its scope is not limited to cryptocurrencies alone. Blockchain is a whole suite of distributed ledger technologies that can be programmed to record and track anything of value, be it financial transactions, medical records or even land titles.
Venezuela could be the first place to properly actuate cryptocurrency adoption. Faced with hyperinflation, the Latin American nation has seen its population embracing cryptocurrencies as a tool for survival in the world’s worst-performing economy. The amount of bitcoin traded in crisis-stricken Venezuela has skyrocketed. Now even the brick-and-mortar retailers are posting signs in their stores probing customers to actually spend bitcoin and other cryptocurrencies. It makes sense that if the traditional currencies simply aren’t working then people would be more willing to embrace alternatives.
While the technology was mostly associated with BFSI domain(banking and financial sector), it’s power is being identified and used widely across different industries like medical, retail, supply chain management.
The question of what and how
Blockchain stores information in batches, called blocks that are linked in chronological fashion as a continuous line. Each of the block is connected to each other, like a chain of blocks metaphorically. What makes the technology effective is its decentralized data storage. It is a non-destructive way to track data changes over time. Hence once the data is entered into the network, it cannot be tampered or manipulated as in order to make any changes in the data, would require overwriting considerable amounts of data in multiple locations. Thus this brings in a considerable amount of trust into the data.
The Retail industry
When it comes to the retail industry, the mass has always been innovative. With the advent of modern technologies, the retailers has always tried to keep their customers on the edge with more consumer focused techniques. Store and loyalty cards are one such use of technology as they not only reward shoppers with discounts and money off advantages but they also track spending habits and buying trends of their customers. Technology has already transformed the retail industry beyond recognition – now, almost every customer is an online customer.
Using blockchain, retailers can provide customers with irrefutable proof of the credibility of their products at every step in the supply chain. The most evident advantages are that as traceability and transparency of the entire supply chain will increase this will lead to a user loyalty and customer trust especially for ecommerce as more and more consumers are concerned about the origins of the products they purchase, both from an ethical and value-based standpoint.
In an industry where time is money, the adoption of a technology that saves a lot of redundancy and time is really important. In a hypothetical situation, where an infant care company manufactures a new product, that was later identified to cause serious skin irritations in infants, it is easier to trace each and every defective product in the batch and reclaim them before it reaches the customers through adoption of blockchain.
The process of applying blockchain to retail has already begun and there are some exciting developments taking place in this domain.
Building Trust by Providing Origin & Authenticity
As building customer trust is an important aspect of the growth of the market, Blockchain can help consumers gain the transparency they need in their purchases, and allow businesses to win their trust for good. As the data cannot be anyhow manipulated at any stage, consumers can track and verify the entire life cycle of a purchase from production to delivery.
Walmart’s food safety solution in collaboration with IBM Blockchain platform is revolutionizing the retail industry by creating a system that allows consumers to pinpoint within minutes, the origin and path of a product across its supply chain. This simple solution will change how people choose and buy food and help build consumer trust. Actually IBM Food Trust is the only network of its kind to connect participants across the food supply through a permissioned, permanent and shared record of food system data.
According to the Visual Capitalist’s report in 2018, counterfeit goods caused roughly $323 billion of damage to the global economy. From merchandise products to fake software and movies, the entire retail market have been plagued with counterfeits. However, the cost of counterfeiting and fraud extends beyond this monetary cost — it compromises a brand’s integrity and reputation. In an international economy, it’s important to verify that you’re buying legitimate products. With the ability to assign unique identifiers apiece, it is expected to provide unprecedented security in identifying fraudulent items in the supply chain, as well as immediately and cheaply rejecting fraudulent returns.
BlockVerify, a UK-based company has launched a blockchain-based anti-counterfeiting solution. Goods are tagged and verified at the point of manufacture and then certified on the blockchain. When customers buy a product they can check the authenticity and, thereafter, be registered as the official owner on the blockchain.
Accepting payments with cryptocurrencies
Blockchain allows the use of cryptocurrencies as a means of exchanging value or data, and really comes into its own for retailers when handling cross-border payments and micro-payments. Overstock was the first major online retailer to accept Bitcoin as payment in January 2014. There are a number of advantages for the retailers in offering the service. For instance, Bitcoin payments are cheaper to process than credit cards.
Today, online retailers of all sizes have begun to accept cryptocurrencies as a form of payment, although on the consumer side, adoption of this is still very much in its infancy. CoinPayments and Beam Wallet are two of the companies working to make the crypto payments using blockchain.
Is it Revolutionary?
Blockchain is clearly here to stay and is already revolutionizing every industry. Adoption by the entire value chain will be crucial for the success of the blockchain revolution in retail sector. A recent report disclosed that by 2023, blockchain in the retail market could grow to $2.3 billion or at a compound annual growth rate of 96.4 per cent, which would be the highest forecasted growth among any blockchain-related industry. The real problem now is the lack of Blockchain developers, which is stopping deeper implementation of the technology.
Swathi Hameed is a tech analyst at Vistas News