Imagine a Google Doc that you update with new information on a regular basis. You have access to it and you alone make updates to it. If you’d want to share that document with others, you can do that within Google Docs, and the Docs platform can track changes and let you see exactly where changes were made and what time they occurred. And all of those changes can be made simultaneously, with your instance of the document updating as the new changes occur.
If you take this process — that of a shared and always backed-up Google Doc — and apply it to something like Bitcoin, you’ll understand how the Blockchain works. It’s a database of information — in Bitcoin’s case, financial transactions — shared across the Internet, constantly being updated. There is no central version of the file: instead, there are millions of versions, which means the Blockchain can’t be hacked or modified in any one place. And now retailers are using the power of the Blockchain to shake up retail in new and exciting ways.
Let’s take a look at some of them.
Because we just discussed Bitcoin above, it shouldn’t surprise you that retailers are looking at Blockchain-powered payments as channels to bring in new customers. Some people just aren’t comfortable putting their credit card numbers online anymore. For those people, alternative payment options like Bitcoin and other microcurrencies can keep private financial information safe while still allowing someone to make a purchase online. More and more sellers are starting to accept microcurrency payments, and these currencies are becoming larger, more important players in the worldwide financial market as a result. Just look up the value of 1 Bitcoin has in US dollars and you’ll see the potential microcurrencies have to make a huge impact on retail sales in the future.
One of the major benefits of the blockchain is its ability to secure itself. There is no central file when it comes to any kind of record being stored on the blockchain — instead, entries are distributed across the entire Internet, resolving with each other every ten minutes to sync updates around the globe. This prevents hackers, for example, from being able to alter any blockchain transactions or divert funds into different accounts. The other Blockchain entries will see this abnormality as the Blockchain is remerged and simply remove it. When it comes to securing a transaction from one point to the next, the Blockchain is about as secure as it gets.
Proof of Purchase
What if the receipt you receive at Best Buy when you purchase something was completely and totally unforgeable? What if Best Buy had some kind of computer issue that deleted your purchase from the system, and the customer service agent taking your return simply didn’t believe that your receipt was authentic as a result? The beauty of the Blockchain lies in how rock-solid reliable it is when recording transactions. It goes to the anti-counterfeiting measures above: you can pretty much guarantee that a transaction recorded by the Blockchain is accurate, which means you could potentially track a purchase paid from you to Best Buy and know for certain that you did send a certain amount of money to that retailer for a product. The Blockchain has serious potential as the new receipt/proof of purchase in the retail world.
Supply Chain Transparency
Let’s say you’re a company like Apple and you take a moral stance against supplying your products from certain places of the world. When you’re buying materials to make your next iPhone, how can you be 100% sure the supplier you’re working with is sourcing material ethically? If they made purchases and had those transactions recorded by the Blockchain, you’d be able to trace every transaction from your supplier back to the company they originally paid for materials. Every single time. As consumers become more conscious of what goes into the products they buy, supply chain transparency will only become more important for retailers going forward.
Logistics and Tracking
We’ve focused quite a bit on the financial side of the Blockchain’s capabilities, but financials aren’t the only thing this powerful technology can be used for. Think about shipping logistics and tracking, for example. A new transaction can be recorded in the Blockchain for a shipped item and can be updated at each node in the shipping process, from origin all the way to final destination. This concept can also be used to track equipment inside companies, with the Blockchain recording the use of equipment, where items are moved to, and who has signed them out. The security afforded by the Blockchain means no one will be able to alter transactions and either negatively affect deliveries or cover up shrink inside retail companies.
If you’ve ever had to cash in on a warranty due to a product failure, you likely understand how frustrating the process can be. Someone from the company wants to know when you purchased your product, and more often than not, they’ll want you to present your original proof of purchase. Who keeps those? Even if you get by without needing your receipt, you still may be required to register a product upon buying it to get the warranty you deserve, and some people forget to do that. With the Blockchain, a warranty could be tied to your unique transaction code, enabling a retailer to instantly see when you purchased the product. No debate, no arguing with customer service, and no having to wait to receive a replacement.
We hope we’ve uncovered some of the ways the Blockchain is already in use, as well as some of the ways it could be put to good use by retail companies in the future. The future definitely looks bright for the Blockchain, and with cryptocurrencies on the rise, it’ll only continue to get more attention.