The Libra Ecosystem is an eCom-centric blockchain platform that was designed with the aim to deal with the various challenges of traditional e-commerce and replace it with a newer, improved blockchain e-commerce, which is more secure, efficient and cost-effective.
One of the biggest benefits of the Libra e-commerce blockchain system is cost-effectiveness. As it suggests, the cost-effectiveness feature of the Libra Ecosystem helps e-commerce businesses reduce the cost of their operations. To understand how it works and helps increase the efficiency of the overall e-commerce, let’s first try to understand the challenge.
The Middleman Cost Challenge of E-commerce
The traditional e-commerce payment system, which is in use presently, is centralized, i.e. requires a middleman or entity to govern everything, from the listing of products to pricing, sales, and payments. These middlemen include the e-commerce website, owner, manager, etc. who charge a commission for their services.
As of present, Amazon, eBay, etc. are some of the biggest e-commerce platforms out there. All these are centralized platforms and therefore charge a hefty commission from their sellers, which is ultimately paid by the end buyer in the form of the increased product price.
For example, Amazon presently charges a fee ranging between 40-50% from the seller, including the platform fee, closing fee, shipping fee and tax. In the end, the seller only gets 50% of the product sale price.
Other than this fee, the buyer also has to pay the payment gateway charges for using credit cards, PayPal, etc. for payment on the e-commerce website. This fee may range between 2-10%, depending on the payment gateway.
Libra Ecosystem – The Cost-effective E-commerce Platform
The Libra ecosystem aims to present a solution to the cost problem of traditional e-commerce through its blockchain-based decentralized e-commerce system governed by the Libra Coin.
Libra coin is like Bitcoin or any other digital currency in that it allows users to make or accept payments directly without needing a middleman.
For instance, if you want to buy something online from an e-commerce website, rather than paying with your credit card or some other third-party gateway, you can use your Libra Coin wallet to make payment digitally. Libra Coin payments are direct between the users. Since there is no middleman, there is no need to pay a fee or commission to a third-party for your transaction. The P2P payments between merchants and clients are both cost-effective and highly secure.
At the same time, the Libra e-commerce system is free of middleman, so the users need not to pay any commission or fee to anyone in order to make a purchase online. This further reduces the overall transaction fee.
The decentralized Libra e-commerce system will bring the effective cost down for everyone, whether it’s the seller, trader or the customer.
The Libra Blockchain uses smart contracts to verify and process e-commerce transactions passing through its network. Smart Contract is a computer code that is designed to automatically execute a buy/sell order once the payment is verified. It reduces the need for a middleman to manually verify and process a transaction, thus reducing the processing cost and time.