The current e-commerce industry, which is mostly centralized, is limited by many challenges such as lack of financial services, high cost/fee of transaction, the need and cost of middlemen, high competition, data security, complex process, fraudulent actors, among others. The integration of decentralized technology like Blockchain can help solve most of the e-commerce industry challenges. Libra Coin (LC) is a positive step in this direction.
What is Libra Coin? Why it can be the next big thing in e-commerce
Libra Coin is a digital currency created with the primary purpose of making e-commerce transactions more convenient, instant and affordable.
One of the biggest challenges of the e-commerce industry is the cost & complexity of transactions. Most of the existing platforms use third-party payment gateways that come with their own set of limitations, such as high transaction fee, high rates of failure, lack of transparency & security, high processing times, etc.
A blockchain-based payment system works on the principles of decentralization, which means the payments are peer-to-peer (free of middlemen), secure, fast and cost-efficient.
Let’s try to understand this with the case of the Libra Coin (Ecosystem).
Libra Coin is a digital payment currency designed to make/accept e-commerce payments. So, a user who wants to buy something online will be able to use his/her Libra Coin wallet to make direct and secure payments to the seller. The idea is to minimise the role and need of middlemen in e-commerce transactions, which will increase security and reduce the cost.
Other than that, the Libra Ecosystem itself offers a decentralised platform for facilitating e-commerce transactions through Smart Contracts.
A Smart Contract is a blockchain application that can be used as a programmable agreement between trading parties. The contract enables automated transactions based on the underlying conditions.
The Libra blockchain smart contracts are designed to manage a number of e-commerce tasks from logistics to payment processing, supply and customer feedback.
Besides that, the Libra blockchain enables automated recording of all transactions and e-commerce data on its secure, immutable network, which brings transparency in e-commerce transactions. The platform can also provide supply chain details such as product origin, ingredients, processing, etc. to the customer, which boosts trustability.
Moreover, the e-commerce dealers and organisations can use the decentralized database system of the Libra blockchain to securely and privately store & manage their business data, records, digital assets, content, website, etc.
Overall, the Libra blockchain ecosystem makes e-commerce processes more efficient by reducing the cost and complexity in management and bringing more transparency.
Transparency is crucial in e-commerce payments. Most of the existing payment gateways used by e-commerce platforms are controlled by third parties, including credit card service providers, banks, etc. This method of payment is not very secure and/or transparent. Moreover, the centralized processing & management of payments increases the probability of errors.
E-commerce payments using the Libra Coin will not only bring transparency in transactions but also it will ensure payment security and reduce errors. Since all blockchain transactions are stored in a shared ledger, they can be easily verified in case of a dispute.
Other benefits of the Libra decentralized blockchain ecosystem for e-commerce include faster (almost instant) transaction processing, high security, privacy, ability to verify, digital payment options, low-cost global transactions, reduced middlemen fee, and dependable data security.
For more details, feel free to read the Libra project whitepaper.