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Blockchain May Make E-Commerce Cheaper, Fairer

Besides Blockchain, their proposed solution involves "smart contracts" and game theory

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Blockchain, E-Commerce, Cheaper
A Blockchain-based system that allows buyers and sellers to interact directly can make e-commerce platform for digital goods "cheat proof" and the products cheaper. Pixabay

A Blockchain-based system that allows buyers and sellers to interact directly can make e-commerce platform for digital goods “cheat proof” and the products cheaper, says a study by India-origin researchers.

Blockchains allow multiple stakeholders to transact money or data virtually over linked peer-to-peer computer networks.

Besides Blockchain, their proposed solution involves “smart contracts” and game theory.

“Our scheme offers potentially a big improvement over the state-of-the-art in electronic commerce because it allows buyers and sellers to interact directly with each other without the need for third-party mediators of any kind,” said Bhaskar Krishnamachari, Professor at Viterbi School of Engineering, University of Southern California, the US.

Blockchain, E-Commerce, Cheaper
At present, the system works only with digital goods because physical products can’t have a cryptographic hash associated with them. Pixabay

“It uses a dual-deposit method, escrowing a safety deposit from both buyer and seller that is returned to them only when they behave honestly. And the verification of who is at fault and who is honest is done automatically by the smart contract,” added Krishnamachari.

This “smart contract” stores a good’s digital hash code or “digital fingerprint”.

Krishnamachari created an algorithm that runs on a programmable Blockchain as a “smart contract” with Aditya Asgaonkar, a recent undergraduate computer science alum at BITS Pilani

Here’s how the system might work:

An author wants to sell her digital book, but she hopes to avoid going through Amazon or some other company that takes a commission.

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Instead, she uses Asgaonkar’s and Krishnamachari’s blockchain-based solution and lists the book’s price at $20. An interested buyer contacts her.

To ensure an honest deal, both the buyer and seller agree to pony up a $10 deposit through a programmable Blockchain platform.

The author then sends the digital book to the buyer, who could only access it by making a verifiable payment for the correct amount.

If the transaction satisfies everybody, then both parties receive their deposits back.

Blockchain, E-Commerce, Cheaper
Blockchain-based system that allows buyers and sellers to interact directly can make e-commerce platform for digital goods “cheat proof”. Pixabay

But what if someone tries to cheat? What happens, for instance, if the seller intentionally sends the wrong e-book? What recourse does the aggrieved party have?

This is where the so-called smart contract kicks in.

The contract stores a good’s digital.

The buyer has access to that digital hash code before making a purchase. If they receive an item with a different hash code, however, they can dispute the transaction.

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In this instance, the seller would forfeit their deposit after the algorithm determined that they had attempted to cheat the buyer.

At present, the system works only with digital goods because physical products can’t have a cryptographic hash associated with them.

However, physical goods stored in a safe-box that can be opened with a digital password could be potentially transacted using their system.

Asgaonkar presented the researchers’ joint paper at the IEEE International Conference on Blockchain and Cryptocurrency in Seoul, South Korea. (IANS)

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Sellers Independently Set Their Prices on Our Platform and We Don’t Interfere: Amazon India

Amazon has more than 50 fulfillment centres in the country and provides several other facilities to the sellers

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Amazon
Amazon has the largest storage space -- 260 million cubic space available for any seller to use. Sellers continue to use Amazon's facilities so that they do not have to do the operational logistics to ship the product. VOA

Discarding allegations of deep discounting and predatory pricing, a top Amazon India executive on Monday asserted that sellers set their prices independently and the platform follows government rules very carefully in the country.

“Amazon is a 100 per cent pure marketplace in India. Sellers set the prices on their own. We do not interfere there at all,” Gopal Pillai, Vice President, Seller Services, Amazon India, told IANS in an interview.

“We have provided the tools and system needed for sellers to manage their business in an effective way,” he added.

The assertions come at a time when the Confederation of All India Traders (CAIT) has approached the government for its intervention regarding the “deep” discounts offered by e-commerce majors like Amazon and Flipkart during festival sales.

CAIT alleged that the two e-commerce majors flouted the norms for the foreign direct investment (FDI) by carrying out festival sales.

Following the complaints, the Department for Promotion of Industry and Internal Trade (DPIIT) sent questionnaire to Amazon and Flipkart over their adherence to the FDI norms. The responses sent by the e-commerce players are reportedly under examination by DPIIT.

“We follow government rules very carefully. We have been compliant… so we do not see anything to discuss there because we take compliance very seriously,” Pillai said.

“We started with 100 sellers six years ago. Today, we have more than 5.5 lakh sellers in India. Businesses continue to grow across the board,” he noted.

Amazon
Discarding allegations of deep discounting and predatory pricing, a top Amazon India executive on Monday asserted that sellers set their prices independently and the platform follows government rules very carefully in the country. Pixabay

In 2019, Amazon India launched close to 1.6 lakh sellers.

“This year alone, we were able to produce more than 18,000 millionaires and 3,500 crorepatis in the country,” Pillai informed.

Amazon India on Monday also announced that it would organise the second edition of its “Small Business Day” on December 14.

The event will offer customers the opportunity to discover and purchase unique and hard-to-find products from start-ups, women entrepreneurs, artisans and weavers under its various programmes such as Amazon Launchpad, Amazon Saheli, Amazon Karigar as well as enjoy other deals and offers extended by lakhs of SMBs and MSMEs .

“Amazon Karigar as a programme has more than 8 lakh artisans and weavers. Amazon Saheli has 30 partners and more than 2 lakh women entrepreneurs participating in it. Amazon Launchpad has more than 900 brands with more than 200 brands being crorepati sellers,” Pillai said.

Amazon India said it will organise e-commerce awareness workshops in five different clusters in the country in partnership with the Confederation of Indian Industry (CII). These workshops will guide how small and medium sellers can get online, what are steps to follow, etc.

“We are the largest marketplace in the country and we have been having more sellers and more selections consistently. We make sure that our experience on mobile is good, our website experience is seamless and we also focus on vernacular experience so that we can have sellers coming from every part of the country,” he elaborated.

Amazon has more than 50 fulfillment centres in the country and provides several other facilities to the sellers.

Amazon
Amazon India said it will organise e-commerce awareness workshops in five different clusters in the country in partnership with the Confederation of Indian Industry (CII). These workshops will guide how small and medium sellers can get online, what are steps to follow, etc. Pixabay

“We have the largest storage space — 260 million cubic space available for any seller to use. They continue to use our facilities so that they do not have to do the operational logistics to ship the product. Our backhouse can do it.

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“Similarly, we also have service provider network where we have 700 service providers across 100 cities and they continue to provide services in imaging cataloging and everything else. We have a lending marketplace through which sellers can get loan from Rs 50,000-Rs 5 crore with a very competitive interest rate,” Pillai said. (IANS)