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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)

Next Story

Amazon Ranked India’s Most Trusted E-Commerce Brand

The other players in the top 10 were Flipkart, LinkedIn and Snapdeal, in the seventh, eighth and ninth ranks

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Amazon, India, E-Commerce
The brands that focus on creating trust along with profits and growth are the ones that will survive in this business.VOA

E-commerce major Amazon is the most trusted among the Internet brands in India, followed by Google and Facebook, according to a recent report by TRA Research.

Among the 32 Internet brands surveyed, Indian messaging app Hike ranked fourth, beating Facebook-owned Whatsapp, which ranked 10th, said brand intelligence and data insights company’s “Brand Trust Report 2019”.

Indian accommodation service provider and online hotel room aggregator Oyo Rooms was at the fifth position. The Indian online taxi aggregator Ola ranked sixth, way ahead of US-based Uber, which ranked 14th.

Online payment service provider Paytm ranked 19th, one place above its global peer PayPal.

Amazon, India, E-Commerce
E-commerce major Amazon is the most trusted among the Internet brands in India. Pixabay

Commenting on the report, N. Chandramouli, CEO, TRA, said: “Many Indian Internet start-ups are leaders in their categories, which is no mean feat. The brands that focus on creating trust along with profits and growth are the ones that will survive in this business.”

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The other players in the top 10 were Flipkart, LinkedIn and Snapdeal, in the seventh, eighth and ninth ranks, respectively. (IANS)