HOMEWORK TASK 6
INSTITUTION: STEEMIT CRYPTO ACADEMY
COURSE: All About Blockchain Security 2
CRYPTO PROFESSOR: GBENGA
HOMEWORK TASK: The Security Benefits of Applying Blockchain Within any Industry, and the impact of cryptocurrency on the industry.
The first ever transaction via blockchain was 10,000 BTC paid to a retailer - papa John's, for 2 pizzas. Ever since then, blockchain has gone on to record so many other transactions and also found more applications outside finance. Social media platforms like steemit now exist on blockchain, with some gaming and healthcare providers also migrating to it.
The security feature of blockchain is one reason why it has garnered so much adoption especially from industries that deal with data management and financial transactions. One of such industries is the retail industry.
Being the first industry to ever use the blockchain, the retail industry has gone on to integrate blockchain solutions into its operations. Not for want of options but as a result of the benefits derived from blockchain technology. The rest of this post expatiates these benefits.
Before diving into the security benefits of applying blockchain, here's a quick mention of what blockchain's security is like.
Blockchain security involves digital signatures, hashing and cryptography, to secure data on the blockchain. Data sent over the blockchain is usually large and in raw form. Through a process called hashing, these data is converted to a fixed length of characters. For financial transactions, these data include the addresses of both sender and receiver, amount sent and a time stamp.
After all the data are hashed, it is signed using cryptography. The cryptography here is know as public-key cryptography and it involves encryption of the data using a public key and decryption of the same data using a corresponding private key.
When all these are completed, the data is said to have been digitally signed. With digital signing, there is no tampering with the data as it is encrypted by the sender, only to be decrypted by the receiver.
THE RETAIL INDUSTRY
Retailing is the collection of all the activities engaged in, in the process of selling or renting consumer goods or services to the final consumer. It is a very important economic activity and as such, its industry is a very important one. Notable players in this industry include Amazon (US), AliExpress (China), Jumia (Nigeria), Shoprite (South Africa), etc.
The retail industry engages in several activities to perform its functions. These includes sales, procurement, managing of inventory, advertising, hiring, payment of salaries, data management, after sales services, deliveries, etc. The efficiency with which these activities are carried out affects the success of the industry.
From the activities listed, we see some financial areas where blockchain can find application. These areas include procurement, sales, and payment of salaries. Applying blockchain technology can increase the efficiency of these activities. The security of blockchain for instance, has lots of benefits it can bring to these activities. These benefits are discussed next.
THE SECURITY BENEFITS OF APPLYING BLOCKCHAIN TO THE RETAIL INDUSTRY
When you have a blockchain system that transfers data between parties in such a manner that only the parties involved gets to access the data, here are the benefits that accrue to the financial activities of the retail industry
The recieveing party won't need to be bothered about the authenticity of the transaction. Also, considering the fact that once a transaction has been sent over the chain, it can not be reversed, the receiving party (the retailer) can be rest assured of the authenticity of the payments they receive. They completely trust the payment process.
2. NO CENSORSHIP
Outside of the blockchain, accounts can be frozen by central authority for one reason or the other. With blockchain security however, that's not possible as no third party can tamper with any transaction or with any wallet address, private or public key. Retail investors can freely carry out their transactions without fear of censorship or ban.
3. PROOF OF TRANSACTIONS
Blockhain is a public ledger that can be accessed by anyone. Also, if a customer makes a payment to a retailer via blockchain, the payment can not be hidden or erased by the retailer or any party intending to do so. So, since anybody can access the details of such transactions, proving the existence of such transaction doesn't require any fuss.
4. SECURITY OF FUNDS
On the blockchain, the wallet owner who holds the keys of the wallet, has access to the funds alone, unless they permit another party. There is no case of theft, or robbery or confiscation as anyone who would access the wallet needs the keys to the wallet and these keys are in th possession of the wallet owner.
5. RECORDS OF TRANSACTION
Records of transaction is also a security measure. Since transactions are recorded, if someone who was granted access to the wallet by the owner, misuses the funds, the transactions involved in that misuse can be traced and moreover, the records of the transactions on the blockchain can't be erased. This checkmates any attempt of internal theft
THE IMPACT OF CRYPTOCURRENCY ON THE RETAIL INDUSTRY
The impact of cryptocurrency in the retail industry cuts across the retailers, manufacturers/wholesalers and final consumers.
For the wholesaler and final consumers who engage in cash flow activities with the retailer, these are the impact of cryptocurrency on the retail industry
1. FAST TRANSACTIONS
There's nothing better than fast transactions when it comes to speed. And for stats, TRON processes 2,000 transaction per second (tps). Compare that to PayPal's 193 tps. Although, VISA is still the king of speed at 24,000. VISA however bows to cryptocurrency when it comes to the next impact - transaction fees
2. TRANSACTION FEES
For customers who want to pay for what they've bought, the sound of free transactions sketches a smile on the face. Not even VISA offers that. The idea of leaving fees out of one's shopping budget is one huge impact brought about by crypto currency. For the records, TRON offers zero transaction fees.
3. GLOBAL TRANSACTIONS
Transactions can be carried out across borders without any restrictions in cryptocurrency. Unline like the restrictions posed by fiats where it's difficult, expensive, or impossible to carry out transactions across borders. Cryptocurrency removes the currency barrier in retail transactions.
4. EASE OF PAYMENTS
For the wholesale and final consumer, receiving and making payments respectively is relatively easy. Only public addresses and/or private keys are required. Where non-custodial wallets are used, there are no limitations on the amounts that can be spent by the final consumer and they don't need to verify their identities.
Some final consumers will fancy being anonymous while making their transactions. Cryptocurrency brings this to the transaction. It provides a means of carrying out anonymous but secure transactions.
For the retailers in the industry, there are lots of impacts which includes all of the above-mentioned and more, like -
6. ADDED PAYMENTS METHOD
In addition to whatever payment method they may be offering, cryptocurrency offers the retailer an additional method of payment. This gives the retailer an edge over their competitors who are yet to adopt cryptocurrency.
7. BRAND IMAGE ENHANCEMENT
When a retailer adopts crypto, it gives them a positive image especially in the eyes of crypto enthusiasts which, fortunately, are quote numerous in the world today.
8. REMOVAL OF MIDDLEMEN
Every retailer's wish, especially the big ones, is to boycott middle men wherever possible. This is why some retailers opt to get the products directly from the manufactures and sell them directly to the consumers. This is because, middlemen are always around for a chunk of the profit and retailers don't want this, they want to maximize their profit. Middlemen associated with payments are very hard to evade, as retailers need the banks or payment providers to make and recieve payments. However, with cryptocurrency, all the middlemen associated with payments are discarded.
Cryptocurrency and blockchain technology is very beneficial to the retail industry whose activities include all that is required to sell consumer goods to final consumers. Blockchain provides adequate security to ensure that payments are safe and censorship, or fraudulent acts are not applicable.
Cryptocurrency improves the image of any brand which adopts it, as well as gives the retailer another payment option. The need for payment flexibility in retail cannot be overemphasized as every customers payment choice ought to be catered for. In all, cryptocurrency in the retail industry, will be a good adoption.
Thanks for reading.