Blockchain To Help E-commerce Become Cheaper And Fairer

There will soon be an e-commerce platform making digital merchandise “cheat proof” and the goods lower-priced, thanks to a system based on Blockchain where sellers and buyers can directly connect to each other through it. With Blockchains, multiple stakeholders can exchange cash or information virtually through computer networks. Moreover, “smart contracts” and game theory also will change the way we sell and buy goods online.

Blockchain

The University of Southern California Professor, Bhaskar Krishnamachari said that a great improvement over the state-of-the-art in e-commerce is offered as suppliers can work with consumers while there is no demand for other intercessors. The “smart contract” was created by Krishnamachari and Aditya Asgaonkar, a BITS Pilani undergraduate alumni.

Saying about their scheme, Krishnamachari also pointed out that a dual-deposit methodology is employed to escrow a security deposit from both suppliers and consumers. It is backed to them only when they are honest. It's actually the duty of the "smart contract" to get to know automatically where the fault came from.

It is said that a good’s digital hash code and “digital fingerprint” are stored in this "smart contract".

How Does The System Work?

For example, an author has a demand for selling her digital book without going through any third-party companies. Instead of using Amazon, she chooses the solution above and sells the book at price $20.

How to make sure that the deal is implemented honestly? This is implemented when both the supplier and customer comfort to give a $10 deposit through a Blockchain platform. Then, the buyer receives the digital one which could only be accessed when he/she pay the correct amount of money.

The buyer could only open the good by paying the correct amount of money

Their deposits will be sent back if both parties satisfied with the transaction. However, what happens when there is any cheat? If the supplier sends the unright e-book on purpose, what does the aggrieved party receive?

Now, the smart contract will kick in. As said before, the contract keeps a good’s digital hash code. And before creating an acquisition, the customer has to access this code. Thus, a different hash code can make them doubt the exchange.

As a result, the supplier would lose their deposit as the algorithmic program determined that he/she had tried to cheat the customer. Now, the system just deals with digital goods instead of physical products which have no cryptographical hash related to them. Nonetheless, some physical goods still could be potentially transacted using their system if they are kept in a safe-box that can be accessed with a digital PIN.

The researchers’ joint paper was presented by Asgaonkar at the IEEE International Conference taking place in Seoul, South Korea.