Online retailers and those with bricks and mortar shops want to know how to use blockchain and to establish if it is a better system than the one they use now. Answering these questions is key to getting retailers to adopt blockchain solutions.
As Nikki Baird writes at Forbes, retailers are not so interested in how blockchain works, or how tokens are generated; they simply want to know how blockchain could work for them. Baird states there are three questions they need answered, and they are: Performance, Privacy and Ease of Use.
And as she points out, retailers don’t want to hear from platforms about how they intend to achieve these three things; they just want to have all of them in an operational blockchain.
So far, we’re not at that point; there is a way to go with each of the qualities retailers need to see.
Performance
When we talk about performance in relation to blockchain, we are really talking about scalability. That is the ability to handle lots of transactions, primarily for payments, but advertising is also important for online retailers. With payments, the transaction time can’t be slower than it is with the current system, and to win retailers over it needs to be faster. At the moment neither bitcoin nor ethereum can match Visa’s transaction times.
Privacy
Privacy is an important element of blockchain and cryptocurrency. The whole point of Bitcoin was to create a digital currency that could be traded anonymously, but is it truly anonymous?
Even if you don’t know who owns bitcoin, you can observe their behaviour on the blockchain. There are even businesses that track bitcoin usage and use the info to identify anonymous owners. This flaw is something that needs to be addressed, so that there is greater privacy on the blockchain, but without sacrificing scalability.
Baird writes, “For retailers, there is the additional issue of personally identifiable information and GDPR, Europe’s regulations around consumer privacy.”
Her answer to the issue is: “Blockchain has the potential to make all of that much easier, if we can evolve to a place where consumers can use blockchain to store their personal information, and decide and control which companies have access to which pieces of information.”
But as she points out, there are lots of hurdles to leap over before we arrive at this point, including identifying who is providing the service and doing more on the security of passwords.
Ease of Use
This is very important in a retail environment. And it is the one element that has been addressed more fully than the others. Baird highlights those companies that “bring blockchain to consumers without making it readily apparent that they are based on blockchain,” and “crypto wallets that make it easier to navigate between traditional and crypto currencies.”
Retailers are traditionally quite conservative, and the blockchain is still not mature enough to win them over. As Baird says, “For blockchain to make a difference in retail, it has to be much more about the experience than the technology.”
Blockchain will get there, but it isn’t ready yet!