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BlockChain in eCommerce: How to Use for Supply Chain Efficiency


Mayank Nailwal

Content Marketing Specialist @ Shiprocket

December 12, 2019

7 min read

The eCommerce industry has undergone several phases of transformations. It’s booming growth has made it one of the most profitable sectors of the century. Blockchain Technology is the latest centerpiece of inventions surrounding this sector. It’s a surging technology that is anticipated to grow by leaps and bounds in the next couple of years. In case you haven’t heard of Blockchain before, let’s start from scratch.

What is Blockchain Technology?

Blockchain is a data structure that accommodates transactional records. It’s a technology that ensures the safety of the data, along with transparency and decentralisation. Figuratively speaking – you can visualise the technology as a chain of records, i.e. stored in the form of blocks. These blocks aren’t administered by just one but numerous authorities involved in the network. 

In other words, BlockChain is a distributed ledger that is open for everyone for storing records. Once something is recorded in the BlockChain, it is nearly impossible to alter it. All the transactions on the technology are guarded with a digital signature for verifying its authenticity. 

The best way to comprehend Blockchain is through an example you can relate with. Assume you are sending money to a friend of yours who lives far off from your place. You may prefer sending money via UPI or Paytm, however, the use of such applications involves third-parties that charge transaction fees as an excess amount for the service. 

Furthermore, there is always a risk of data security as hackers can meddle with the network and rob your money. Blockchain tech provides you with the advantage of eliminating the third-parties, allowing you to send money directly to anyone, with enhanced data security.

Since the Blockchain network is decentralized (not limited to a specific location where all the data is stored),  – hackers can’t steal money as they can’t find the data in one particular place.

What is eCommerce Blockchain?

eCommerce Blockchain refers to the use of Blockchain technology in eCommerce. Considering eCommerce stores have an abundant number of customers, along with massive inventory and transactional data – data security for such platforms is of significant concern.

eCommerce Blockchain ensures impeccable data security as the technology encompasses blending the transactional data into blocks and further, connecting every block in the form of a chain. Hence, the data gets segregated in separate blocks, making it hard for anyone to obtain any information. Changing a block, in turn, requires altering the various hashes, ensuring a reliable network.

If you’re running your eCommerce store on Magento, or WooCommerce (click here to find out the number of sales channels you can integrate with Shiprocket), you can integrate your eCommerce store with Blockchain technology for premium results.

How eCommerce Blockchain is Beneficial for your Business?

The relevance of Blockchain in eCommerce is significantly high in context with logistics management. Considering there are half-a-dozen primary challenges in the supply chain that range from recordkeeping to inventory management; Blockchain technology ensures maximum efficiency for eCommerce businesses concerning the problems mentioned above. 

Provenance Tracking

Provenance tracking refers to the identification of each piece of data – from where it comes and whether it is up-to-date or not. In a Blockchain-backed eCommerce management – recordkeeping and provenance tracking becomes easier to access as all the data via RFID tags, along with the embedded sensors. Furthermore, it becomes simpler to detect anomalies in any given segment of logistics.


Since Blockchain encompass decentralisation (described in detail below), there are no transaction fees involved. Due to this, the technology turns out to be cost-effective as all the online retailers get comparatively better rates, while the customers enjoy relatively lesser prices. 

Data Security

The data of the consumers remain highly vulnerable in most of the eCommerce stores. Irrespective of being centralised or powered with cloud-storage, the data is always susceptible to theft. Blockchain technology provides a decentralised system, hence, ensuring an impossible to hack network where the information is stored in different blocks, instead of a single place.

Inventory Management

Blockchain technology makes inventory management hassle-free. By digitally storing all the data, it eases the administration of stock as retailers can abstain from unnecessary expenditure on recruiting human resources time and again to manage the inventory and instead, rely on highly secure technology providing robust encryption.

How Does Blockchain Work?

Understanding Blockchain begins with recalling BitCoin. A talked-about cryptocurrency, BitCoin was created through Blockchain Technology. It was the first product arising out of Blockchain technology. As mentioned before, each block in a blockchain network accommodates data. However, each block also stores ‘hash’ of its previous block. 

Hash is a technical term that refers to a numerical code belonging to a particular block. In case the data inside a block is altered, the hash also undergoes alteration. It’s this connection within the blocks, through hash that strengthens the security of the Blockchain.

Hackers may try to meddle with the network, but they can’t steal due to hash. Every time they try to make alterations in the network, the hash also gets modified. They can only make successful transactions when the hash is correct, making it impossible for them to steal. The process of a Blockchain network involves:

1) Using public and private keys for the formation of a digital signature to ensure safety and consent.

2) Allowing partakers to perform numerical verifications for agreeing on a specific value.

3) The sender uses the private key for announcing a transaction over the network.

4) Upon using the private key, a block gets generated encapsulating time stamp, digital signature, along with the public key for the receiver.

5) The process of validation begins as the details of the said block gets broadcasted through the network.

6) The miners then solve the numerical puzzle required for processing the transaction.

7) Whosoever in the miners derives the puzzle gets rewarded with Bitcoins.

8) When most of the nodes in the network comply, the said block is time-stamped and added to the existing Blockchain.

9) The added block can then accommodate anything from information to money.

10) The existing copies of the added blog are then updated across all nodes on the network.

Features of BlockChain Technology


BlockChain technology falls outside of the regulation of a central jurisdiction, implying that its control is limited between the buyer and the seller. No involvement of a third-party ensures zero chances of manipulation with the stored data.

Banks and governments don’t have the authority to devalue or inflate BlockChain currencies. In case the economy of a country collapses, the currency of such a nation will suffer immensely. However, there will be no damage done to the cryptocurrency functional on the blockchain network.

Peer-to-Peer Networking

Zero involvement of a third-party through Blockchain’s peer-to-peer model allows the partakers on the network to possess a duplicate copy of all transactions, enabling permission through a machine consensus.

If a participant wishes to transact from one end of the world to another, he or she can self-transact within seconds on the Blockchain network, eliminating additional charges.


This feature of BlockChain underlines the limitation in making modifications to the stored data as the data stored in the BlockChain network cannot be easily altered. For making modifications, you will need to alter the Blockchain in its entirety considering every block accommodates a hash of the previous block.

It is highly complex for an individual to change all the hashes, signifying, the information stored in a BlockChain is unsusceptible to changes due to immutability.


Blockchain technology makes it easier to identify the tampering of data. Even a single block of data that is attempted for moderation can be identified. Data tampering can also be distinguished via hashes, as described above.


Blockchain is a revolutionary technology that will transform all eCommerce marketplaces. Apart from being faster, reliable, and relatively cheaper – it is an unparalleled means for incredible data security that eliminates third-party interferences. 

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