What is Web3 and Why Decentralization is Key to Your E-Commerce Business

Decentralization isn't just an inherent part of blockchain technology; it's at the core of every single web3 application and platform on the market today.

It allows developers to break away from traditional cloud computing applications and create more secure, more resilient, and more responsive tools and services that are tailored to meet the needs of specific industries, organizations, or user groups.

In this article, we'll discuss how web3 and decentralization are changing how people work together and the impact they're having on individual businesses around the globe.

What is blockchain technology?

Blockchain technology exists on a decentralized network of computers that are capable of processing information faster, more accurately, and with less human involvement. As a result, blockchain technology offers solutions for many business-related issues ranging from data security to supply chain transparency.

The problem: In order for businesses to utilize blockchain technologies in their everyday operations, these technologies must be accessible through an easy-to-use interface. This is where web3 steps in.

What is Web3?

To put it simply, Web3 is a blockchain-based protocol layer that allows users to access decentralized applications (dApps) without having any prior knowledge of blockchain technology or cryptocurrencies.

For example, if you wanted to purchase movie tickets using your debit card online on a ticketing platform, you would use traditional payment methods like Visa or MasterCard. Through APIs, web3 makes blockchain technology usable by companies of all sizes by allowing them to create dApps based on existing decentralized networks, allowing you to interact with services, and send and receive payments in cryptocurrency.

How does decentralization apply to E-commerce?

What if you could run an E-commerce website without relying on any third parties? It sounds like science fiction, but blockchain technology enables just that. By using decentralized applications (or DApps) built on a blockchain, you can eliminate intermediaries to create efficient services for both users and businesses.

Not only does DApp enable E-Commerce without any third parties, it also empowers merchants by giving them control of their own data. With time, we'll see more companies decentralizing their businesses through tokenization.

Advantages of decentralized E-commerce

Decentralized commerce has a variety of advantages, including better reliability — the absence of centralized points of failure. In a decentralized E-Commerce system, no single entity controls or holds your funds (with all its implications for regulatory compliance).

Transaction fees for payment processors such as Stripe or Paypal can range from 3-5%. These transaction fees may sometimes be reflected in pricing on certain E-Commerce sites.

On the other hand, cryptocurrency transactions typically have almost no fees at all (just a few cents per transaction), or are only charged a small flat fee per transfer, depending on which blockchain you want to use.

Additionally, blockchain technology's transparency makes it possible to easily trace transactions, providing an advantage over traditional finance systems where money has to be tracked manually.

In other words, decentralized E-Commerce (DComm) offers everything E-commerce needs to thrive. It also offers much more than what traditional models have been able to provide thus far.

Add decentralization to your E-commerce business

Want to make your E-Commerce business secure? Want to avoid massive data breaches? Want to give your customers control over their personal information? Look into adding decentralization to your E-Commerce business. In a decentralized network (using web3), people can control their own data — no company or organization needs access or permission to store or transmit it.

With smart contracts controlling transactions in tokenized systems like Ethereum, neither party needs to worry about fraud. The technology powering web3 has helped disrupt a number of industries including finance, E-Commerce, travel and hospitality, health care — and you can add it to your business as well.

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