BLOCKCHAIN-BASED E-COMMERCE: APPLICATIONS AND CHALLENGES

Abstract

The main purpose of the study is to investigate the application models of blockchain-based e-commerce and the issues related to its implementation challenges. This article examines how blockchain can address long-standing weaknesses in electronic commerce—payment disputes, chargebacks, fraud, and limited operational transparency—through a structured review of recent literature and practice. It answers two questions: (1) Which blockchain applications are relevant to e-commerce? (2) What challenges arise when integrating blockchain into this domain? Findings indicate that decentralized ledgers with immutable records and strong cryptography can raise transaction reliability, reduce dependence on intermediaries, and strengthen buyer–seller trust. High-value use cases include end-to-end supply-chain traceability, product provenance verification, reputation management, automated settlement via smart contracts, and faster, evidence-based dispute resolution. Yet adoption remains constrained by scalability and storage efficiency limits, privacy risks on public ledgers, the problem of validating data before it is written on-chain, smart-contract immutability and upgrade paths, upfront and ongoing costs, and immature standards and regulation—especially for SMEs. A pragmatic path forward is a hybrid architecture that combines public and permissioned chains, stores sensitive data off-chain while anchoring proofs on-chain, and uses fine-grained access control. Integration with IoT can deepen auditability across logistics flows. The article recommends measuring net value on real datasets (e.g., cost-to-serve, dispute cycle time, fraud incidence) and establishing clear governance and compliance frameworks. Overall, blockchain can serve as a “digital infrastructure of trust” for e-commerce, but its potential is realized only through phased deployment, sound governance, and regulatory alignment.