A Hands-On Tutorial on Using Blockchain for eCommerce Financial Transactions. Part 1_IT Delight

1. Presented by IT Delight | 2022
A HANDS-ON TUTORIAL ON USING
BLOCKCHAIN FOR ECOMMERCE
FINANCIAL TRANSACTIONS.
PART 1

2. BLOCKCHAIN IN ECOMMERCE
OVERVIEW
Many advantages, such as lower costs and risks,
faster speeds, more secure data storage, and access
to previously emerging markets and demographics,
are made available to online retailers by this
innovation.
In order to attract and retain clients, 85% of businesses
with more than $1 billion in annual sales are using
blockchain-based payment methods. The blockchain is a
decentralized, public ledger that records all
transactions.

3. We’ll take a look at the fundamentals of blockchain technology first, then move on to actual
implementation. So, blockchain in eCommerce and other sectors:
WHAT IS IT?
WHY IS IT IMPORTANT?
WHEN COULD YOU USE IT?

4. HOW BLOCKCHAIN
SOLVES TRUST ISSUES

5. Essentially, a blockchain is a decentralized database that keeps track of transactions via an ever-expanding
chain of chronologically ordered data blocks. Cryptographic connections are used to join these blocks
together. Each block also includes a date, hash code of the prior block, and transaction information.

6. Bitcoin and other cryptocurrencies were the first to make use of blockchain. Together with several distinct
payment methods being in trend now, they are commonly employed by online stores. The goal was to
build a user-owned, decentralized financial system independent of regulators, banks, and governments. As
a result, individuals could take charge of their financial lives and communicate directly with one another,
cutting out the need for middlemen.
Moreover, blockchain developers recognized the issue that you cannot quickly access your funds if they
are stored in a bank account. Each transaction you make is really a command to the bank to carry out a
certain operation on your account. In this case, various risks arise, such as a bank default or various
restrictions on operations.

7. And this brings up a few more issues. You must first feel confident in the bank’s stability and
trustworthiness. As a second point, you have to hope that the bank will let you utilize your account. The
third is that your cash isn’t sitting in your hands but rather in the hands of those responsible for its
safekeeping and administration.

8. SO BLOCKCHAIN
TECHNOLOGY
ADDRESSES THESE
ISSUES THANKS
TO ITS
CHARACTERISTICS:
Decentralized
There is no central authority making or vetoing decisions, and all
transactions are processed and validated by blockchain nodes in real
time.
Transparent
Blockchain is open and accessible, allowing users to view the transaction
history and balance of any given address.
Unchangeable
The blockchain’s algorithms allow for the addition of data to the ledger,
but prevent any manipulation of the existing records.
Secure
Due to its decentralized nature, wherein a lot of nodes contribute to the
process, it is extremely difficult to hack.

9. INNOVATIVE WAYS
OF ADOPTING
BLOCKCHAIN

10. There is an organization called Hyperledger, which creates commercial industrial blockchains, and it is not
associated with cryptocurrencies. So Hyperledger, Walmart, and IBM together created a product quality
control system.
One of the problems that Walmart had was tracking contaminated products and products from the places
where various epidemics originated.

11. In some cases, tracking out the origin of the products took as long as seven days. This time was
decreased to 2.2 seconds after deploying the blockchain, which they utilized as a tracking system
to trace the route from the farm to the customer. You can read more about this case study here.
A new, Blockchain-enabled Walmart Food Traceability Initiative was created to increase
transparency in the food system and create shared value for the entire leafy green farm to table
continuum.
Walmart

12. HOW BLOCKCHAIN
TRANSACTIONS
WORK

13. Blockchain is a chain of blocks that are made up of transactions and can’t be changed after they are
created.
After an agreement is reached and signed, the transaction can officially begin. In other words, now that you
know the address of the intended receiver, you may sign to confirm the transaction and transfer the desired
amount to the designated location.
1

14. To achieve this, you’ll need a client that can connect with the node; this is accomplished with the use of a
software wallet, which may be installed on your computer, mobile device, or web browser.
2
The next step will be an attempt to add this transaction to an existing block. The block is sent to all validating
nodes for verification.
3
Each node receives a reward for the work it does during block generation and verification, which includes
doing computations and attempting to generate a valid block. The reward may include both an internal
network incentive and a user-initiated transaction fee.
4
Each new block added to the chain triggers a full network refresh, during which all nodes exchange
information and ensure that all the data is up to date. Once the network has been updated, the transaction is
considered finalized.
5

15. BLOCKCHAIN
WALLET
A blockchain wallet is simply your address on the blockchain network.
When you create it, you get 2 keys – public and private. The public key is
the address on the blockchain, and the private key is the password.
You may think of your public key as your email address, which means
anybody can know it and send you transactions using it. A private key,
meanwhile, serves as your account’s password.
A software wallet‘s function is to safely store your private key and enable
you access to the blockchain wallet.
Let’s take an example of an email. The email server where information
about your letters is stored is the blockchain itself, your node. And the
web interface with which you view these letters is a software wallet.

16. SIGNING UP
BLOCKCHAIN
TRANSACTIONS
This is a general scheme,
which is not particularly
needed for use, it might be
useful for understanding.
When a transaction is created
and signed, it is encrypted.
Let’s consider it in more detail.
When one wants to make a transaction, the associated information is
always encrypted using the recipient’s public key.
Then one uses their private key to confirm that they want to send this
encrypted message, which means signing it up. Only after this step,
the transaction is made.
A recipient, in turn, uses their private key to decrypt the information.
This way they can see a transaction’s content and a sender’s address,
thereby determining who sent the money.
2
3
1

17. Let’s assume we have a transaction and all of its associated data (the data itself may or may not be
encrypted – it depends on the blockchain). We put our private key on it, indicate the public key of the
receiver, and send it to the network. The rest is made by the blockchain mechanism.
And once everything has been double-checked, the transaction is added to the block.

18. BLOCK CREATION
AND
FUNCTIONING
the timestamp
the preceding block’s hash.
Multiple transactions’ hashes are recorded in the blockchain.
What this means is that their content is conveyed in a single line
that is always presented at the same length.
The term for this process is “hashing”.
Then, each of these hashes is combined with the previous one to
create a new hash, and so on, until a single hash of all transactions is
generated and added to the block.
The block also includes:
how they function
the process through which
a block is made.
Let’s have a little discussion
regarding blocks:

19. BLOCKCHAIN IN
ECOMMERCE: USER
INTERACTION MECHANISM

20. Now that we’ve covered the blockchain’s technical underpinnings, we can go on to discuss how it may be
put to use.
First and foremost, understand that the blockchain is a secure, closed system.
Second, in order to communicate online, so-called public nodes are used.

21. THE OPERATION OF A TYPICAL
SOFTWARE WALLET LOOKS LIKE THIS
They employ public nodes hosted by other
parties and route wallet-originated
requests to the relevant nodes. Here, the
wallet and other decentralized web3 apps
are the primary means of user interaction.
Wallet integration is possible if you allow
these applications access. But what is
meant here is public keys, not private
ones.
As soon as the program detects your public key,
it knows you want to take some action. You’ll be
prompted to sign your transaction using a
private key if the wallet verifies that you
intended to do this operation.
When you confirm an action by signing it, the
app will submit the transaction to the
decentralized system.
2
3
1

22. FINAL THOUGHTS
Now that we’ve covered the fundamentals of how the blockchain in eCommerce works, we can move on to
smart contracts. Keep reading about it in the second part of the article.
For more information on this topic, you can follow the link A Hands-On Tutorial on Using Blockchain for
eCommerce Financial Transactions. Part 1

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