Deciphering Decentralized vs. Centralized eCommerce App

December 26, 2024

One major factor catalyzing the success rate of the digital world is eCommerce platforms. When inoculated with blockchain, decentralized apps (DApps) become the discussion. They gained momentum in 2017 when Bitcoin caught the public’s eye. Currently, over 5,000 DApps are active, unveiling rapid growth.

Though centralized apps have existed for decades, they dominate the market, with millions of options for users. Companies and users love them. However, they need more availability, integrity, and security, issues that DApps aim to solve.

What exactly is a DApp? How does it differ from centralized apps? What are the steps to develop both types? Get answers to all!

This blog post delves deeper into how DApps empower eCommerce businesses to overcome security and operational challenges.

Decentralized Apps (DApps) vs. Centralized Apps: Key Differences

DApps gain traction in the tech industry. Their decentralized infrastructure enhances security and diminishes vulnerability to cyber-attacks. In contrast, centralized apps depend on a single server, making them more susceptible to breaches.

DApps are poised to transform business operations by providing secure, transparent alternatives to centralized apps. Industries like finance have already leveraged DApps, particularly in decentralized finance (DeFi), and other sectors such as supply chain management and healthcare benefit from secure data sharing. With growing demand, businesses must consider adopting DApps to maintain a competitive edge.

DApps offer transparency and immutability through blockchain app development technology, ensuring that data, once recorded, cannot be altered. However, the app owner can modify or delete centralized apps.

Prevailing Decentralized eCommerce Apps Over Centralized eCommerce Apps

Decentralized eCommerce platforms persuade where the limitations of centralized eCommerce platforms hinder users’ experience. DApps eCommerce platforms feature better data security, user-driven experiences, and lower transaction fees. Below is how they transform the industry:

• Augmented Data Security

Decentralized eCommerce apps possess blockchain technology for enhanced data security. The app stores user information on a distributed ledger, making it impossible for hackers to access. It diminishes the risk of data breaches and fosters user confidence.

• Lower Transaction Fees

Decentralized eCommerce app development encourages lowering transaction fees. Centralized eCommerce platforms like Bigcommerce often charge high fees, decreasing buyers’ and sellers’ profits. Conversely, DApps facilitate transactions, saving big on investment.

• Empowering User-Driven Experiences

Decentralized eCommerce apps provide users control. Users can manage their data and transactions without interruption of intermediaries, developing a more credible and transparent environment.

Influence of Decentralized Inventory in Your eCommerce Business Growth

Decentralized inventory has paved the way for online businesses to have whole new business opportunities. It persuades businesses to deliver goods to clients swiftly with smaller and local facilities.

Though centralized online businesses have provided ease to sellers by allowing them to operate from anywhere, fulfilling customers’ demands for receiving goods quickly remains a constraint. It is where decentralized eCommerce stores started engaging people, incredibly impatient ones. Here’s how-

Lower Shipping Expenses

Decentralization for your online business doubles the distribution options by adding a single warehouse location for goods. Strategic placement of your facilities can reduce transit times and shipping costs by positioning warehouses closer to delivery destinations.

Expand Your Customer Base

Expanding your site network can help you reach distant customers, similar to reducing transportation costs. A more comprehensive network ensures faster delivery, increasing the likelihood of purchases. For example, if a shoe store has only one location, shipping may take weeks, prompting customers to shop elsewhere. Expanding your footprint will grow your customer base and boost revenue.

Quicker Local Delivery Times

Multiple warehouses enable local customers to pick up purchases or receive same-day delivery, especially with options like curbside pickup. It allows shoppers to buy and receive goods on the same day. A single warehouse limits immediate pickup to one location, but distributed warehousing expands access to more customers.

Reliability of DApps on Blockchain Technology

Blockchain technology securely and credibly records transactions in decentralized eCommerce applications. Every block contains an exceptional cryptographic hash that prevents data tampering without network agreement. Crypto wallet app development strengthens payment systems.

Role of Smart Contracts in DApps

Smart contracts simplify executing contractual terms. Once the terms are met, these self-executing contracts enforce agreements. When implemented on the blockchain, DApps become unchangeable, guaranteeing security, dependability, and openness.

Benefits of Smart Contracts in DApps

Smart contracts offer several benefits:

• Transparency: Visible to all network participants, enhancing accountability and removing intermediaries.
• Security: Based on cryptography, they are secure and cannot be modified once deployed.
• Efficiency: Automating contract execution reduces manual intervention, saving time and costs.

Why Develop a Decentralized E-Commerce Platform?

Top businesses are using blockchain for various benefits. Here’s why it’s good for your platform:

• Secured Transactions

Blockchain makes transactions secure. It protects sensitive data with encryption, preventing cyberattacks and building trust.

• Easy Process Automation

Smart contracts automate agreements. This removes intermediaries and ensures smooth operations, like automatic payments.

• Efficient Supply Chain

Blockchain tracks products from start to finish. It ensures product authenticity and prevents fraud, boosting customer trust.

• Real-Time Tracking

Customers can track orders in real time. This improves transparency and reduces delivery anxiety.

• Seamless Purchase Experience

Blockchain speeds up transactions and removes payment delays. This creates a smoother shopping experience and reduces cart abandonment.

• Customer Privacy

Blockchain encrypts and securely stores customer data. Users control their information, building trust with privacy-conscious buyers.

• Scheduled Delivery

Blockchain tracks delivery schedules. Any delays are recorded, keeping customers informed and ensuring reliability.

• Reasonable Value

Blockchain reduces costs by cutting out intermediaries. This allows businesses to offer better prices and attract budget-conscious shoppers.

• Flawless Logistics and Transportation Management

Blockchain tracks the entire delivery process. It improves efficiency, reduces errors, and boosts customer trust.

Bringing Decentralized eCommerce Platform to Live

Decentralized marketplaces offer peer-to-peer transactions, open-source code, and zero-commission fees. Here’s how to build a decentralized eCommerce platform:

• Gather Business Requirements

Define your platform’s features and business needs. Focus on using open-source code for peer-to-peer transactions with minimal fees. Choose the right blockchain technology for secure, transparent payments. Research thoroughly to select the best tech stack for your platform.

• Design Your Market Ecosystem

Set up rules for your marketplace. Whether it’s an NFT platform or traditional e-commerce, ensure registration processes are clear and the environment is user-friendly. A simple, open platform attracts global users and encourages retention.

• Plan System Architecture

For security, decide on your platform’s technical structure, including market and transaction servers. Consult experienced blockchain developers for advice on building a scalable and robust architecture.

• Design User Interface

Create an intuitive, responsive user interface. Consider designing a minimal viable product (MVP) and gathering feedback to refine the user experience.

• Create API Integration Specs

Integrate APIs for enhanced features. Focus on data formats, response codes, and automatic tasks to streamline integration with cloud services, speed up development, and lower costs.

• Test the Back-End Process

Test the back-end code to ensure everything works smoothly. Address bugs through manual or automated testing. A dedicated testing team is essential for platform reliability and security.

• Test Front-End Functionality

Test the user experience, from app download to secure payment. Ensure the process is smooth and there are no registration, cart management, or payment issues.

• Deploy Your Platform

Before going live, ensure your platform has a stable internet connection and can verify ERC721 token ownership for NFT marketplaces. This final step makes your platform available to users and ensures it operates smoothly.

Centralized vs Decentralized eCommerce Applications

Feature	Decentralized eCommerce Applications	Centralized eCommerce  Applications
Control	Distributed across a peer-to-peer network.	A single entity manages it
Data Storage	Stores data on a blockchain or distributed network.	Stores data on a central server.
User Experience	Can be complex	Stores data on a blockchain or distributed network.
Performance	Sometimes, experience slower transaction speeds and higher latency.	Quick and more responsive
Security	Enhanced security through decentralization.	Vulnerable to single points of failure.
Transparency	High transparency	Limited transparency.
Censorship Resistance	Resistant to censorship as there is no central authority.	Subject to censorship by the monitoring entity.
Governance	Includes community governance and consensus mechanisms.	A centralized authority makes decisions
Operational Costs	Incur higher costs for data storage and transaction fees.	Lower operational costs.
Regulatory Compliance	Faces legal uncertainties due to the lack of centralized control.	Easier to enforce regulations and compliance.
Use Cases	DeFi, NFTs, DAOs, gaming, and identity management.	Social media, banking, e-commerce.

Exemplifying Decentralized eCommerce Apps Vs. Centralized eCommerce Apps with Prominent Examples

Decentralized Online Store Applications

• OpenBazaar

Stimulates peer-to-peer transactions to ensure privacy and security.

• Origin Protocol

Encourage users to sell and buy independently. Build on-demand eCommerce apps with top-notch features.

• Opensea

Offers digital assets such as collectables, art, and virtual goods.

• Bitify

Provides an escrow service to protect transactions and supports various digital payment options.

• Particl

Users can use Bitcoin payments to buy and sell goods and services in this privacy-focused decentralised marketplace.

Centralized Online Store Applications

• Amazon

Process payments, control inventory, and handle shipping.

• eBay

Manages listings, auctions, payments, and customer support.

• Walmart

Handle everything from inventory to logistics.

• Shopify

Manages payments, orders, and customer data

• Etsy

Manages product listings, payment processing, and customer interactions

Summing Up: Centralized Vs. Decentralized eCommerce Applications

• Centralized Inventory

A centralized inventory system, often a large warehouse, manages stocks in one location. A single team handles inventory and shipping. Many e-commerce businesses, like Amazon, use this system. 

Benefits of Centralized Inventory:

• It is easier to maintain a consistent company culture.
• Lower operating costs (e.g., rent and utilities).
• Increased profits due to reduced expenses.
• Decentralized Inventory

Decentralized inventory spreads stock across multiple locations. Large retailers like Amazon use this multi-channel method, which has several advantages. Storing items closer to customers reduces shipping time and risk. 

Benefits of Decentralized Inventory:

• Greater flexibility in distribution compared to centralized systems.
• Lower transportation costs.
• Faster shipping times.

The Verdict: Are Decentralized eCommerce Platforms Breaking Free from Centralized eCommerce Platforms?

Decentralized marketplaces exhibit a paradigm shift in eCommerce. They are game-changers that break free from centralization. They follow the concept of dismantling the traditional hierarchy of e-commerce platforms.

Buyers and sellers in this decentralized ecosystem alike get their control. Sellers enjoy diminished transaction fees and a level playing field, determining the success of the product’s quality. Buyers have greater control over their data, which is not stored in a vulnerable centralized database.

Looking to Scale your eCommerce Business Decentralized applications?

Get in touch with RichestSoft’s blockchain app developers and maximize the functionality power of your online store today! Let’s Connect!