• Products
    Digital Trust & Safety Suite

    Expand with confidence, and fight many types of fraud and abuse

    Payment Protection

    Reduce risk and grow revenue

    Content Integrity

    Protect users from spam and scams

    Account Defense

    Stop account takeover attacks

    Latest Product Releases & Enhancements
    Sift Connect
    PSD2 Solution
  • Why Sift
    The Sift Way

    Technology, Community, Partnership

    Commerce Platform Partners

    Low-code integrations for leading commerce platforms

  • Customers
    See case studies by industry

    Sift works for companies across e-commerce, travel, on-demand, and more.

    Featured Customers

    Harry’s

    85% reduction in chargebacks

    Poshmark

    70% less spam content

    Turo

    100% of ATO blocked

  • Resources
    Blog

    Digital Trust & Safety news

    Demos

    Walk-throughs of how Sift works

    Ebooks

    Guides, research, and more

    Infographics

    Data brought to life by design

    One Pagers

    Product and use case info

    Podcasts

    Stories from the fraud front lines

    Videos

    Testimonials and brand stories

    Virtual Events

    Virtual expo and online events

    Webinars

    Insights from industry experts

  • About
    Search Careers

    Make the internet a safer place — Grow your career.

    Our Company

    Learn how Sift helps companies grow securely

    Contact Us

    Want to get in touch? We'd love to hear from you

    Partner with Us

    Join the leader in Digital Trust & Safety

  • Request a demo
  • Sign in
Products
  • Digital Trust & Safety Suite
  • Payment Protection
  • Content Integrity
  • Account Defense
  • Latest Releases
  • Sift Connect
  • PSD2 Solution
Why Sift
  • Salesforce
  • Magento
  • Shopify
Customers
Resources
  • Blog
  • Demos
  • Ebooks
  • Infographics
  • One Pagers
  • Podcasts
  • Videos
  • Virtual Events
  • Webinars
About
  • Search Careers
  • Our Company
  • Contact Us
  • Engineering Blog
Request a Demo Sign In
  • Blog Home
  • Digital Trust & Safety
< prev / next >
Share this article on LinkedIn
Tweet this article
Share this article on Facebook
SOCIALICON
Share this article via email

5 Ways Blockchain Will Make Payments More Secure

By Jenny Jedeikin  / 

28 Mar 2017

If you’re into technology, you probably already know about the blockchain. It’s the decentralized database technology behind bitcoin that’s predicted to become as “big as the internet,” disrupting the way we trade and track goods and services.

How does blockchain work? Essentially, it’s a decentralized database accessed by a peer-to-peer network of computers and people that all share a distributed ledger. In that sense, it’s a little similar to Wikipedia, but instead of storing and sharing information it stores and shares data about who owns what and who transacts with whom.

A barrier for fraudsters

By putting data onto a public ledger that can’t be deleted, blockchain eliminates the need to have a third party, like a bank, oversee transactions. As Martin Murphy, a Support Engineer at Sift Science, explains: “Unlike a centralized bank that holds all of the money in one place, blockchain’s inherently decentralized design makes it difficult for fraudsters to find a single point of failure. Because the shared ledger is spread over thousands of computers. It’s very hard to commit fraud because it would have to be perpetrated simultaneously on shared ledgers that are distributed in numerous locations.”

Early days, but lots of promise

Blockchain has potential applications far beyond finance. It could enable users to verify, process, and track ownership for items such as mortgages, medical records, or even online music. But it’s still in its infancy.  “It’s early days for this technology,” says Murphy, “like the internet in ’95, when people were still getting used to having email addresses.”

Although blockchain transactions are encrypted, Murphy says companies that employ blockchain today are just as susceptible to fraud and hacking as other companies. That’s because current adopters – such as cryptocurrency organizations – “still act as traditional banks, storing information the way banks do, and are capable of being hacked into. But,” he adds, “the blockchain technology itself has not been hacked.”

Here’s five ways blockchain will likely make transactions more secure in the future:

1. By decreasing uncertainty about who you’re interacting with during a transaction.

When consumers go to purchase a product on a site like eBay or Etsy, they can search for details about the seller such as their seller rating and site history. Likewise, a seller may be able to see a buyer’s rating. But this information is often piecemeal. Blockchain allows sellers and buyers to permanently upload verified personal documents, such as a government-issued driver’s license, a contractor’s license, or a credit score. This gives both buyers and sellers credible information to help them make decisions and transact together online.

2. By making transparent what is being bought and sold.

When we purchase a product, we may buy a name brand like Nike because we’ve purchased it before and appreciate the quality. However, consumers can’t always be sure that what they purchase isn’t a counterfeit product. Blockchain will remove that possibility by enabling retailers to post verifiable documentation for their supply chain – such as which factory and what materials were used to make a product. In this way, consumers can monitor and validate the supply chain themselves.

3. By providing built-in recourse for unfulfilled contracts.

Think of what happens when you try to purchase a home. Your escrow doesn’t close and funds aren’t released until certain conditions have been met on a mortgage contract. In the same way, blockchain technology can program conditions, such as a buyer receiving an undamaged product, before their funds are released to the seller. With such a condition in place, retailers won’t suffer from chargebacks, because purchases made with cryptocurrency can’t result in a “chargeback.”

4. By increasing the speed of a transaction.

When we purchase something with a credit card or Apple Pay, “on the backend, you have a payment system that is pretty antiquated,” says Murphy. “Systems like ACH and Swift are fairly slow and take several days to process.” Because the blockchain doesn’t use a third party, the transfer of money is immediate.

5. By making “value” native to the internet.

In the early days of the internet, playing video wasn’t a designed feature, “but the internet adapted over time to be able to do so,” explains Murphy. Similarly, by adopting blockchain technology, the internet will evolve to include “value” as an exchange unit. Users will no longer have to enter credit card numbers or log in to a particular website.

There are a number of  ways this can be achieved, says Murphy. For example, “a bitcoin startup called 21 has a vision of a machine payable web,” a web where internet users will be charged a micropayment when they view content instead of encountering a paywall. Or money may exchange hands using a system similar to how you receive an InMail on LinkedIn, says Murphy. “So somebody will pay you a micropayment to actually send you an spam email, or if you reply back, you may actually receive money.”

As the internet evolves so that value and trust are traded as currency, it will become a safer place to do business. Blockchain technology is just one piece of that story.

Related

fraudindustrytechnologytrends

Jenny Jedeikin

Jenny Jedeikin is a freelance writer in Northern California. Her writing has appeared in Rolling Stone Magazine, The San Francisco Chronicle and The Advocate, as well as in marketing blogs for LinkedIn, University of Phoenix, and Salesforce.

  • < prev
  • Blog Home
  • next >
Company
  • About Us
  • Careers
  • Contact Us
  • News & Press
  • Partner with us
  • Blog
Support
  • Help Center
  • Contact Support
  • System Status
  • Trust & Safety EDU
  • Fraud Management
Developers
  • Overview
  • APIs
  • Client Libraries
  • Integration Guides
  • Tutorials
  • Engineering Blog
Social

Don't miss a thing

Our newsletter delivers industry trends, insights, and more.

You're on the list.

You can unsubscribe at any time. Please see our Website Privacy Notice.

If you are using a screen reader and are having problems using this website, please email support@sift.com for assistance.

© 2021 Sift All Rights Reserved Privacy & Terms

Your information will be used to contact you about our service and subscribe you to our direct marketing communications. You can, of course, unsubscribe at any time. Please see our Website Privacy Notice.