In a world of online transactions, digitalising your assets can play a big part in securing against fraud

Traditional currency has already been adapted to the digital space, i.e., it has already been digitalised. You can collect currency in your WeChat account and see your  balance in a mobile app. You can trade this money, spend this money and send this money to others freely, with there being infrastructure to support all of this.

But things get a little more difficult when it comes to digital goods, assets, and services. When you’re selling something digitally (e.g you are selling digitally held deeds for land or property, or are selling a handbag to someone through an e-commerce channel), there is no comprehensive infrastructure or a system that works for all digital-based trade.

There is a huge amount of trust involved with this; you must trust that the seller will not renege on their promise to deliver the goods or services that you have paid for and that they will not just take off with your money. You must also trust that you’re paying for the genuine article and that the bulk order of boots you’ve just paid for are the boots you want, verified by the original designer or manufacturer of the footwear.

Also read: 4 ways to secure your digital assets from malicious hacks and attacks

The global e-commerce market is already worth $22 trillion, according to a report by the United Nations Conference on Trade and Development. China alone is worth a massive $1.132 trillion of this, overtaking the e-commerce figures of the United States and the United Kingdom.

As this figure grows and more and more customers and service providers aim to make digital transactions, handing over access to assets digitally, so too will the questions of trust, verification, and security.

Establishing a digital identity

Under the current, centralised system of trading, trading with another party and verifying both of your identities can be a substantial undertaking. Not only must you both be registered with a verified party (e.g a trade body or another authorised department) but gaining this information from the appropriate party can take time. When you’re just trying to make a sale, you don’t want to spend time scanning your passport just to prove that you are who you say you are. In this age of digital, that is unwieldy.

A digital identity would make a lot more sense, however, and it’s something that asset digitalisation and identity group Metaverse is aiming to establish. Under Metaverse’s roadmap, users would be able to permanently establish and build their own digital identity, registering freely on an open-source, public blockchain (Metaverse is built on an independent public blockchain) where everyone is who they say they are and you can look it up on the blockchain if you don’t believe them.

On the seller side, service providers have their own digital identities too and act as “intermediaries in the blockchain” to provide “rapid and transparent supervision.” Providers will be able to establish a smart contract along with their digital asset just by filling out a form. When the asset trades hands, so too will the verification, ensuring that nobody gets scammed and buyers can be confident that the asset or service they’re paying for is the real deal.

Ecommerce fraud reaches an all-time high

E-commerce fraud is growing at an alarming rate according to a recently published report. The October 2017 Global Fraud Index report which saw PYMNTS and Signifyd track and report fraud at over 5,000 e-commerce merchants across North America, Asia, and Europe found that e-commerce fraud is now worth $57.8 billion overall. The report also found that there was 5.5% increase in total fraud between Q2 2016 and Q2 2017.

eMarketer also estimates that the e-commerce industry grew by 23.2% in 2017 alone. As the industry grows, so too will the opportunity for fraud and for shoppers to be ripped off by sellers. This is especially the case given that many online purchases come through social media and mobile devices (75% of Chinese e-commerce is expected to have come through mobile devices in 2017) where casual users may be less cautious about how they are spending their money.

Also read: Can blockchains significantly improve e-commerce security?

How will these shoppers be able to shop confidently, having huge concerns that they may be a victim of fraud? And that the second that they transfer funds, the seller will abscond, taking their hard-earned cash with them? Even if one seller is legitimate, of course there’s no saying that every other seller you’re shopping from is legitimate too.

Metaverse took eight months to build and, according to its roadmap, it plans to expand its plans significantly during 2018. The first phase of the digital identity and digital asset registration is being rolled out in early 2018 with blockchain as a service developments (including integrating cloud service and architecture) to expand throughout the year in the hopes of making a secure future for the world of online trading and selling.

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