The characteristics of the airline industry and also the broader travel industry align very well with the capabilities of the blockchain.
Data sharing among multiple actors and touchpoints powers the travel journey. From booking to arrival, players can include airlines, online travel platforms, card providers, airports, immigration, government, hotels, car rental agencies and more.
Each actor requires, collects, stores and often shares traveler and operational information. In fact, a web of complex and seemingly endless data reconciliation is happening behind the scenes of every touchpoint of every traveler’s trip.
With so many systems in play, airlines alone house data in many isolated systems from passenger service to crew management, data exchange is not always smooth. And in the airlines industry, not only are operational integrity and revenue generation at stake when something goes wrong, but so is safety and security.
It’s easy to see why using blockchain technology for enhanced reconciliation and data sharing is a compelling value proposition for this industry. The most creative and disruptive possibilities go beyond pure financial transactions. Consider the following:
- Ticketing. An e-ticket is, in essence, a database entry—information that would have been printed on a paper ticket dematerialized, stored in and called up from a massive database. The blockchain can tokenize this asset and further dematerialize it. Through the use of smart contracts associated with the asset, airlines can add business logic and terms and conditions around how the ticket is sold and used. This opens the door for tickets to be sold by different partners, and in real time, from anywhere in the world.
- Loyalty. Loyalty is big business in air travel. In traditional loyalty points schemes, travelers often have to wait until points settle and accrue to use them, and they are limited on where they can spend them. By tokenizing loyalty points on the blockchain, travelers can get instant value by redeeming them on the spot. They can also use them more broadly through a specific user community of partners. Think of it as a marketplace or exchange model. With points accepted as “currency” among more providers, travelers get an easier and faster-to-use program that is more relevant to their personal preferences.
- Security and identity. Protecting data privacy is a clear issue when it comes to passenger records, flight manifests and crew information. Not to mention the security implications that are in play today’s world if this data is not properly protected. Blockchain technology with a security wrapper creates a very different and less risky way of managing and sharing this information through the use of authorized access requirements.
- Maintenance. Blockchain technology can transform maintenance logs, which at best are in cumbersome databases and, at worst, are in paper binders. The blockchain can help the industry ensure that parts procured are legitimate and can offer a “virtual copy” immutable record of the provenance of every part on the plane, every time it has been handled and by whom, from the beginning of the aircraft’s existence. This visibility is profound, and can take the practice of maintenance, safety and aircraft security to new levels.
Travel & Tourism:
In terms of the advantages blockchain technology can offer within the travel industry, stability and security rank very highly. The nature of the blockchain means that information can never go ‘offline’ or be lost through accidental deletion or a malicious cyber attack, ensuring transactions are always traceable.
The travel industry relies upon different companies passing information between one another. For example, travel agents need to pass customer details on to flight companies and hotels, while the personal belongings of travellers are often passed between companies and tracked too. Blockchain can make accessing and storing important information easier and more reliable, because responsibility for storing it is shared across the whole network.
Of course, financial transactions are a vital part of the travel industry too, and blockchain technology has the capacity to not only simplify, but also secure payments. This is especially true when dealing with overseas payments. As a consequence of this, blockchain has the potential to improve the level of trust among all parties.
Below are four of the most exciting uses for blockchain technology within the hospitality and travel industry.
- Tracking Luggage
Blockchain technology can be extremely valuable for tracking the movements of luggage, especially when dealing with international travel. In many cases, a customer’s luggage changes hands multiple times over the course of their journey. Using a real-time ledger database makes sharing tracking data between companies a lot easier.
- Identification Services
Identification services are enormously important for the travel industry, and blockchain could potentially become the industry standard for storing this information. Used in this way, the technology has the capacity to drastically reduce check-in times, or queues in airports, as a simple finger print or retina scan can replace showing documents.
- Secure, Traceable Payments
Perhaps the most important use of blockchain technology within the hotel and travel industry is related to payments. Here, its applications can range from serving as a global ledger, making bank payments more simple and secure, through to allowing travel companies to accept payments in real-time by tokenizing each transaction.
- Customer Loyalty Schemes
Finally, many travel companies run customer loyalty schemes, in order to encourage return custom. Blockchain can also assist with these programmes, simplifying the process, allowing customers to more easily access information about their loyalty points, and allowing tokens to be distributed. It can also help to combat fraud in this area.
Payment Aggregators & Processors:
The card payments industry has a lot of issues right now. It’s huge industry dominated by a handful of companies that see billions of transactions a month. One of the biggest payment card companies, Visa, handles around 150 million transactions every day.
But although things seem to be working in order, there is a lot that can be improved for the average merchant.
For example, merchants currently face high transaction fees. A card transaction requires the buyer to effectively authorize the seller to ‘pull’ a payment from their account, passing through several financial intermediaries in the process. A typical card transaction, besides the merchant and the cardholder, involves at least four parties (commonly referred to as merchant services providers). These include the acquirer (the financial institution that enables payments to the merchant), the payment gateway, the interchange (e.g., Visa, MasterCard or Amex), and the issuer (the card holder’s bank).
“With the card payment system currently in place, all fees go to these intermediaries. If a shopper is to buy a good worth $100 using a debit card as opposed to cash, these intermediaries will take around 3.5 percent, which means the merchant receives as little as $96.50.”
The problem is not just with the card payments, either. Many companies who now offer “mobile payments” as an alternative to card payments still charge almost the same in processing fees. Again, this can prove costly over the year — especially in a world that’s becoming less dependent on cash.
Despite the relative efficiency of these existing systems, users are still vulnerable to manipulations and risks. Also, these services are not offered for free by the processors, as maintenance fees and other service charges do exist. These fees add up over the course of the financial year.
This brings us on to the next point: chargeback fees. Chargeback fees occur when a customer disputes a transaction with a merchant. If the customer is right in his dispute, the card company takes the money from the merchant’s bank, rightly puts in back in the customer’s account and a fee is incurred. Problems include unauthorized transactions, goods never delivered or delivered late. Card companies can charge over $20 per dispute, which adds up over time, costing merchants potentially thousands over the year.
- What solutions can blockchain bring to the table?
Firstly, blockchain, as you are probably aware, is a decentralized technology. Therefore, if we were to introduce blockchain to the table of the card payments industry, many middlemen could be cut out of the picture.
And with these middlemen out of the picture, transactions fees would be, too. This would effectively slice the transaction overhead and even facilitate what is known as “micro-transactions” — small transactions conducted with near-zero charges and instant verification.
Likewise with chargeback fees. Payments in a blockchain system allow the customer to decide on how much money is given, and merchants are unable to take more. There is no central authority. Rather, everything is held in a ledger. The middleman who wants to take a cut is eliminated and this benefits not just the customer but merchants as well, and makes chargeback a thing of the past.
International payments could also be made easier, as many banks charge fees for using their services abroad. A blockchain payment system would allow shoppers to buy things with ease, whenever or wherever they are in the world. And smaller merchants, who previously wouldn’t be keen on international sales due to cross-border fees, would be given the chance to flourish.
Accounting & Audit Firms:
Everything is about automation in business. If there’s a task that’s still being performed manually, it’s costing companies time. To achieve its daily targets the industry still relies on mutual control mechanisms, checks and balances. This affects every day’s operations. Among other things there are systematic duplication of efforts, extensive documentations and periodical controls. Most of them are manual, labour intensive tasks and they are far from being automated.
Modern financial accounting is based on a double entry system. Double entry bookkeeping solved the problem of managers knowing whether they could trust their own books. However, to gain the trust of outsiders, independent public auditors have to verify the company’s financial information. Each audit is a costly exercise, binding the company’s accountants for long time periods.
Blockchain has the potential to further enhance the accounting industry by reducing the costs of maintaining and reconciling ledgers, and providing absolute certainty over the ownership and history of assets.
While using blockchain, instead of keeping separate records based on transaction receipts, companies can write their transactions directly into a joint register, creating an interlocking system of enduring accounting records. As all entries are distributed and cryptographically sealed, chances of destroying or manipulating them to conceal activity is practically impossible. This is exactly similar as the transaction being verified by a notary — only in an electronic way. This will allow auditors to verify a large number of data in a short period of time. The cost and time necessary to conduct an audit would decline considerably.
The blockchain technology promises a lot of advantages for the accounting firms whether big or small. Here are few of the benefits:
- Reducing Errors: One of the biggest advantage of blockchain in accounting is its ability to make almost negligible errors. Once data is in the chain, smart contracts will make many accounting functions automatic, reducing human error.
- Increasing Efficiency: Blockchain is fast and powerful database. Using blockchain, getting data into and out of the system can be done more efficiently than interacting with legacy accounting software applications.
- Reduces Cost: Blockchain will lead to increased efficiency and reduction in errors which will eventually lead towards cost reduction. Following initial adoption cost, accounting firms can expect to see rapid cost savings over conventional accounting systems.
- Reduces Fraud: The immutable nature of blockchain makes it extremely difficult to perpetrate and difficult to manipulate. In order to modify a record, the same change would have to be made on all copies of the distributed ledger at the same time, which is highly infeasible.
- Reduces Time: One key feature of blockchain that accountants should be excited about is its ability to reduce audit time. With the use of smart contracts, many auditing functions can be automated which will reduce the time, an auditor needs to look after the records. The inherent traceability built into blockchain makes auditing fast and easy.
Email & Instant Messaging:
Email is the original open source messaging platform. Invented as we know it in ’73, it hasn’t changed much since (or died).
Today 3 billion people use it. It is the cockroach of the internet. Compare it to these communication platforms that didn’t exist 10 years ago:
- Facebook Messenger
Recently email has become centralised to a just a handful of inbox providers, owned by the biggest tech companies in the work.
The top 3 inbox providers, Apple, Alphabet and Microsoft, now control 77% of the world’s email inbox market share.
Gmail has 23% of the world’s email inbox market share. Alphabet, a company that mines and sells data for targeted advertising, owns Gmail.
So while the email communcation protocol (SMTP) is open source, the companies built on top of it are very very proprietary, and have an outsized influence in it’s direction.
Blockchain offers new email platforms’ the ability to grow (and self-sustain) without a third party in the middle extracting all the value, or harvesting personal data.
We have been building the only competitor to Microsoft Exchange and GSuite for the past 2 years that is fully run on Blockchain technology with integrated real-time chat and video conferencing. The company name is called ReliMail and will be the biggest disruption in the Email and Instant Messaging space in 2019.
Over the last few years, Bitcoin became more widely recognized by merchants around the world and with it, other digital currencies have also become a popular alternative to the more traditional payment methods, as the Bitcoin network struggles with capacity issues and rising fees.
The increased popularity has not just been down to the cryptocurrencies themselves, but the technology that formed cryptocurrencies, the blockchain technology, with e-commerce on blockchain providing the buyer, the seller and even the marketplace with a record of the transaction on the blockchain that is irrefutable, removing the possibility of fraud and dispute that can lead to lengthy resolution at an expense to both the buyer and the seller.
Each and every step involved in the purchasing process is recorded on the blockchain, from the buyer placing the order and making payment, to the seller receiving payment and shipping the product purchased, and ultimately the buyer’s receipt of product closing out the proof-of-work cycle.
The more traditional e-commerce platforms also add to the buyer’s costs, eating into the cost savings made from buying online, with a percentage of sales and a one-off sales fee added to the total cost of purchase. The built-in costs charged by e-commerce platforms are partially offset by retailers discounting products for sale, hitting retailers with narrower margins, with only the e-commerce platform providers getting the cream.
One key industry that will go through tremendous transformation thanks to the adoption of blockchain is e-commerce. According to eMarketer estimates, retail e-commerce sales amounted to $2.304 trillion in 2017, up by nearly 24.8% over the previous year. What’s more, mobile commerce made up 58.9% of digital sales. This indicates that the burgeoning e-commerce space is ripe for a disruption by way of blockchain adoption.
We are currently building a E-Commerce platform that is 100% run on blockchain technology using Artificial Intelligence. This will be a tremendous disruptor in the E-Commerce space and will be a direct competitor to Shopify.
Financial Institutions like Banks & Loan Aggregators:
Given nowadays complex macroeconomic environment, as well as regulatory and investors’ pressures, banks are forced to seek new ways of lowering costs and increasing profitability.
In such setting, technological innovations such as blockchain could become a lifeboat for banks. blockchain has the potential to replace the multitude of consecutive models of data reconciliation, by providing a distributed database as a single source of truth. Today data reconciliation lies at heart of business models in enterprises not only within but also beyond financial services industry.
Each company independently maintains actuality of data in its systems, so in a business transaction numerous business processes flow slowly and inefficiently due to the need of transacting parties to reach an agreement on the congruity of records. Offering a more efficient and holistic approach, where automatic reconciliation of digital events is one of the core characteristics of the technology, blockchain represents a disruptive and innovative solution to reconciliation.
Finally, blockchain would not only allow banks to significantly reduce the present levels of complexity rested in processes through abandoning redundant elements of current infrastructure, but also revolutionize the roles of banks as well as roles of end users within the financial system.
With global banking currently a $134T industry, blockchain technology could disintermediate key services that banks provide, including:
- Payments: By establishing a distributed ledger for payments that run in Real-Time, blockchain technology could facilitate faster payments at lower fees than banks.
- Clearance and Settlement Systems: Distributed ledgers can reduce operational costs and bring us closer to real-time transactions between financial institutions.
- Fundraising: Initial Coin Offerings (ICOs) are experimenting with a new model of financing that unbundles access to capital from traditional capital-raising services and firms.
- Securities: By tokenizing traditional securities such as stocks, bonds, and alternative assets — and placing them on a ledger system — blockchain technology could create more efficient, interoperable capital markets.
- Loans and Credit: By removing the need for gatekeepers in the loan and credit industry, blockchain technology can make it more secure to borrow money and provide lower interest rates.
- Trade Finance: By replacing the cumbersome, paper-heavy bills of lading process in the trade finance industry, blockchain technology can create more transparency, security, and trust among trade parties globally.
- Insurance Industry:
The core features of blockchain makes the technology very attractive to insurers. Blockchain provides an immutable and permanent record of transactions, transparently available to all authorised participants, with no intermediaries or brokers of information.
This could have a very disruptive effect on the way that insurers share data, process claims and prevent fraud.
Five areas in which blockchain will reshape insurance:
- Smart contracts: with the details of an insurance contract established on the blockchain, all parties (such as underwriters, reinsurers, consumers and industry ombuds) would have access to the same datasets. As claims are submitted, the smart contract checks certain conditions have been met and only pays out the valid claims – without the hassle of going back and forth searching old document sets, emails and human interventions.
- Know your customer: currently, every company (including insurers) has a slightly different way of confirming the identity of new customers. But with the blockchain, it becomes possible for customers to create something of a ‘digital passport’, which can be accessed by different service providers. Insurers can cut out huge amounts of time and investment in building their own compliance and onboarding policies, and instead rely on the trusted identity information on the blockchain.
- Payments: for global insurers (or, insurers with global ambitions), blockchain allows firms to create a global financial ledger of all operations – even if they’re spread across different countries – facilitated by crypto payments between their various offices for all internal transfers. This reduces the need for expensive and lengthy cross-border transactions between different areas of an insurers international business divisions.
- IoT innovations: the latest-generation of home sensors, vehicle trackers, asset tracking devices and personal health and fitness tools represent a golden opportunity for insurers. Suddenly, they’re able to provide personalised pricing based on a very clear understanding of one’s risk profile. Yet, for IoT-based insurance to truly take off, the data needs to be stored in a tamper-proof environment like blockchain. Though a consumer might only take out a new insurance policy this month, the insurer would benefit from them being able to share my personal health details, or driving behaviour, over the past few years.
- Minimising fraud: insured assets can be added ‘to the blockchain’ using unique identifiers such as serial numbers, so that there can be no mistaking which asset is which. This helps to reduce the amount of insurance fraud, which is currently the scourge of the industry. From a risk profiling perspective, insurers can gain greater context – such as a store that needs to be insured against fire or theft. With trustworthy data added to the blockchain, the insurer could get accurate records of crime statistics for the shopping mall in general.
Healthcare is a diverse industry that lacks any sort of central record keeping system. In some cases, doctors keep individual patient records that can be hard to access, even for the patient!
Having easy access to medical records can make a big difference in emergency situations. Unfortunately for patients, hospitals and other healthcare providers face an uphill battle when it comes to accessing medical records that should be the property of the patient.
Electronic Medical Records (EMRs) are a step in the right direction for patients, but to date, there is still no central clearinghouse for sharing EMRs quickly. According to a recent Medicare study, the average American consults seven different medical providers every year, and they aren’t able to easily share records within their healthcare team.
Blockchain healthcare records could help patients to get the best care, but they could also create a new economy that would empower medical researchers as well.
In addition to letting patients have full control over the medical records, blockchain could supercharge the medical research sector. Gaining access to large amounts of medical records to perform meta-analysis is a pain. There are loads of laws and regulations that govern access to medical records, and contacting patients on an individual basis is expensive and time-consuming.
A blockchain healthcare platform would not only give patients real-time access to their medical records, it would also streamline the process of assembling large data sets for medical research, or monitoring the outbreak of dangerous illnesses.
Ways Blockchain will change Healthcare:
- Disease Management: There are some pretty nasty diseases out there. Influenza has the ability to kill millions of people, and in recent years the death tolls have been going up. The lack of a central register for health data is a big enough problem in developed nations, but in poor areas like Africa, it is a severe hindrance for global health.
An outbreak of Ebola has the ability to spread rapidly. With the advent of advanced telecommunications it is possible to share information quickly, but without a platform to monitor symptoms, catching an outbreak is more difficult that it needs to be. Now Artificial Intelligence (AI) can constantly monitor medical reports, but it needs to have access to the information to make any impact whatsoever.
A blockchain healthcare records platform could be the answer to this dilemma. If medical records are recorded on a central database, it would be simple for AI to spot an outbreak as it is happening. This would give the authorities the ability to better respond to any problem, and limit the spread of a potentially fatal illness.
- Medicine Management: In most developed economies, counterfeit drugs aren’t a major problem. In emerging economies, on the other hand, many common medications are routinely switched out for bogus products. Blockchain is a great way to keep track of medications, from the time they are made until they reach their final consumer.
Property & Deeds Management:
Real estate investment has three major drawbacks: the presence of intermediaries, the lack of affordable funding options, and fraud.
Agents take up to six percent of the total payment made on a real estate asset. This means that intermediary fees would account for over $23,000 for a house that costs $400,000. Unfortunately, up to 80 percent of home buyers still use an intermediary and continue to pay these fees according to a report by the National Association of Realtors.
Real estate is also expensive and the prices continue to climb, limiting access for a greater part of the population. According to research by CNBC, an investment of $1 million will most likely buy about 270 square feet of prime property in New York. However, only about 10 percent of US residents can afford such a price tag.
Finally, the commercial real estate industry is rife with fraud, not just in the United States, but globally as well. According to a statement by the FBI, the internet crime complaint center saw a 480 percent increase in real estate fraud complaints filed in 2016. These crimes, including title fraud and online sale scams are aided by the rarity of trusted platforms where real estate documents can be verified.
How will Blockchain fix the Property Industry?
A blockchain is an immutable ledger in which transaction data can be recorded. Its benefits include transparency, traceability, accessibility, and enhanced security. When implemented in the real estate industry, these properties can solve its major issues.
- A Blockchain real estate platform will eliminate the need for intermediaries like lawyers and agents by providing a means of property verification and payment to buyers. Paying for property using cryptocurrencies can also help buyers bypass bank fees. It cuts the fees associated with escrow by offering smart contracts that can be customized according to a users’ needs.
- The tokenized nature of cryptocurrencies makes crowd ownership of real estate possible. Those who cannot afford to purchase the whole property can simply buy a part of it, like buying shares in a company. Such investors would receive transferrable tokens that represent their shares and can be verified easily on a blockchain. This makes real estate investment accessible to more people.
- Blockchain can also prevent fraud in the industry by providing a way to easily authenticate property documents. As these properties are transferred, their records are added to the blockchain and a comprehensive history is formed. In the event of a sale, buyers can easily check if property is fraudulent.
Asset Management & Stock Trading:
Blockchain offers huge potential for tracing securities lending, repo and margin financing and monitoring systemic risk.
Blockchain is the answer to interoperability, trust and transparency issues in fragmented market systems.
Stock market participants such as traders, brokers, regulators and stock exchange are required to go through a cumbersome process (which takes 3+ days to complete transactions, mainly due to the role of intermediaries, operational trade clearance and regulatory processes).
Blockchain can make stock exchanges much more optimal through automation and ledgered control.
Blockchain can have viable use in clearing and settlement, while securely automating the post-trade process, easing paperwork of trade and legal ownership transfer of the security.
Blockchain can eliminate the need of third party regulator to a large extent, since the rules and regulations would be in-built within smart contracts and enforced with each trade in order to register transactions with the blockchain network acting as a regulator for all transactions.
E-Learning & Education:
While online education has afforded people the ability to learn new skills from the comfort of their own homes, there are still some issues to overcome. User retention and completion rates represent the biggest problem for online courses.
Completion rates for online courses are staggeringly low. While many persons sign up for these courses initially, the majority fail to complete them for one reason or another. If more people don’t complete these courses, then the benefits of online education can never be fully realized.
Another issue plaguing the online education space is the lack of intermediate level courses. The majority of online courses are geared towards beginners.
Platforms like Udemy and Coursera provide short courses which allow individuals to gain a good foundation in their selected topic. This entry-level education is crucial for those just starting out, but after passing the beginner stage, it can be difficult to find sufficient material online to further one’s education.
The blockchain offers solutions to these two problems through tokens. Typically, when students are enrolled in a course, the only reward they receive is a grade.
While this can provide some motivation, in the case of self-paced online learning, it isn’t enough. Many people lack the discipline to continue to learn things on their own, outside of a standard classroom. One way around this is to reward students for progress in a course with blockchain tokens. If students are given tokens, which they can exchange for other cryptocurrencies and eventually receive cash for, then they will have added motivation to complete online courses.
Another aspect where online education can benefit from blockchain tokens is to fix the lack of quality educators in certain fields, especially when it comes to self-paced learning. Blockchain tokens can also provide incentives to these educators, by rewarding them for creating high-quality content. This concept has already been proven outside of the education space on YouTube: YouTubers create entertaining videos their fans love; the more fans watch their videos, the more YouTubers are paid in royalties.
The capabilities of the blockchain in the education space are not limited to payments and incentives, however. The security factor can be pretty useful for storing credentials. Some colleges and universities are entertaining the idea of issuing degrees through the blockchain.
Blockchain technology can also be pretty useful with regards to online certifications. Since any block added to the chain must be approved by other participants, the record cannot be falsified. This prevents people from creating fake certifications to say that they passed or excelled at a particular course. The records are also quite easily checked.
The blockchain provides an undeniable trust factor when it comes to digital degrees and certificates which wasn’t available before.
IoT Applications & AI:
The intersection of blockchain and the Internet of Things (IoT) has emerged as one of the most promising use cases for blockchain.
The foundation of blockchain is trust — an immutable source of the truth. Today, IoT data cannot be fully trusted outside of a data owner’s domain, due to inability to verify that data was not manipulated before being sent, sold, or used by other parties. For example, autonomous car startups and ride sharing giants, such as Uber and Lyft, have no solution to share trusted mapping or ride data; instead, they gather and store similar datasets independently. How can we break down these monolithic data siloes and enable trust across parties? Blockchain & IoT.
Trusted execution environments (TEE) in today’s IoT devices can attest that data came from a specific device, and once this data is stored on the blockchain it is immutable and traceable. The combination of secure IoT devices and blockchain introduces a uniquely pure source of IoT data, which is known to come from a specific source and be non-manipulated. New business models centered around this trusted IoT data will soon emerge — data can be bought, sold, shared, and used across otherwise untrusted parties.