Tag: Enterprise blockchain

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Crypto Daily Topic

How Blockchain Can Transform the Tourism Industry 

Since the introduction of online flight booking, the global tourism industry has grown exponentially – thanks to the convenience of making flight reservations from a mobile device. Despite the efficiency brought by such technologies, the travel industry is populated by a myriad of intermediary companies that make traveling quite a hassle. From flight companies, travel agents, tour operators, to destination management companies, all of which defeat the purpose of using travel solutions for convenience. Additionally, throughout the travel, customers’ data is exchanged numerous times, which ends up compromising their privacy, especially if the systems used aren’t secure enough. 

Since the introduction of online flight booking, the global tourism industry has grown exponentially – thanks to the convenience of making flight reservations from a mobile device. Despite the efficiency brought by such technologies, the travel industry is populated by a myriad of intermediary companies that make traveling quite a hassle. From flight companies, travel agents, tour operators, to destination management companies, all of which defeat the purpose of using travel solutions for convenience. Additionally, throughout the travel, customers’ data is exchanged numerous times, which ends up compromising their privacy, especially if the systems used aren’t secure enough. 

Since the introduction of online flight booking, the global tourism industry has grown exponentially – thanks to the convenience of making flight reservations from a mobile device. Despite the efficiency brought by such technologies, the travel industry is populated by a myriad of intermediary companies that make traveling quite a hassle. From flight companies, travel agents, tour operators, to destination management companies, all of which defeat the purpose of using travel solutions for convenience. Additionally, throughout the travel, customers’ data is exchanged numerous times, which ends up compromising their privacy, especially if the systems used aren’t secure enough. 

Just as Bitcoin was conceived as a method of bypassing financial intermediaries, its underlying technology – blockchain, can also be used in the tourism industry. The technology will enable customers to interact directly with service providers making traveling less of a hassle while also safeguarding their privacy. 

Potential use cases of blockchain in travel 

Blockchain technology is lauded for its high data security, immutability, and decentralization. These are the fundamental properties most industries seek to leverage. Here’s how the tourism industry can make use of this revolutionary technology: 

1. Decentralized booking marketplaces

Although intermediaries in the tourism industry aim to make traveling less hectic, their services make traveling expensive. For instance, online travel agencies (OTAs), despite helping customers book flights and accommodation, usually charge a service fee, which adds to the overall cost of traveling. 

With the employment of blockchain technology, a decentralized booking marketplace is created where intermediaries become obsolete. Travelers are connected directly to flight companies, hotels, and other service providers, making traveling more affordable. Moreover, without intermediaries, customers’ experience is enhanced as they can make seamless transactions with minimal delays. 

Smart contracts could serve as automated intermediaries that utilize data oracles to source a range of relevant services like traditional OTAs. Smart contracts will hold funds in escrow as remotely executable agreements and release them when and if services are properly offered. 

2. Secure payment systems

The traveling process is characterized by numerous payments right from flight booking to accommodation and everything in between. Unfortunately, customers’ privacy of their financial details isn’t guaranteed, which means they are at risk of identity theft or even losing their funds to hackers. Also, to make these payments, travelers must carry debit cards or fiat cash, which can be cumbersome, not to mention the risk of theft. 

If the tourism industry was to integrate blockchain technology into their payment model, all transactions would be done using cryptocurrencies. As such, travelers’ financial details will be secured, protecting their privacy while minimizing fraud. What’s even better is that paying using cryptocurrencies eliminates the need to carry cash or use third-party payment processors such as Visa and MasterCard. With the intermediaries out of the way, payment transactions become more affordable, especially cross-border payments. 

Since blockchain technology can create a seamless inventory tracking mechanism, it can also be used to track payments. This will ensure flights are booked to a maximum capacity only, preventing overbooking, which can ruin an airline’s publicity. 

3. Identity management

Identification services play a crucial role in the tourism industry as it helps promote security. Immigration officials are always keen when verifying travelers’ identities in compliance with national security guidelines. However, identity verifications tend to be time-consuming and repetitive, resulting in long queues at airports and hotel check-ins. 

Blockchain can transform the current identity verification process by creating an immutable database containing the necessary details of a traveler. This way, identity verification will be reduced to a simple fingerprint or iris scan instead of the traditional document verification. As a result, there will be fewer check-in times and shorter or no queues in airports, facilitating a time-efficient experience. 

Relevant authorities can also share the necessary data required for identity verification without compromising travelers’ privacy. This is enabled by blockchain’s zero-knowledge protocol that allows parties in a peer-to-peer network to verify specific data’s accuracy without revealing it to each other. 

Also, if all governments were to use blockchain in identity verification, passports would be rendered obsolete. This would, in turn, reduce verification time and unite all nations in providing digital passports for efficient traveling experience. 

4. Baggage management

It is estimated that airlines lose about two bags for every 1,000 passengers. While the odds may seem almost negligible, it’s disappointing to lose your luggage, especially if it contains essential business documents or other valuables. In most cases, baggage mishandling and loss is as a result of human error since multiple parties are involved in the handling process throughout one’s journey.

Moreover, each of the involved entities in the baggage handling process, from the airline, security personnel to ground staff, all have different baggage tracking infrastructures that operate in isolation. As such, when reconciling their databases, discrepancies may occur, resulting in loss of luggage. 

In collaboration with AI and sensor technologies, blockchain can be used to monitor and track travelers’ luggage. Also, tracking data is recorded on a distributed database that can be shared among entities responsible for handling baggage, eliminating the baggage loss menace facing the tourism industry. 

5. Customer reward system

Airlines, travel agencies, and even hotels offer customer reward systems to win new customers and incentivize loyal ones. However, there have been complaints that these programs are too restrictive and limited to a small set of rewards. 

Moving the reward system to a blockchain network means that rewards will be issued in the form of digital tokens. This enhances transparency in the way rewards are issued, which then improves customers’ trust. The tokens can be exchanged or rather redeemed for a variety of products from different providers, unlike traditional loyalty programs, where the rewards are restricted to specific rewards. Various entities within the travel industry can also collaborate in offering digital token as rewards. This way, the tokens can be exchanged easily between the entities, allowing customers to compare the relative value of schemes and rewards they offer. 

6. Transparent business rating

Before traveling to new destinations, it’s common for one to read reviews of either the hotel or airline one will be using. There are even dedicated platforms where users share their experiences and rate destinations, airlines, and accommodation hotels. Although some of the reviews may be genuine, others are outright fake and fabricated by the service providers to attract more customers. These fraudulent activities have become rampant due to increased competition among service providers. If a user’s experience is different from what they read in online reviews, it breeds mistrust and ruins the reputation of the service provider. 

The transparency offered by blockchain technology could go a long way into ensuring that online reviews are genuine, therefore, restoring consumer trust. In this case, the reviews of customers are made public in a secure blockchain platform, ensuring everyone sees and verifies its accuracy. 

7. Travel insurance

Blockchain is best suited for application in travel insurance to ensure data integrity for fair compensation of claims. For instance, say, an insured customer loses their bag and makes a claim to the insurance company. A smart contract using data oracles within a decentralized network could validate a claim and ascertain if the agreed thresholds have been met. Upon verification, the claim is automatically settled through cash deposits or refunds in delayed flights. 

Conclusion 

The travel industry is a fertile ground for blockchain technology to thrive, given the wide network of intermediaries that create a tangled web of interaction in a travelers’ journey. That said, only the established industry players can lead to the adoption of blockchain in tourism. This is because they hold the resources needed to materialize proof of concept of blockchain solutions and advocate for their use. 

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Crypto Daily Topic

6 Blockchain can Transform Human Resources Management 

In a world where the talent pool is in a constant influx of professionals, hiring the right person for an open position is quite overwhelming for any human resources (HR) department. Recruiters often have to go through numerous résumés, conduct interviews, and chase down references to find the right candidate for a job position. Even with the advent of career networking sites such as LinkedIn and Google jobs, finding qualified professionals is far from seamless. 

In a world where the talent pool is in a constant influx of professionals, hiring the right person for an open position is quite overwhelming for any human resources (HR) department. Recruiters often have to go through numerous résumés, conduct interviews, and chase down references to find the right candidate for a job position. Even with the advent of career networking sites such as LinkedIn and Google jobs, finding qualified professionals is far from seamless. 

In a world where the talent pool is in a constant influx of professionals, hiring the right person for an open position is quite overwhelming for any human resources (HR) department. Recruiters often have to go through numerous résumés, conduct interviews, and chase down references to find the right candidate for a job position. Even with the advent of career networking sites such as LinkedIn and Google jobs, finding qualified professionals is far from seamless. 

It gets even worse considering that millennials, who make up the largest percentage of the job market, are constantly changing their employers after every 2.8 years. In recent years, career paths have evolved in such a way that professionals rarely work their way up to retire as CEOs. Career ladders have become career webs fuelled by globalization, which has empowered professionals to change jobs quite often. 

Given the tedious hiring process and the detrimental consequences of hiring an ill-fitting candidate, HR departments need to upgrade their existing framework by leveraging newer technologies. Blockchain is one such technology though known for disrupting the financial industry; it has the power to transform the way HR interacts with the growing talent pool. 

Most promising Blockchain use cases in HR 

The HR departments being the storage of loads of employees data, blockchain finds various use cases in helping recruiters manage this data. These includes: 

1. Verification of employees

It is estimated that more than 60% of job seekers misrepresent themselves on their résumés. This lack of honesty has breached the trust between job seekers and HR departments, promoting the latter to rely on third-parties such as recruitment agencies who conduct background checks on potential candidates. Unfortunately, traditional verification processes used by these third parties aren’t effective and often resource-draining in terms of time and money. 

Blockchain has the power to transform employees’ verification process by creating a distributed database containing a candidate’s credentials and background data. Universities and colleges can publish an employee’s academic credentials, which are then shared with future employers. The database can also contain an employee’s previous position in another company with additional details such as performance indicators and general workplace conduct, which can be used to determine if a candidate is a good fit. 

All the data logged in this blockchain system is immutable, meaning that job seekers can’t alter nor falsify their credentials. As a result, résumés will become obsolete as recruitment agencies’ role diminishes, saving organizations time and money spent verifying employees’ data. 

2. Enhance data security

Human resources management involves dealing with voluminous data from financial transactions of an organization to sensitive employees’ data related to pay, healthcare, disciplinary records, and banking. This places HR departments at risk of data breaches in the face of rising cybercrimes. 

By implementing a blockchain-based database, HR data is secured, making it almost impossible for cybercriminals to gains access to employees’ and organizations’ records. Moreover, access to data on a blockchain network is limited and controlled, meaning that even those with access can’t arbitrarily make changes to the records. This protects organizations from both internal and external data breaches. 

Adding to its high-security standards, blockchain effectively decentralizes data as a key defense strategy against hacks. Unlike storing data in centralized silos, decentralization of data spreads across a large network of computer nodes, mitigating the risk of data being wiped in a single hacking event. 

3. Streamline payrolls and contractor payments

Most HR’s payment processing is done manually, resulting in time lags as invoices have to be reviewed. Also, banks that process an employee’s payment tend to charge extra fees cumulatively, eating into the overall salary. 

Blockchain payment systems can replace many manual processes, thereby eliminating time lags within the current payroll systems. As such, payments will be reconciled faster with less paperwork ensuring employees get their salary in time. Unlike bank transactions that charge expensive transaction fees, payment processed through blockchain systems charge almost zero transaction fees. This makes them ideal for sending cross-border payments in organizations that hire a remote workforce. 

The introduction of smart contracts can further improve blockchain payment systems by automating payouts ensuring employees are paid quickly without delays. For instance, say, a company hires a contractor and pays them on an hourly basis. Once an agreed number of work hours has been completed, the smart contracts automatically pay the contractor by executing the agreed terms of payment. 

For seamless transactions, smart contracts are linked to the company’s bank account and that of a contractor. As such, the HR department doesn’t need to regularly do a payment run since transactions are recorded in real-time, keeping track of invoices. 

4. Automate taxes and mitigate audit bottlenecks

HR is constantly grappling with evolving tax laws, which are further complicated by other factors such as bonuses, commissions, overtime pay, accumulated paid leaves, and other additional payments. Accounting for all these payments when filing taxes has proven to be daunting, given that the current systems are majorly paper-dependent making them prone to clerical errors. 

Blockchain’s ability to accurately record payment transactions can be deployed to streamline the taxation processes for HR. Therefore, it will become easier for auditors to trace all cashflows within a shorter time, freeing up organizations to concentrate on core business goals. 

Additionally, an organization’s in-house auditors can securely share the cashflow records with the relevant authorities to maintain compliance with tax laws. In the spirit of promoting transparency, all data entries in the blockchain network are protected from manipulation. So, organizations can have peace of mind knowing that they won’t get in the wrong books of the law for fraud or any other accounts manipulation crimes. 

5. Record employee attendance

Along the same line of accurate record-keeping, blockchain offers an ideal way of keeping employees’ attendance data. This is necessary in processing payments based on the number of working hours where disputes may arise in case of inaccurate data. 

ID 2020 is already using blockchain technology to store and verify biometric data such as fingerprint and iris scan. Similarly, human resources can use blockchain solutions to record employees working hours with accurate details of the exact time an employee reported and left the workplace. This data can be used to track attendance and payment systems to ensure fair compensation for wages and claims. 

6. Monitor employees’ professional life

It is possible to record the entire professional life of an employee in a blockchain network. Right from internship to various roles, an employee was assigned, including promotions, which all form a clear picture of the nature of an employee, thus taking subjectivity out of the hiring process. 

Additional data like whether an employee was promoted or the reason they were fired/left a company can also be recorded to help document their successes and failures. This way, employees will be encouraged to embrace their failures and learn from them rather than acting oblivious to them. Most importantly, the data will help companies make better decisions and allow strong performers to rise to the top. Additionally, an employee’s professional data can be shared among employees for efficient referencing. 

Conclusion

Embracing blockchain in human resources management goes beyond streamlining an organization’s operations. Employees are the ones set to benefit immensely from the adoption of blockchain in HR, as it means an organization has the best interest of its workers at heart. This is evident from timely and fair payments, meritocratic hiring process, and other benefits of HR blockchain solutions. Therefore, it important for all organizations to consider experimenting with blockchain to promote a good relationship with their workforce.

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Crypto Daily Topic

Why the Blockchain Hype Should End

In the last few years, blockchain technology has been marketed as a game-changing innovation that could change traditional payment and information-recording systems. Indeed, blockchain technology offers tremendous promise to become a key driver of the digital economy. Still, over-the-top marketing of its capabilities is killing it even before any of its solutions materialize.  The best-known […]

In the last few years, blockchain technology has been marketed as a game-changing innovation that could change traditional payment and information-recording systems. Indeed, blockchain technology offers tremendous promise to become a key driver of the digital economy. Still, over-the-top marketing of its capabilities is killing it even before any of its solutions materialize.  The best-known […]

In the last few years, blockchain technology has been marketed as a game-changing innovation that could change traditional payment and information-recording systems. Indeed, blockchain technology offers tremendous promise to become a key driver of the digital economy. Still, over-the-top marketing of its capabilities is killing it even before any of its solutions materialize. 

The best-known example of blockchain technology in action is in cryptocurrency, particularly Bitcoin, which grabbed headlines for its rocketing prices and volatility. These price swings led to a bitcoin-buying frenzy and the proliferation of cryptocurrency scams, which resulted in the entire crypto-market losing almost 80% of its value in 2018. 

In 2019, as the crypto-craze subsidized, blockchain technology entered into what Gartner Inc. calls the ‘trough of disillusionment,’ meaning the technology is struggling to live up to its hype. Most industrial blockchain concepts are stuck in the experimental stages and may not become a business revolution as anticipated. If the hype dies down and interest in the technology wanes over time, it could perhaps be the best thing to happen to blockchain technology, as it will force people to focus on the value proposition blockchain brings to the table.

Examining The hype cycle 

The blockchain hype can be best described as a gimmick used by businesses looking to capture gullible investors. Although this is not to say blockchain lacks an inherent value, the technology’s oversold optimism is somewhat unwarranted. 

As a recent advertisement survey showed, the term “blockchain” was one of the most overrated words. The survey suggests that many companies abused the word ‘blockchain’ to get free media attention and perhaps attract investors/clients. This is hardly a surprise as a year before the survey, a NASDAQ listed company – Longfin Corp – saw it’s shares soar a whopping 2,000% after acquiring a blockchain-empowered microfinance provider. Sadly, even companies unrelated to the technology world have boarded the blockchain bandwagon without examining the business value it offers to their industry. Such unstructured experimentation of blockchain solutions with a minimal evaluation of value at stake means that enterprises will not see a return on their investment. 

According to Gartner’s hype cycle, blockchain is still a couple of years away from revolutionizing business ecosystems. This couldn’t be truer, considering that the technology is still immature with a nascent market that has not yet shown a clear recipe for success. In the meantime, there are gaps between blockchain opportunities, and it’s real-world use cases. These include: 

i) Energy inefficiency

One of the biggest stumbling blocks facing blockchain solutions is the sheer amount of computational power required to run these solutions. Recording data on blockchain involves solving complex cryptographical challenges, which ends up consuming a lot of electric power. This is evident from Bitcoin mining, which has been known to be resource-draining in terms of electricity cost and hardware.

Besides the high energy demand, blockchain solutions still require ample storage to keep all the data. This is a huge challenge to small enterprises that cannot afford enough computational storage for their data. 

ii) Speed and Efficiency 

Blockchain technology is inherently slower than some of the existing infrastructures that can handle more transactions within a shorter time. A classic comparison to ascertain this claim is between Ethereum and Visa systems. Ethereum blockchain can handle about 15 transactions per second, while Visa processes approximately 45,000 transactions per second. This means that it is wiser for enterprises to hold on to the existing infrastructure than jumping on the blockchain bandwagon; otherwise, they’ll have to deal with slowed business processes. 

iii) Interoperability

The rise of blockchain technology has inspired developers to develop various iterations of the same, in an attempt to design unique solutions that meet industry-specific needs. While this is a good thing by itself, it creates many networks that work in isolation. As such, lack of interoperability among various blockchain networks can force enterprises to operate independently, yet they belong in the same industry. For instance, a bank might be using one blockchain solution, while another microfinance institution uses a different solution. As a result, it is almost impossible for the two to efficiently collaborate, especially in transactions that require them to work together. 

Key Blockchain Takeaways

The challenges mentioned above notwithstanding, there are several core insights about blockchain’s value that businesses need to understand. 

The focus is on cost reduction 

What’s forcing most businesses to experiment with blockchain solutions is that they fear missing out, primarily if they operate in a competitive industry. Such an approach obscures the real enterprise value of blockchain technology, which is to increase operational efficiencies by removing intermediaries and administrative efforts of record keeping. This is why the financial industry is more primed for blockchain solutions than any other industry, as it is built on trust between intermediaries. 

The productivity paradox 

By eliminating intermediaries and increasing operational efficiencies, there is a common misconception that blockchain solutions will equally increase productivity. This idea can be likened to the time when computing was introduced into the business world. Although it helped improve business operations, productivity statistics didn’t increase in equal measure. Given the dynamic nature of the technology world, it is rare for a solution to mature to optimal efficiency since there will always be newer and more promising technologies emerging within a short period. 

Conclusion 

There is only a handful of successful blockchain solutions in the market, and this has aided in killing the blockchain hype. As the dust settles down on the broken dreams and the disillusionment fades away, blockchain technology will be weighed based on its value rather than the abstract ideology of what it can offer. Nonetheless, it’s not all doom and gloom, since it is likely that blockchain technology may have arrived ahead of its time. Such was the case with Artificial Intelligence (AI) and machine learning algorithms developed in the 50s, but have come to find their use in the 21st century.

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Blockchain and DLT

Reinventing ERP Systems with Blockchain

An Enterprise resource planning (ERP) system is a software used by organizations to manage their operations. From accounting, procurement, project management, risk management, to supply chain operations, ERP systems are indeed the fiber holding all business operations. 

An Enterprise resource planning (ERP) system is a software used by organizations to manage their operations. From accounting, procurement, project management, risk management, to supply chain operations, ERP systems are indeed the fiber holding all business operations. 

An Enterprise resource planning (ERP) system is a software used by organizations to manage their operations. From accounting, procurement, project management, risk management, to supply chain operations, ERP systems are indeed the fiber holding all business operations. 

Usually, the software comes as a suite that includes performance analysis, budgeting, planning, and reporting tools to help boost a company’s performance. For industry-specific companies, ERP providers can design customized software to fit the specific needs of that particular company. 

But as business model dynamics keep evolving, the current ERP systems are struggling to maintain their functionality. An immediate solution would be to build new and improved systems to scale up existing ones. Although doable, building new systems will drain an organization’s resources in addition to compromising other key operational areas. Alternatively, amalgamating the current infrastructure with new-generation technologies is not only affordable but also an ideal way of keeping businesses up to date with technological trends. 

In this case, blockchain technology is the most compelling option, given its core record-keeping capabilities. To see the blockchain’s entry point into ERP systems, it helps to understand the inherent problems ailing the latter. 

ERP Systems Limitations 

First, it’s important to note that ERP systems function more like solutions and less like a product. So, it’s not a generic software that can be shopped right off the shelf and used immediately. That said, the systems come with a predefined functionality – meaning you can’t just add any feature when you need at will. This denies companies the flexibility of continually updating their systems to meet the dynamic needs of their business operations. If a business can’t upgrade its systems, it means that it can’t be competitive enough to offer a superior customer experience. 

Now, upgrading ERP systems isn’t entirely impossible. But as is always the case with updating in-house infrastructure, scaling ERP systems translates to extended downtimes in addition to the expensive costs of this undertaking. So, only large and well-endowed companies can afford to upgrade their ERP systems, which give them a competitive advantage over small and medium businesses. It becomes even more expensive when you factor in the regular maintenance costs required to keep the systems functional. 

On top of it all, ERP systems lack interoperability, meaning they can’t work in collaboration with other systems. This can be detrimental to an organization as it disintegrates its operations. For instance, an organization may have isolated systems for its supply chain operations, accounting process, and inventory management. Yet, these two operations need to work in harmony to minimize operational costs that go into maintaining these systems. Also, as they work in isolation, there is less transparency among the involved parties. In a supply chain, this would mean that the manufacturer, the wholesaler, and retailer operate on different software. Each stakeholder will have to trust the other party will maintain integrity. 

Why integrate blockchain into ERP systems? 

The benefits of integrating blockchain into ERP systems are derived from the fundamental properties of the technology; 

1. Strengthening data security and preventing authorized access 

ERP systems hold confidential data – which, if altered, may result in operational inefficiencies. For instance, ERP systems for accounting need to be secured from manipulation for auditing purposes. To safeguard all data entries, there is a need to integrate enterprise blockchain in ERP systems. 

Each record fed into the blockchain network will be validated and secured from third-party intrusion. The network generates digital signatures based on public-key cryptography. Only those who own these keys will access the data on the chain. 

2. Automation of processes 

Blockchain for ERP systems offers an opportunity for the implementation of smart contracts. The supply chain segment of an organization would benefit immensely from the use of smart contracts as it would mean less paperwork and more secure payments. The smart contracts can be programmed to initiate payments once goods are delivered and even track them throughout the shipping trail. Besides managing invoices, smart contracts can be used to verify inter-company, especially those involving a parent company and its subsidiaries. The transactions will be executed by smart contracts within the pre-set terms and conditions, which eliminate the need for third parties to oversee the transactions. 

3. Promote trust and transparency

Traditional ERP systems have failed to create a collaborative space within an organization or even between two related businesses. As such, when working together on a project, integrity is staked on the participants who, in most cases, fail to honor their end of the bargain. With blockchain ERP, integrity is shifted from the participants and placed on a tamper-proof system that makes it impossible for participants to be bad actors. 

In this case, blockchain works by removing the barriers between various ERP systems, bringing them together to form a single functional unit. For an organization, this would mean that different departments can work collaboratively, increasing the overall productivity of the company. Thanks to the newfound transparency, business owners can trust the credibility of the auditing reports. This is because all accounting data is recorded on an immutable network where any changes to the data are made public for all to verify. 

4. Freedom of customization 

As mentioned earlier, the current ERP systems are designed to function in a predetermined manner. For an ERP system to meet the emerging needs of a business, it has to be customized or designed entirely from scratch. Blockchain, on the other hand, is pretty customizable, especially now that there are a good number of platforms that support building decentralized applications. So, it’s easy to design new and improved blockchain solutions that meet the modern needs of a business. 

Integrating blockchain into ERP systems would, therefore, render them customizable as they are powered by dynamic technology. More so, blockchain is still in its maturation stages – meaning that there’s room for newer solutions as the business models change. As such, ERP systems that are powered by blockchain will not only give businesses a competitive edge but also improve their operations to meet customers’ needs. 

Conclusion 

ERP systems act as the backbone of any business and must process immense amounts of data transparently to guarantee streamlined operations. As businesses aim at increasing productivity, it becomes necessary to upgrade their ERP systems by pairing them with blockchain technology, which provides data security while enabling frictionless execution of business operations. 

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Crypto Daily Topic

Blockchain Meets Telecommunication Companies 

The telecommunications industry has enjoyed a front-row seat to some of the most exciting developments in the history of technology.

The telecommunications industry has enjoyed a front-row seat to some of the most exciting developments in the history of technology.

The telecommunications industry has enjoyed a front-row seat to some of the most exciting developments in the history of technology.

But, all that has changed in the current business environment where telco companies face stiff competition from newcomers in the market, particularly the internet-based communication services providers such as Whatsapp messenger, FaceTime, WeChat, Viber, and Facebook’s Messenger. 

As a result, telco enterprises have suffered revenue losses due to drop-offs in SMS users and roaming.

Currently, most of these enterprises have been reduced to just internet service providers. With this, they have managed to secure their position in the dynamic communication industry.

However, their position is at risk of being eroded further, especially given the gradual decrease in investment in the telecommunications industry after the infamous Dot-com bubble burst. 

To secure their place in the competitive market, increase revenue, and meet the new customer needs, telecommunications service providers will have to explore the disruptive potential of blockchain technology. Implementing blockchain solutions, however, isn’t as straightforward as it sounds as the telco companies run in a highly regulated industry. 

But according to a recent report, a good number of communications service providers – (CSPs) – are either considering or actively experimenting with blockchain.

So, despite the uncertainty, the pilot projects from these CSPs will lay the groundwork for others, showing them how future applications might work. 

Blockchain for communication service providers

As the industry anticipates full integration of blockchain solutions, let’s look into some of the opportunities resulting from this integration:

Inter-company collaboration

Telco enterprises are inherently complex in their architecture and demand significant amounts of investments. Case in point, billions of dollars have gone into designing and finally rolling out the 4G/LTE networks. Also, as the world anticipates the coming of the 5G network, telcos are under heavy pressure to invest in new resources, consequently intensifying the competition in the communication industry. Unfortunately, telcos aren’t guaranteed to reap returns on their investment even after moving their operations to the new generation network. 

As an alternative solution, telecom operators and service providers could come together under the decentralization of blockchain networks where they can share the cost of resources instead of doing it all alone. Decentralization would help create a sharing economy, bringing down the barriers of transparency while enhancing timely coordination among the telco stakeholders. 

Moreover, thanks to the transparency and immutability, all telecom companies, regardless of their size, can join the newfound cost-sharing economy, creating a level playing ground. This, in turn, promotes healthy competition in the industry.

Most importantly, returns on investment will be shared fairly among the participants using a consensus mechanism, which is basically a series of mathematical algorithms that reward participants according to their investment amount. 

With the cost of resources brought down to an affordable price range, telecommunications companies will be able to achieve wider network coverage and even offer high-quality services at a lower price than a single company would provide.

Additionally, smart contracts can also be introduced into the network to create new business models such as rentals and pay-as-you-go, which would increase returns to reasonable amounts. 

Roaming Fraud Prevention

Roaming fraud occurs when a subscriber uses the resources of the Home Public Mobile Network (HPMN) via the Visited Public Mobile Network (VPMN). Still, the home network can’t charge the subscriber yet is obliged to pay the VMN for the roaming service.

Usually, the fraud goes almost unnoticed, which causes the networks to take too long to respond.

The delays are majorly caused by slow data exchange between the home and visited networks.

There is also a lack of control over the systems in which the fraud has occurred, further contributing to delayed response time. 

By using a private blockchain network, roaming agreements will become more transparent. In this case, designated nodes from both telecom operators will verify each transaction broadcasted on the network.

The roaming agreement between the HPMN and the VPMN is settled by a smart contract which is generated while the transaction is broadcasted. So, anytime a subscriber is roaming, the VPMN broadcasts the transaction data to the HPMN.

In turn, the data triggers the smart contract to execute the terms of the roaming agreement. As such, the HPMN will automatically calculate the billing amount based on the cost of service provided and then send this information back to the VPMN. 

Identity management

Identity theft in the telecommunications industry is not only detrimental to the subscribers but also to the telecom companies.

When a subscriber falls victim to identity theft, the perpetrator ends up using the telecom services, yet it’s the victim who ends up paying the bill.

If well-executed, the perpetrator may go even to the extent of jeopardizing some of the services offered by the company leading to revenue losses. 

Blockchain can be used to secure subscribers’ identities and, in turn, cutting down the telecom revenue losses.

The subscriber will be required to register their device containing a carrier’s SIM card on the blockchain network, after which a private key is generated to safeguard the personal data contained in the device. Only the subscriber has the sole custody of the private keys meaning access to personal data is limited to the subscriber. 

Interoperability

There exist a plethora of messaging apps provided by the carrier and others by third-party communication services.

Unfortunately, these messaging apps can’t communicate directly with each other, rather a user from one app can’t send messages to another user in a different app.

This creates communication barriers, with some users resorting to downloading numerous messaging apps just to enjoy the convenience of communication with other users on different apps. 

For example, iMessenger users cannot communicate directly with Whatsapp or Viber users. As such, they’re forced to download the other messaging apps for efficient communication.

Blockchain can break communication barriers by integrating messaging apps to create a decentralized communication protocol that exists in an interoperable ecosystem. The newfound interoperability can be used to facilitate the Internet of Things (IoT), which requires seamless communication of various devices and apps.

Conclusion

The telecommunications industry is a fertile ground for blockchain technology to thrive and inspire innovative business models.

With telco giants such as Vodafone leading the way towards embracing blockchain in the industry, it is expected that new solutions will be designed, which will guide the other stakeholders in implementing blockchain solutions.