Blockchain, the underlying technology behind cryptocurrencies such as Bitcoin, has moved from an abstract concept to concrete initiatives by both startups and established companies across all industries. The platform is now being promoted as a solution for identity, security and fraud prevention, with some predicting blockchain will be the foundation for the next generation of the Internet. In boardrooms across the country, Clevel executives are evaluating their blockchain strategies.
According to Phocuswright’s Norm Rose, Blockchain Value Propositions for the Travel Industry include identification, fraud prevention and “smart contracts”.
IDENTIFICATION: a shift from multiple identities, histories and loyalties across suppliers and intermediaries into a single identity that can deliver value across supplier categories. Conceptually, the traveller may retain his or her single identity and use it for security, transactions, payments and loyalty redemption across suppliers. Though this lofty goal is likely many years away, blockchain will likely have impact in each of these areas within the next few years.
FRAUD: a major problem for all sectors of the travel industry. Blockchain ledgers are immutable and are distributed among multiple computers. With each computer in the network constantly checking other nodes for validity, blockchains are extremely hard to hack and thus significantly reduce fraud.
SMART CONTRACTS: For the travel industry, programmatic smart contracts that execute based on a preprescribed parameter could improve the efficiency of transactions. The most attractive aspect of smart contracts is that they can be done directly between the buyer and seller, eliminating the middleman.
EXAMPLES OF BLOCKCHAIN INITIATIVES IN THE TRAVEL INDUSTRY
Airbnb is exploring the use of blockchain in a number of ways. Meanwhile, Webjet has built a blockchain proofofconcept with Microsoft, and is testing it with a number of hotels. Winding Tree is a new Silicon Valleybased start-up that is building an opensource decentralised distribution platform for travel