At last a use for Blockchain
I don’t know about you but I have been to quite a few presentations on blockchain and read plenty of articles on the subject. I now think I understand what blockchain is all about, but no one has proposed an application for the technology within the travel industry that would be properly useful.
Many of the travel related applications that I have heard about are of the ‘technology looking for a solution’ genre rather than the other way around. This is set to change, though, as finally someone has come up with a travel industry blockchain initiative that makes sense and could yield great efficiencies for the industry.
Firstly, though, let me explain what blockchain is about. It is important to understand this when considering how it can be applied to a business issue. Here is Wikipedia’s definition:
“A blockchain, originally block chain, is a continuously growing list of records, called blocks, which are linked and secured using cryptography. Each block typically contains a cryptographic hash of the previous block, a timestamp and transaction data. By design, a blockchain is inherently resistant to modification of the data.”
That is not the greatest of explanations, so I will amplify. Blockchain is a form of database. It’s most popular application is recording financial transactions. Unlike just about any other database, a blockchain sits on many computers, so many that you could consider the data recorded within a blockchain to be a public record of the transactions. Think of it as a widely distributed ledger of transactions which is not owned or controlled by any single organisation. When a new transaction is entered into a blockchain, all the separate computers which it is spread across have to agree that the transaction meets a defined set of rules before it is recorded. As the distributed ledger or database sits across many computers, it is just about impossible (I never say never) to defraud.
The most famous application of blockchain technology is to record the buying and selling of Bitcoins and other cryptocurrencies. By the way, if you bought some Bitcoins in the early days and watched their value soar, well done, the drinks are on you next time we meet.
I do wonder whether these blockchain based cryptocurrencies may have tarnished blockchain with a poor reputation? These currencies seem very well suited to speculators and money launderers.
Back to the travel industry; a new application has been launched which I believe will result in a significant increase in trading efficiency between travel industry players. This new initiative is called Travel Ledger. It is planned to be an independent billing and settlement platform for the travel industry that will highly automate the travel purchasing process along the entire distribution chain of intermediaries for non-air travel services. (It is not seeking to replace IATA’s BSP.)
Travel Ledger will allow all billing records between suppliers and intermediaries to be stored in a shared, decentralised and authenticated ledger, establishing a 'single source of truth' for non-air travel transactions across the travel industry. It will support recording and settling of these transactions in a secure and transparent manner.
Unlike BSP and IATA, there will be no single organisation owning and controlling the database. It will be both owned and run by the travel community. Voting rights will be granted to the companies providing power to the network (the masternodes) and to the holders of the value token used on the platform.
Travel Ledger is the brainchild of Roberto da Re who founded travel system supplier Dolphin Dynamics. He has taken a back seat there to focus on bringing Travel Ledger to fruition. He is in the process of founding the Travel Ledger Alliance. This will be a not-for-profit organisation with an advisory board of industry players to steer the project. This team will set the standards and control access, ensuring that only accredited travel companies will be given access. Already on board in addition to Dolphin Dynamics are two further travel technology companies - Intuitive Systems and Tourism Technology - as well as some yet to be named travel corporations. Travel Technology Initiative, a pan-European not for profit organisation, will also be involved
I will let Roberto have the last word. In Travel Ledger’s inaugural press release he says, “While similar schemes have been attempted before and there are niche examples of this working in some countries or verticals, the business model we propose can make this a truly global initiative, delivering huge benefits to all travel companies worldwide.”