Crypto may be technology of yesterday, but blockchain technology in the travel and tourism space keeps evolving and growing like never before. There is a massive number of opportunities that blockchain technology provides in the travel industry. A myriad of startups are using it to improve and innovate user experiences.
A Quick Guide to Blockchain
Blockchain systems are decentralized digital ledgers that store, validate, and secure transactions. Each transaction works as a chain of blocks, with each block containing a cryptographic hash of the previous block, including the transaction data and a timestamp.
Blockchain is being used to track digital transactions transparent and securely, keeping all users in the loop about their digital transactions. With blockchain technology, users can make financial transactions without having a need for a third-party intermediary, such as a payment processor or a bank.
This effectively cuts out the middleman in a transaction, making the process much more cost-effective for all stakeholders involved.
While exploring the technology behind blockchain can be complicated, it is important to outline its core features that are crucial for changing the future of travel.
A Shared Ledger
Records of various transactions are available to all members in a blockchain platform, providing each stakeholder with a single source of truth. In the case of a private blockchain, users must submit a personal key to access and obtain records and details of their transactions.
Supply Chain Transparency in Travel
One of the most important aspects of travel is the trust aspect. The goal of every organization is to make guests feel secure about their transactions and reservations. However, this trust can be easily undermined by various intermediates that are involved in the flow of information.
Moreover, the travel industry, as it stands today, may be lacking in supply chain transparency. The lack of transparency leads to distrust and various gaps in information.
This problem is solved by blockchain technology in various ways. For one, blockchain systems allow for an open and transparent supply chain that allows travelers to track their transactions. Secondly, blockchain eliminates intermediates that may charge exorbitant fees, allowing businesses to reduce their prices.
Payment Transparency
The technology behind various digital coins, such as Bitcoin and Ethereum, has the potential to solve many friction points related to booking and payments as well. Blockchain can be impenetrable to guarantee a transparent process where airliners and hotels can allow guests to make reservations without going through intermediaries.
This can also be used for payments and could solve the problems of high credit card processing fees charged by payment providers.
For example, it is possible for blockchain airline booking platforms to partner with travel agencies and use blockchain technology to make an open and decentralized booking experience.
The blockchain will keep a record of all reservations, and travelers will be able to manage their bookings in a single place. Such a platform will allow airliners to directly book reservations with guests, thus eliminating the need for a third party that could charge exorbitant fees, resulting in lower payment processing and booking fees.
Blockchain technology can significantly improve safety in the process. Since every transaction is safely recorded on a digital ledger, it becomes much harder for cybercriminals or hackers to manipulate records. This can solve the highly prevalent issue of credit card fraud, identity theft, and other aspects of cybercrime.
Moreover, blockchain can allow travel companies to create secure digital identities for their guests, which can streamline the security process at various travel checkpoints, including airports.
Unparalleled Security
Blockchain technology and encryption go hand in hand. Essentially, digital ledgers add an extremely resilient layer of security to the system. Blockchain uses cryptography (a mathematical algorithm that serves as a firewall to block various attacks) to add a powerful layer of security for all stakeholders.
Every single piece of information on the blockchain is stored using cryptography. In other words, the information on the network becomes hidden from prying eyes.
For instance, when guests try to access their personal data, they will use a public key as well as a signature to interact with the blockchain. The blockchain will only approve their request if their key is authentic. This makes it virtually difficult for hackers to break into the ledger because they do not have access to this unique key. Even if they find a way to steal the data, they will have no way of decrypting it.
Solving the Problem with KYCs
KYC (short for know your customer) is a process that allows businesses to verify the identity of their customers. This ensures that they are not engaging in nefarious activities like identity theft, money laundering, and bribery. The entire process is rather challenging to implement and is a slippery slope because it makes traveling difficult (and sometimes dangerous for guests).
However, a decentralized digital ledger, courtesy of the blockchain, can solve these pain points by ensuring that all the data is transparent and accurate. A new block is only accepted once its data is verified by all the nodes in the blockchain. But any blocks that fail to have a high enough quality score will be deleted.
In short, blockchain will provide stakeholders in the airline industry with more accurate data because different nodes are used to verify the information. There is a very low, almost negligible, chance of multiple nodes containing the same error.
Blockchain is Affordable
The biggest sticking point in implementing new technology, including blockchain, is its overall cost. Blockchain is an affordable solution that facilitates cheaper, faster, and safer travel for guests. Not to mention the fact that eliminating third-party costs can empower both guests and travel companies.
The decentralization aspect of the blockchain, coupled with lower commissions, makes it easy to implement,
One such example of a decentralized application that takes advantage of the blockchain is Locktrip. The platform allows travelers to make reservations at various hotels with zero commissions.
Wrapping Up
The future of the travel industry, as well as its security, is tied to the implementation of blockchain. By reducing the need for various intermediaries, the blockchain can increase transparency, improve security, and make traveling more efficient, secure, and streamlined for everyone involved.
