As blockchain technology continues to grow in popularity, it’s only natural that we will see it in more industries. And with all the blockchain buzz, we have been asked, “How can this technology be applied to the travel industry and will there be any perceived benefits?”
What is a blockchain?
When most people hear “blockchain,” they think of Bitcoin. These blockchains are known as proof-of-work systems. Proof-of-work is a concept where a collective group of people/systems work together to verify the data they are storing. In the case of Bitcoin, this works very well because Bitcoin has an extremely high limit on the number of coins it can generate and the lack of central authority requires users to work together to create those coins. So how do we know that the amount of Bitcoin in a given wallet is valid?
This is where proof-of-work comes into play. Every person mining for bitcoins is at the same time validating other users’ data. Once a block of data is “mined/verified”, it is added to the chain. This is a very time-consuming process and takes a large pool of users about 10 minutes on average to mine a single block. This 10-minute limit is primarily done for security purposes and can be different depending on the cryptocurrency.
Now that you have an understanding of how blockchains work with cryptocurrencies, you are probably asking, “How can I apply this to my business?” For starters, proof-of-work systems work great in the public domain where all parties must agree on the validity of new blocks. However, when you are an enterprise agency and have a finite set of products to sell, proof-of-work systems are counter-intuitive. You will find that their security domain is not fit for enterprise needs, because if there is no central authority, we cannot guarantee that we are actually selling anything or worse, giving products away for free.
Say hello to distributed consensus-based ledgers. This is where enterprise systems will really benefit because they maintain the concept of “trusted issuers”, or simply put, people who are allowed to add assets/products/inventory to the chain. However, because the system is distributed and there is a collective group of trusted servers validating our data we still get the “consensus-based” inserts. Finally, distributed consensus-based ledgers take a lot of features of blockchains (cryptographic signing, distributed networks, p2p, etc.) and apply them to their products. Hyperledger is a great example of this practice.
