Travel businesses should consider how they can use emerging blockchain technology to remove friction in their existing processes rather than how it fits into their tech stack.
Kevin O’Sullivan, lead engineer at SITA Lab, said he agreed with Gartner that the technology, most famous for being behind Bitcoin, is five years from maturity.
He said there a lot of “nonsense” use cases being mooted for the technology but with 2,138 blockchain start-ups and $2.5 billion of investment there is widespread interest in it.
Blockchain is a decentralised, distributed leger of data that is not stored in one place and impossible to change and can be used to verify transactions between two parties.
They are managed by peer-to-peer networks that validate the blocks of data that are timestamped and grow continuously.
O’Sullivan said the biggest impact is likely to be in the B2B world rather than B2C. “It’s going to enable more direct transactions between customers and suppliers.
“The wrong question to ask is where does it fit in my tech stack, the right question is how do I think about my business transactions where blockchain can remove friction. How do I re-engineer my business.”
Firms like Uber which has built to a valuation of $70 billion by simply acting as a broker verifying credentials between supplier and customer could find they are no longer needed, he said.
“Because it’s distributed the data is verifiable and it’s the same as what everyone has so it can be trusted. It cuts out paperwork so you just join the network and get the same data.
“There are endless lists of use cases. Many are nonsence, we do not know if they will work or not.”
O’Sullivan said in aviation identity verification and payments seem promising areas for block chain as does cargo which involved huge amounts of paperwork.
But he said much will depend on whether authorities and national governments embrace blockchain to create public legers and networks that can be trusted.
He added it is not an answer in itself: “Blockchain is not the end, it’s an enabling but of technology you implement and then you have to start thinking about how you use.”
Blockchain is currently like where the internet was in the 1990s in that there’s a huge amount of interest but very few people really understand it, he added.
“It took 20 years for usage to evolve, legislation to evolve, and business behaviour to change and adapt. That’s where we are now with blockchain. There are a lot of non-technical blockers.
“Is this the real thing? I do not know. It is going to be anything more than a niche solution? We will have to see.
“There are a lot of problems to solve and not many are technical but legislation and regulation.”
Clare de Bono, Amadeus director of product and innovation, said Blockchain is one of the areas it has identified to pay attention to and work with start-ups on to assess its promise for application in travel.
“In the last 18 months the number of opportunities related to blockchain has gone wild, it’s really exploded recently. Is there a business opportunity to really make things better in the industry.”
Do Bono said blockchain currently is simply not scalable enough to replace GDSs with its limited capability of seven transactions a second.
There are also significant cost issues due to the computational power and therefore energy required, although this objection is based on Bitcoin which is managed by a network of ‘miners’.