After a decade of the launch of Bitcoin Blockchain whitepaper by Satoshi Nakamoto, I start my journey in blockchain technology. From the past couple of months, I have been following up with the developments from the smart contract hacks to the recent launch of Facebook Libra Blockchain whitepaper. I am intrigued by the growth of this industry in over a decade; but even now, most people focus on the negative impact of this technology. As humans, undoubtedly, we are prone to criticism of a new idea rather than looking at its positive implications for a better and trustless world. The evolution of the digital world from 1974 to 2019:
In this article, I will go over the importance of Blockchain and how cryptocurrency is correlated with the aviation industry. Cryptocurrencies are a means of financial transaction/payment from party A to party B in any blockchain ecosystem. The above six significant pillars of blockchain are the mechanism for forming a new and secure ecosystem.
Since, more and more developers, enthusiasts, and evangelists are leading the blockchain technology; it has been evolving at a more durable pace than suspected. Every blockchain community is ensuring to build a secure and user-friendly ecosystem for better versatility. According to IDC estimates worldwide spending on blockchain solutions projected around $2.9 billion in 2019, an increase of 88.7% from 2018. It is expected to reach $21 billion in 2025, wherein Aerospace industry is executing blockchain technology in 75% of the overall activity, i.e., 754 billion dollars per year in industrial settlements and payments, digital identity management, procurement transformation in B2B businesses, etc.
Overview of Blockchain Technology in the Aviation Industry:
My previous article highlights the potential growth in the aviation industry and the factors leading to a 7.6 trillion dollar industry. As new technological adaption will be an essential solution to some of the drawbacks, blockchain technology will be one of the main factors to reduce costs and maximize efficiency. The five crucial areas of blockchain adaptation are:
- Baggage, Cargo and Spare Parts: Blockchain facilitates tracking of the status and location of valuable assets such as passenger bags, cargo, and aircraft spare parts in a very reliable and immutable manner as these assets change custody; this provides an opportunity to enhance visibility and transparency as this type of items move across the value chain. Capabilities could potentially unlock new product development areas, support the streamlining of the process, and equip the providers to deal with disruptions.
- Travel Value Chain: Airlines and other actors across the value chain trade products & services, spend significant efforts and resources on contracts, execution of contracts, monitoring the fulfillment stage, reconciliation, invoicing, and settlement. All these efforts can either be eliminated or considerably simplified, leveraging the concept ofSmart Contracts.
- Frequent Flyer Points: Blockchain can significantly streamline the earning, spending, accounting, and reconciliation of frequent flyer points by tokenizing these assets into becoming digital and pervasive. While the continuous rise of passenger load factors is good news, it makes it more difficult for airlines to facilitate the redeeming of points for tickets. In addition to the balance sheet liability issue, the process of earning, redeeming, and exchanging ripe for innovation are other challenges.
- Passenger and Crew Identity Management: Blockchain could streamline the identity management of passengers, enhancing the experience, protecting privacy, and also enabling airlines and the extensive value chain to do business in digital environments.
- Distribution and Payment: Blockchain allows airlines, travel agents, and others across the distribution space to collaborate better while co-delivering travel products and services. The anticipated changes could expand the distribution reach parties involved, and efficiency of how travel products and services are aggregated. It also can move payment towards being more transparent, real-time, and low-cost.
Eric LEOPOLD, Director of Transportation, IATA, recently released the Aviation Industry whitepaper predicting the Future of the Aviation Industry 2035.
IATA initiative towards blockchain technology includes:
IATA coin backed by EUR, USD, and GBP currencies.
IATA Digital Certification Authority focused on
- Identity management of entities (e.g., travel agent ID)
- Facilitating integrity of content (e.g., completeness of the airline offer)
- Availability of the certificate verification platform.
Digital Finance will use Smart Contracts to reduce the airline direct operational back office cost and increase back-office efficiency, this initiative is supported by IATA Financial Development Working Group.
The benefits are expected to come from a simplification of the contracts, contract enforcement, preventing disputes by having a single source of the truth, monitoring of service delivery during the fulfillment stage and introducing real-time service acceptance, along with streamlining the process of accounting, reconciliation, invoicing and settlement.
The Travel Grid:
Companies integrating Blockchain Technology in Aerospace:
In Supply-chain sector:
14bls: Supply Tracking a blockchain technology that allows the supply chain of aircraft components to be documented thoroughly and with absolute transparency.
Sorablocks: a blockchain-based platform for the aviation industry, which brings transparency to the management of kerosene across all airlines and airports.
Skyy network: a blockchain-based solution that consolidates the aviation management of drones in a decentralized and clearly regulated system, enabling the rule-based and automated operations of drones.
In Travelers experience sector:
Sweetbridge: a virtual blockchain-based marketplace with a scalable solution for multi-vendor loyalty programs.
SkyBuys: a global blockchain-based rewards platform for airport retail.
Avinoc: a freely available, transparent database for the coordination of private business flights – without an third party intermediary.
To improve airline-specific operations and the associated processes,
Vchain: a patented blockchain SaaS solution for digital identity management.
BagX: a neutral blockchain platform for baggage handling developed by a Swiss-port team. This will make the process completely documentable and transparent across all the involved stakeholders.
500labs: a decentralized data network for the global aviation industry to mitigate the effects of flight delays, among other things.
QuillHash: Offers consultation and development on Blockchain services. Track and trace BAAS (blockchain as a service) service is widely applied in diverse domains.
Winding Tree:Aims to disrupt distribution and inventory management for the travel industry, with flights and hotels in its scope.The concept is envisaged to use a distributed and decentralized ledger, creating a marketplace where transactions related to travel bookings will be recorded.
Some of the initiatives to develop a better Blockchain ecosystem for the Aviation Industry:
- GE Aviation, which supplies jet engines to about 60 percent of the global airline industry, has built a supply chain track-and-trace blockchain with the help of Microsoft Azure.
- Singapore Airlines Kris-flyer: Frequent Flyer Program is leveraging Blockchain to streamline redeeming of points among-st other benefits.
- Boeing has filed a patent on using a Blockchain-based anti-spoofing GPS system.
- French airplane manufacturer Airbus has officially joined the Hyperledger Project, the Linux Foundation-led blockchain initiative.
- Air France, KLM and Winding Tree Partnership.
- Lufthansa /SAP – Aviation Blockchain Challenge
- SITA – Aviation Blockchain Challenge
The blockchain does one thing: It replaces third-party trust with mathematical proof that something happened. – Adam Draper
As IOT, Artificial Intelligence, Machine Learning, AR/VR, and Automation will be streamlining in coming days, I believe Blockchain technology will play an essential role in making these innovations environmental friendly for a sustainable future!
Will, the integration of IOT and Blockchain in supply-chain management, create more powerful optimization?
Token: Crypto-tokens are special kind of virtual currency tokens that reside on their own blockchains and represent an asset or utility.
Blockchain: Blockchain is resistant to modification of the data. It is “an open, distributed ledger that can record transactions between two parties efficiently and in a verifiable and permanent way.
Smart Contract: Smart contracts are self-executing contracts with the terms of the agreement between buyer and seller being directly written into lines of code. The code and the agreements contained therein exist across a distributed, decentralized blockchain network.
Proof of Work(PoW): Proof of work describes a system that requires a not-insignificant but feasible amount of effort in order to deter frivolous or malicious uses of computing power, such as sending spam emails or launching denial of service attacks.
Delegated Proof of Stake(DPoS): Delegated proof of stake (DPoS) is a verification and consensus mechanism in the blockchain. It competes with other proof of work and proof of stake models as a way to verify transactions and promote blockchain organization.
Consensus: It’s just a way for a diverse group of individuals/entities to make decisions together and move together towards a common goal.
IATA: International Air Transport Association
SaaS: Software as a service
IOT: Internet of Things
AR/VR: Augmented Reality/ Virtual Reality