Bitcoin has garnered much attention due to the sudden hike in price, giving birth to tons of over-night millionaires. However, this is not the main reason behind the success of the cryptocurrency. What Bitcoin has brought to the world is the genius idea of blockchain, a technology with powerful potential.
Now, Singapore Airlines is ready to launch their own blockchain-based loyalty digital wallet. They aim to release the new system by August 2018.
Frequent travellers of SIA will be familiar with the concept of the Krisflyer frequent flyer miles. It is a system which allows travellers to receive points proportional to their flying distance. Travellers will then be able to use these mile points collected to exchange for benefits, including free flight.
SIA aims to “digitalise” this system by pushing out a new Krisflyer “digital wallet app” employing “world-first blockchain-based” technology. This blockchain-based technology is much safer than current method of recording transactions and will give greater assurance to Krisflyer members that the records are accurate.
Benefits to Consumers:
Krisflyer members may have face challenges on several aspects of the programme. And this new technology aims to eliminate those issues.
The blockchain technology, inspired by Bitcoin, will deal with issues such as the depreciation in value of points over time, changes in the loyalty programme and even expiration. Since the blockchain technology keeps a detailed record of all transactions, verified by everyone involved, there is no way your miles will just suddenly disappear.
Benefits to SIA:
This technology will, of course, benefit SIA trememdously. The traditional method of redemption of travel miles simply means that SIA sacrifices one seat to the customer. This results in a huge loss for SIA.
With the implementation of the Bitcoin-like technology, SIA will be receiving the tokens in exchange for a seat. They can then sell the tokens to buyers in the market. So basically, the seats are funded by a different buyer.
So, what’s left?
SIA has already conducted their proof-of-concept exercise with KPMG Digital Village and Microsoft. The main work left, before this technology is pushed out, will be on SIA’s part to sign up retail merchant partners in Singapore.
This is indeed an exciting start to the technology age in Singapore and possibly the world.
Much of the blockchain technology has simply been wasted on speculative investments of tokens such as Bitcoin without fulfilling their true potential. While it seem like a good market to make it big, as long as there is winners, there will be losers.
This practical application of blockchain is likely to be adopted in the future by the hotel and credit card industries too. SIA is simply just a warm up for consumers to get use to digital currencies.