Why blockchain isn't just hype

A virtual chain is currently causing a commotion. Blockchain, the technical basis for the cryptocurrency bitcoin, is getting ready to change all possible processes, whether it's at banks, haulage firms, online retailers or governments. New opportunities are also opening up for the hotel industry. HRS has implemented the first applications.

text: Jürgen Baltes 

Blockchain' is a term that almost everyone is likely to have heard by now. The US state of West Virginia recently got its citizens to vote on a blockchain app. The major bank HSBC has concluded a trade financing deal using blockchain for the first time. The Polish credit agency stores information on 25 million individuals and companies in a blockchain. And BMW is planning to record the mileage of lease vehicles with blockchain, to make fraud practically impossible.

Blockchain's technical construction gives it two incredible properties. Each time it stores something, it is practically impossible to change and is also transparent. Data sets (blocks) are connected to each other in a chain that goes on and on. The encrypted database is on hundreds or even thousands of different computers. These check each new data set before it is added. You could imagine it as being like a meeting where several participants take notes and continuously counter-check what the others are writing. Only if all the texts are identical are the resolutions that have been adopted valid.

The process was initially used only to send bitcoins and other internet currencies, which have acquired something of a bad name, around the world. Entirely without banks, because the built-in security means that partners do not need to know or trust each other. However, more and more companies are now relying on the technology – without any connection whatsoever to any kind of cryptocurrencies. It allows shipping containers to be tracked around the world, so that US trading giant Walmart can within seconds identify foods that have been recalled. The flight reservations system Amadeus is currently testing its ability to trace lost luggage in real time. The list of ideas is long: money transfers, patents, entries in the land register and copyrights could be managed easily and efficiently with blockchain. The circulation of messages, images or videos, for example – if suspected to be "fake news" – could thus be traced back to the source accurately and in a very short time.

 

Blockchain at Siemens and HRS

It's pretty obvious that blockchain will also become an issue in the travel sector and the hotel industry. Siemens and the HRS Innovation Hub have just implemented a first project – an unequivocal identification system based on blockchain. The "Corporate Hospitality Blockchain" is likely to be one of the first in the sector. The booking, the traveller who is booked to travel and a number of other details are indivisibly linked in the data chain. The hotel simply receives an e-mail link allowing it to view this data. The traveller must confirm his identity using a PIN known only to him. It will no longer be necessary to check identification, business cards or other credentials.

The entire system has been in place in Beijing and Shanghai since June, but is also being tested in the first few hotels in Germany, says Martin Biermann, Vice President Product at the HRS Group. The fact that the data in the blockchain has been verified and is always correct not only ensures that the booking and the rate match the traveller's personal details. It also enables registration forms to be completed in advance and prevents recurring errors on invoices, such as incorrect names, addresses or company names.

New sales channels using blockchain

Biermann also sees a key application for blockchain in the secure management of personal data – particularly in view of the new EU General Data Protection Regulation (GDPR). "A hotel typically makes sales via numerous channels, which are used to exchange a range of personal details and payment information," Biermann says. It's barely possible to track – and if necessary to prove – which data has been stored where and who has accessed it. HRS has therefore set itself the task of entering this data into a blockchain and thus allowing corporate customers to use it, for example, while also being able to guarantee that it will be deleted later.

Another possibility that seems attractive is that of concluding contracts via blockchain, so-called "smart contracts", which will be fulfilled depending on developments in previously agreed parameters. In negotiations between hotels and businesses, for example, it is becoming increasingly common to switch to continuous sourcing, says Biermann. For example, checks are carried out each quarter to determine whether the rates that were negotiated were actually available in sufficient numbers of cases or whether the promised volume was achieved. "If we have personal data, rates and bookings in the blockchain, we could also automate this process, which is sometimes elaborate," Biermann says. He thus sees HRS as the initiator of an "independent system in the middle, making work easier for both sides".

However, we can also expect more from blockchain, such as secure and inexpensive payment systems that are completely independent of bitcoin et al. Or new sales channels. The travel group TUI, for example, wants to use blockchain to manage all of its quotas of beds. The Hobo Hotel in Stockholm is in the process of putting its own range of services on a blockchain, so that third-party providers can access them automatically and can put together travel packages. More ideas will no doubt follow.

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