Bitcoin is a form of currency that has steadily become more and more prosperous. Created, used and exchanged electronically, away from the worlds of banks and payment gateways, bitcoin continues to rise. But what are the details surrounding bitcoin? And what the current trends in the world of cryptocurrency? Riccardo Campione, Les Roches professor and a pricing and revenue specialist, provides us with all the details.
What is blockchain?
Blockchain is a technology that could change the operating models of businesses across industries. It uses sectioned data records, known as blocks, arranged in an ever-expanding chain across a peer-to-peer network. Each block holds a cryptographic hash of the previous block in the chain, a timestamp and transaction data.
The hash ensures that transactions can be traced accurately to their source, while the decentralised storage model makes the chain virtually impossible for hackers to manipulate. A “public key” option gives each member of the peer network access to transactions, allowing for greater transparency and reduced risk.
What is cryptocurrency?
Cryptocurrencies like Bitcoin are exchangeable assets that use blockchain technology to verify and secure asset transactions. Beyond security, they also promote efficiency by eliminating fees and expenses as they smooth and speed up banking and payment processes.
[quote]Some experts worry that threats and vulnerabilities will be exposed to the long-term use of the technology. However, until then, cryptocurrency continues to become more and more prevalent[/quote]
How is blockchain technology used?
Blockchains are useful as much more than just digital assets. Countless applications are already in use. ‘Smart contracts’ give security and transparency to a range of contracts, no matter how much they are worth. Existing blockchains can authenticate texts, enforce and track copyrights of images or music, and automate complex processes such as incorporation. The horizon of the rise of blockchain technology is barely visible, and the future is so bright, well, you know…
Will blockchain shine on the hospitality industry?
Here are four ways the light is already streaming through the hotel window:
- Direct Bookings. A blockchain transaction involves only the merchant and the customer, eliminating OTAs. Lock-chain is a cryptocurrency which offers a zero-commission marketplace where guests can book rooms at no extra charge to the customer or the hotel. Transactions are secure, trackable and irreversible.
- Smart Contracts are trackable and irreversible. Once initial terms are set between distributor and hotel, commission rates dynamically change over the course of the year as room rates change for the season. All changes are automatic, transparent and secure.
- Guest Identification. Cryptocurrencies can identify guests, requiring only a fingerprint to confirm at the desk. This will reduce wait times.
- Loyalty Programs. Elements, a blockchain based universal currency specially created for loyalty programs can be given and accepted by multiple merchants. Hotels can offer points for travel-related spendings like plane tickets and shopping.
As cryptocurrency and other blockchains light our way toward a global virtual economy, most would agree the benefits outweigh the risks. But some experts worry that threats and vulnerabilities will be exposed to the long-term use of the technology. However, until then, cryptocurrency continues to become more and more prevalent, and will no doubt become a contributing factor to the hospitality industry in years to come.
Riccardo Campione
Les Roches Professor
Pricing & Revenue Expert
Find out more about studying for a BBA in Global Hospitality Management.
