If you wanted to make a phone call in the old days, you would put a 10p coin in a red telephone box, the box would double check that the coin is legal tender and then allow network access. It didn’t care who you were, where you were from or how long you had lived at your current address, it just knew that 10p ‘token’ was being exchanged for network access.
In much the same way, blockchain uses tokenisation to create direct transaction links between network operators and their B2B and B2C customers, overcoming the inaccuracies and complexities of legacy systems that depend on third parties to verify each and every transaction.
It’s a technology with application for all industries: the financial sector is deeply involved with blockchain in various guises, but equally we have identity, medical and now even voting data that can be shared over blockchain – the latter of which will become a huge industry in its own right.
However, in telecoms, blockchain is about to become as important to the future development of the industry as the physical infrastructure that will scale capacity for tomorrow’s networks. Because as more and more people are connected, the manual intervention that is currently required to allow various parties to transact will cease to be practical.
Threat of the innovators
Blockchain is not a solution in its own right: it is an enabler to a new way of interacting with customers and this is why today, blockchain adoption is now front of mind for the C-suite, as well as engineers.
The network operator is a beast of an organisation and, comprised of such monolithic stakeholders, the telecoms industry as a whole doesn’t always have the agility necessary to innovate at speed. In fact, the telecoms industry tends to work very slowly, creating a situation where it doesn’t need to innovate as fast as other industries.
However, blockchain enables network operators to offer the kind of service and flexibility that today’s customer expects as standard: it will promote retention, innovation and the flexible delivery of services that modern life demands.
Imagine a new player enters the market – an entrepreneurial start-up with a desire for innovation – and they have developed a way to use blockchain to create a competitive advantage. They will have the cost efficiencies and flexibility in their systems to create significant disruption to these players.
There is additional scope for threats from the “obvious innovators”, those who will cherry pick and improve different aspects of their service offering with blockchain and do so in a much more efficient, and therefore competitive, way.
Operators know they must stay ahead of the curve, yet the majority of use cases remain proprietary to specific operators. For blockchain to begin to move towards its full, industry-wide potential, its application must begin lower in the technology stack; it must become part of the industry’s foundations. It’s not a case of if this will happen but when.
At Minima, we have a three-point approach to achieving this with network operators: education around blockchain’s potential; proving that blockchain works; and developing blockchain to a generic standard so these required levels of interoperability can occur.
It’s more than a decade since blockchain was first introduced to the world but limited use cases of the technology mean it is still in the formative stages.
Yet, every so often, we experience a seismic shift. This year we have seen the Covid-19 pandemic influence behaviour across industry and this too could potential accelerate future blockchain use cases. Because as more and more of the world becomes connected digitally rather than physically, blockchain will be a core enabler of our new reality.
