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It’s been close to a decade since blockchain technology surfaced, offering the tech community new possibilities and multiple uses. In our innovation lab, we’ve been exploring blockchain technology over the last few years; testing use cases with partners and clients, and continuing to examine whether the technology is helpful for customer engagement and loyalty purposes, or if it’s just hype?
I recently had the distinct pleasure of attending Loyalty Live in Chicago, organized by the Untraceable Event team. The two-day conference brought together experts to debate and discuss potential applications for blockchain technology and loyalty. While I may not have agreed with all the opinions expressed, having a forum for the discussion was extremely fruitful.
Although the technology has been around for 10 years, the question remains: “What is blockchain technology?” Introduced in 2008, blockchain focused on a peer-to-peer version of sending currency electronically without going through a financial institution; this technology enabled the launch of Bitcoin and evolved to enable the launch of other cryptocurrencies like Ether.
Today, there are two forms of blockchains—the first being a Public Blockchain, which is what bitcoin is run on and which is reliant on a network of users. All data is published to the blockchain and is immutable (can’t be changed) once recorded. When someone wants to make a transaction or transfer funds to someone else, miners on the blockchain will validate the transaction, and once validated, it gets added to the blockchain.
The second type of blockchain is the Private Blockchain, where the technology is used in a closed environment for enterprise purposes. The blockchain properties remain, but the focus is very much on business application. If you’re interested in learning more about blockchain, I recommend the following resources:
Loyalty Live focused on bridging the gap between the world of loyalty rewards with the world of blockchain technology. The conference surfaced key loyalty and technology concepts around enterprise, big data, payments, and loyalty rewards. However, there were five important takeaways to note:
Glossary of Terms:
Immutable: Unchanging over time or unable to be changed.
Fungible: Able to replace or be replaced by another identical item; mutually interchangeable. Something fungible can be exchanged for something else of the same kind.
Miners: Superusers on public blockchains with powerful computers. Miners validate new transactions and record them on the global ledger (typically on public blockchains). On average, a block (the structure containing transactions) is mined every 10 minutes. Miners compete to solve a difficult mathematical problem based on a cryptographic hash algorithm. The solution found is called the Proof-Of-Work. Miners can also receive rewards in the form of transaction fees.
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