Blockchain is one of the most talked about technologies today, and it’s got the potential to disrupt numerous industries – including telecommunications and broadband. While blockchain is still a young and emerging technology, it’s important to understand the potential applications and opportunities for service providers.
In essence, blockchain is a digital ledger where information is continually updated and reconciled in a database, which is public, verifiable, and stored in multiple locations. A block is a record of a new transaction. When the transaction/block is completed, it’s added to the chain. Digital currencies (like Bitcoin and Ethereum) are built on top of blockchain. A bitcoin owner has their own key to an address on the chain that records their ownership.
One important thing to know about blockchain and the crypto currencies built on top is that there is no middle man. There’s a single digital ledger of transactions that both parties have access to. This simplifies coordination and validation of transactions – for example, you don’t need banks in the middle to verify the transfer of money.
So where’s the potential of blockchain for service providers? Industry experts are looking at several key opportunities:
- Fraud management: According to Heavy Reading senior analyst James Crawshaw, fraud can represent up to 4% of an operator’s total revenue. Blockchain can offer an efficient and robust method for authenticating users – for example, authenticating people who roam onto a carrier’s network. A blockchain could be implemented between operators with a roaming agreement. A blockchain-based system can enable charging in near real-time, as well as eliminate third-party clearing houses.
- Identity-as-a-service: Service providers are well positioned to offer identity-as-a-service, since they already have an identity-based relationship with their subscribers via SIM cards. When a subscriber opens an account with a service provider, they can create a digital identity that can be used on any number of partner sites.
- Inter-carrier settlement: Blockchain’s digital and distributed ledger can streamline settlement between carriers…for example, how many minutes of voice traffic was carried by Provider A? Generally speaking, blockchain reduces the role of intermediaries, even eliminating them entirely.
Those are just a few examples where blockchain can disrupt current processes in the telecom industry. As a key takeaway, blockchain is all about trust and can make partnerships and transactions smoother and more efficient. That carries the potential to both reduce costs and generate new streams of revenue for service providers.