Relevance: GS-3: Science and technology- developments and their applications and effects in everyday life; Achievements in science & technology; indigenization of technology and developing new technology.

Key Phrases: Agistri (a Greek island), Nautiluscoin/Drachmae, UK-based TamTam Travels, ‘Chain of Points’, ‘Buuyers’, a Paris-based start-up, Coincheck.

Why in News?

• Recently, in the midst of the Covid-19 crisis, and massive defiance towards the traditional banking sector, Agistri, a Greek island, tested blockchain-based Nautiluscoin /Drachmae money solution, in order to kick-start the local tourism industry.
• This resulted in overwhelming growth and local demand from the tourism sector that attracted the global attention.
• High Growth and Elasticity of Tourism sector in Post Covid-19 era:
  1. The key feature of the travel and tourism sector, which differentiates it from other sectors, is its growth and employment potential, with lower capital investment.
  2. As India is a tourist destination, if blockchain technology is adopted, it could do wonders in this sector, as it is fast, efficient, and verifiable, cannot be erased over time and is secure.

How can the tourism sector benefit with Blockchain technology in multiple ways?

1. Blockchain based smart contract :
   • A key development in the blockchain technology is the smart contract which is written as codes containing trigger points, enabling the contract to self-execute once the coded conditions are met, such as expiry dates or meeting of target price. It also allows the regulator to monitor the activity in this contract.
   • Blockchain based travel portals is another example on smart contracts.
   • A blockchain smart contract could send an acknowledgment or token access mechanism to the physical asset or user e-wallet, such as a one-use QR code to open a rental car or hotel room.
   • UK-based TamTam Travels proposed a business model based on a membership portal, which offers discounts on benefits and services. This applies to international and domestic travels with potential savings reaching several thousand dollars.
2. Blockchain technologies to improve trustworthiness between customers and local sellers:
   • Blockchain technologies could be used for improving customer loyalty and reward programs.
   • ‘Chain of Points’, a blockchain based token, provides a simple and flexible solution to merchants and customers in the loyalty rewards space.
   • It incorporates cryptocurrency functions programmed to act as a technical backbone for the loyalty and gift card industries.
   • Liquidity and ability to trade ‘points’ provides an unprecedented solution to merchants and customers implementing loyalty rewards programs.
3. Blockchain can strengthen virtuous 'feedback-improvements' loop :
   • Customer reviews is another area of application of blockchain which include inter-alia notorious travel sites aggregate reviews, ratings, photos, contact information, and opinions about tourism service providers.
   • In a world wherein information circulates instantaneously, these online user-generated reviews are dramatically reshaping the tourism industry by making some businesses and breaking others.
   • ‘Buuyers’, a Paris-based start-up that sets out to offer a customer review management tool based on blockchain technology, increased both transparency and credibility in the opaque world of tourism customer reviews.
4. Blockchain-based donation for heritage conservation:
   • It is very vibrantly explored in Japan, South Korea and Canada
   • Coincheck, a company, has launched a Bitcoin donation platform from which heritage conservation projects in Japan greatly benefited.
   • Donors could send funds to their preferred organisations simply by using a QR code.
   • It avoided the transaction fees associated with international bank transfers as every donation becomes traceable and transparent, thereby acting as an incentive for donors who are usually reluctant to donate to opaque projects.
   • Another benefit is that donors do not need to provide a name or an email address when they make a donation.
5. Blockchain enhances the phenomenon of 'Business disintermediation' :
   • Business model disintermediation, peer-to-peer economy is another major application. The introduction of blockchain technology paves the way for new disintermediated business models.
   • Tourism sectors got trapped by licensing schemes and regulatory cholesterol, subject to the rigid bureaucratic structures and influence of vested interests of the cronies.
   • Blockchain technology, thus, allows the disintermediation and decentralisation of all transactions of any type between all parties on a global basis.
6. Blockchain a blessing for startups:
   • It is worthwhile praising that Blockchain-based crowdfunding platforms make it possible for start-ups to raise funds by creating their own digital currencies.
   • Investors in a crowdfunding campaign receive tokens that represent shares of the start-up they support.
7. Blockchain based transparent transactions:
   • Another major area is the processing of online payments for hotel bookings.
   • Microsoft and Webjet have designed a blockchain proof-of-concept travel booking solution, which greatly facilitates booking data processing.
   • The blockchain solution also rests on a smart contract platform that mitigates the consequences of data mismatch, and minimizes transaction costs.
   • It also helps remove the risk of data inaccuracies, streamline payment processes, boost data security, and resolve pain points in the payment process, thanks to their innovative blockchain travel solution.
8. Supply chain management is another area of Blockchain application:
   • Blockchain enables the tracking of items through complex supply chains.
   • Companies have developed new platforms, to track consumer goods in the global supply chain, their origin and flows, so as to detect counterfeiting or mishandling.
   • Likewise, the tourist searching for authenticity, in order to improve her experience, is vigilant as regards the food she eats, and therefore the food supply chain.
   • For instance, a Swiss start-up “Food Blockchain” sets out to “manage commercial relationships among different actors in the supply chain through the introduction of its own token, “Foodcoin”.
9. Blockchain technology is seen as paramount in medical tourism:
   • It creates a safer and better care environment for patients by keeping the health information tamper proof.
   • For instance, If a person is travelling outside their home country, and treated for an emergency, access to a blockchain ledger could help detect a competent expert, who would have access to the healthcare data remotely in case of a very rare condition.
   • Patients could store encrypted vital information on a blockchain ledger (IoT medical devices should be considered here), and instruct who has access to the private key, and ultimately to the patient’s medical information.
   • Patients could store medical procedures, and more advanced directives, such as not-to-resuscitate orders.
   • This would amount to the self-management of healthcare conditions by patients themselves, who would nonetheless continue to receive the guidance of healthcare clinicians.

Conclusion:

• The need of the hour is to promote start-ups on blockchain based travel portals, customer reviews, business model disintermediation, supply chain management etc.
• Government should provide necessary institutional and financial support, and incubate prospective startups in the tourism sector based on blockchain technologies.
• A national level guidelines and policy-making for academia and industry can be a further good start in this direction.

Source: The Hindu BL

Mains Question:

Q. Blockchain Technology has become necessary to realize the potential of Digital India and Secure India. In this context, evaluate how the recently launched 'National Strategy on Blockchain' could increase the proliferation of Blockchain Technology in the diverse sectors of the economy. ( 15 marks)