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Blockchain Tech and Customer Loyalty

Customer loyalty is one of the cornerstones for every successful business, which is why it is no surprise that many businesses offer club memberships, frequent customer rewards and many other loyalty program incentives to their customers. However, the massive multitude of clubs and programs can be frustrating for customers to navigate, as they try to maneuver between the numerous club cards in their wallets and online, often finding it difficult to keep track of their point status and where they can be redeemed.

While cryptocurrencies made a splash in recent years, making headlines and causing general public interest, it is the underlying blockchain tech that is proving to be the real game-changer. The ability to transfer and verify information on a decentralized network opens up many possibilities across multiple industries and could become the new standard in many ways – including customer loyalty.

Using blockchain tech for loyalty programs is already showing great promise as several of the world’s biggest brands have already converted some or all of their programs using the technology. The ability to manage a large customer base while maintaining perfect tracking of each client’s token count, without the need for a central governing entity, is a major step up in this industry, which sees $360 billion in points go unredeemed each year. From airlines to small restaurants, it seems that any business can harness the new technology to benefit customers as well as themselves.

 

Major Brands Are Making the Move to Blockchain

On top of the decentralization and easy tracking, another main advantage of blockchain is the ability to exchange and redeem tokens of values, such as frequent flyer miles or phone minutes. While this ability is widely in use on cryptocurrency platforms such as Ripple and Stellar, it is also being used in other industries.

One such example is Singapore Airlines. Considered the best airline in the world, Singapore is also a pioneer in using blockchain for its business, introducing a loyalty program built on the technology. The advantages of Singapore Airlines’ loyalty program are twofold: Using blockchain to track each customer’s account status to accurately reward them with miles, and enabling clients to redeem them with other service providers that are partnered with the airline. Launched last July, if the loyalty program takes off, it could become the yardstick by which all other airline clubs are measured.

Naturally, blockchain-based loyalty programs are not limited to airlines. Car rental giant E-Z Rent-A-Car has also created a similar program, which includes features such as payment with cryptocurrencies and even redeeming points for crypto assets within the company’s app. Japanese technology giant Rakuten, HP, and many other companies are also in the process of creating blockchain loyalty programs.

 

Bringing Blockchain Technology to SMBs

But what about the little guy? Many small and medium businesses (SMBs) don’t have the resources to develop their own blockchain networks, but would still benefit from the advantages it has to offer. For that reason, several companies have begun offering services which take care of the infrastructure and enable these businesses to build blockchain-based loyalty programs of their own.

 

The Building Blocks of Brand Loyalty

As blockchain solutions become more widespread, it is safe to assume that a growing number of brands will implement blockchain into their loyalty programs. Larger brands will most-likely build their own blockchain, or use the services of companies such as IBM, which is already offering an API for creating loyalty programs.

As a growing number of businesses are looking into blockchain tech, it seems that these solutions could prove to be the holy grail of customer loyalty.

Featured Image: DepositPhotos/ sdecoret

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Bitcoin and Blockchain | Banks Must Embrace or “Bite the Dust”

With all the constant news about the price of Bitcoin, it’s possible to forget what it was invented for. Cryptocurrency trading plays only a small role in what Bitcoin and blockchain technology can do for our world. Most importantly, they can end the hegemony central banks have on the way we make payments to each other.

Today, there are supposedly thousands of cryptocurrencies available. Many of which seeks to fix the issues central banks have created. However, they don’t all have the same goals. While some may wish to obliterate our current banking system, others simply want to improve it. Banks must find a way to work with these co-operative cryptocurrencies or they will likely face extinction.

The Current Banking System is Too Complicated

In 2015 a global financial literacy test found that 57% of adult Americans are financially illiterate. It’s not surprising then that most people don’t know how complicated it is to transfer money between banks. It’s painstakingly complicated, it’s the reason why payments can take so long – days or even weeks in some circumstances.

When money doesn’t leave a bank, transfers are easy. For example, if two people use the same bank and transfer funds between themselves it’s very straightforward. The bank simply debits the payer funds and credits the receiver.

But when we need to pay someone who uses a different bank this becomes an issue. You would assume that it would work the same way, but unfortunately not. Instead, each bank must have an account with each other to give and receive funds.

To pay someone who belongs to another bank, the funds must first be given to the bank. The bank then takes that money and puts it in their own account in the other bank. Once that money is there, it is transferred to the receiver. This means funds can sometimes be swapped between different hands numerous times before they reach their destination. This entire process becomes even longer when there are large quantities of funds involved.

Blockchain technology can simplify this process, making transactions more direct. Additionally, this also makes transactions cheaper as well.

Blockchain Technology is Ripe for the Globalized World

The old method that is currently in place does not fit in with the world we now live in. Companies are increasingly multinational with offices in many different countries. The process above becomes even more complex when it includes foreign banks. These banks may not have accounts with each other, which might mean a third country may need to be involved.

This is an irrelevant issue for blockchain technology which overcomes this issue. With Bitcoin, overseas transactions can take place at the same speed as domestic transactions.

Funds will be safer

Blockchain technology has also been highlighted as a safer alternative to transferring funds as well.

Decentralized vs. Centralized

One of the key selling points blockchain is that it is decentralized. Centralized networks, such as banks, put themselves at risk because they are easier to hack. Once inside a centralized network, a hacker has access to everything. It only takes one weakness to be manipulated.

By being decentralized, all information is shared amongst everyone all the time. This means that no one is in control of the network. For a hacker to manipulate the information on the network, they would need to control at least 51% of it. This is no easy feat and would require an extremely powerful computer.

Restoring Trust with Transparency

Trust is a major issue for many banks, especially after the 2008 crash. In 2017, a YouGov survey uncovered a number of interesting insights into global trust in banks. While 74% of Americans trust banks, only 37% of Europeans do.

Blockchain technology is also able to restore people’s trust in banks. Most blockchain’s use what is called a distributed ledger. This ledger is used to record every single transaction that takes place and can be viewed by anyone.

With such a powerful tool, banks can be properly regulated. This not only reduces illegal activity, such as money laundering. It also shows clients how their money is being used and transferred.

Cryptocurrencies Working with Banks

Some cryptocurrencies have been designed specifically to work with banks. One of the largest already doing this is Ripple, which is also considered the third largest cryptocurrency. Ripple works by acting as an exchange for money transfer. By doing this, transactions are more direct, much faster and cheaper as well.

Bitcoin’s Position

Bitcoin was designed as an alternative to fiat money. In an ideal world, users would not need to have banks or bank accounts, they would only need bitcoin. This, of course, puts it at odds with the banking world.

Despite the above, it is still possible Bitcoin can integrate with it. Some banks are already doing it and it could ensure their survival. Though, for wide-scale adoption to happen, it is likely Bitcoin will need to be a lot more stable.

Until that point is reached, Bitcoin is prime to be traded. Traders can utilize BitMex signals and Deribit Signals to make the most of it.

Conclusion

Blockchain technology benefits many industries for the better, most of the time making them more efficient. Banking is another industry that urgently needs to be simplified and blockchain looks like the perfect way to do that.

There are several benefits to adopting blockchain technology: banks can simplify transactions between themselves, making the process quicker and cheaper; banking institutions will be impenetrable to hackers, ensuring their client’s funds are safe; banks will be able to increase trust in their clients by utilizing a distributed ledger.

The banking sector will find it tough to accept the changes and some may fight them. This may even result in some banks closing and some new ones opening. It should be considered that different countries may adopt blockchain at a slower rate and may use a different blockchain. But the result will be the same, banks must embrace change or “bite the dust”.

Feaetured Image: depositphotos/ nils.ackermanm.gmail.com

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Cryptocurrency White Papers | How Important Are They?

Anyone looking to invest in bitcoin or any other form of cryptocurrency has surely spent some time researching and reading about it. Entering the crypto world without any knowledge would be a crazy and reckless thing to do, especially if you are planning to invest money into it. While blogs, forums, and the many available cryptocurrency websites put no limit to the amount of information available for anyone looking for help, there is no denying that the best way to understand a cryptocurrency would be to read its white paper. A white paper is like a blueprint to a building, the syllabus to a class or, more literally, the proposal to a project.

Cryptocurrencies are generally just online digital projects which are carried out through blockchain technology. A white paper provides a written document for business people, investors, and even developers to help them understand what the project is about. For anyone planning to get into the crypto world, understanding a white paper is not just an advantage but should be considered an essential skill.

Getting into it, here are a few things you should know about:

  1. There are No Official Rules or Standards for White Papers

White papers have no set format but a majority of them contain an Abstract and Introduction, Discussion on Technology, Emission Plan, Incentives, and finally, a Conclusion. Basically, these parts aim to inform people on what the main purpose of the new blockchain is, how it would work, how people would be able to benefit from it, and the general processes involved in its development.

The things that you do need to look for when reading a white paper, are these things:

The main vision or goal of the new project should be a concern. Why should this be created? What purpose does it serve? What will it do? These are the questions that you should ask and that should be answered. It is highly likely that new cryptocurrencies that aim to serve a purpose or fill a niche that has already been filled by an existing currency would not be able to succeed in the market.

Although not everyone may be able to fully comprehend the technicalities and processes that serve as the basis for blockchains, having a general understanding of how it works would definitely be better than not knowing anything about it at all. Oftentimes, processes may involve a lot of technical jargon but their definitions can easily be looked up online. Equipping yourself with the knowledge of how a cryptocurrency works will help you to assess whether it would have an actual role and be able to fulfill its role or whether it’s another online scam.    

Quite similar to finding a crypto’s purpose, knowing whether its purpose would actually be applicable to today’s society would also ascertain whether a currency will become successful. More simply, you need to ask why we need this new cryptocurrency? What niche does it fill? An invention may be entirely new but it may not always fit into the community.    

Finally, does this project have to use blockchain? There is a need to identify whether the purpose is truly attainable through blockchain technology or whether this can be done through other methods. If other methods can be applied, then you can go and ask why should we use blockchain instead? More specifically, what is the benefits of blockchain use to this particular project?

         

      2. You do not need to have a degree in computer science to understand them

As said earlier, many white papers may contain technical jargon and some terms that are not easily understood. However, with a bit of research, more reading and experience, a better comprehension is easily developed over time. The complexity that a white paper presents its cryptocurrency is not an indication of its legitimacy and it is definitely not a sign that it would become successful in the market. There are many which are very well presented and contain several technical terms that only serve to confuse readers, impress people and scam them out of their investments. The Bitcoin was presented in a very simple and short white paper by Satoshi Nakamoto and is the number one cryptocurrency today.

  

      3. White papers will not assure you whether it is a legitimate new cryptocurrency    

There is no official body to review and check the plans presented in a white paper. It is entirely up to the investors and developers to decide whether a new cryptocurrency would become successful or would end up as a bad investment. That is why it is important to develop the necessary skill of learning to understand what a cryptocurrency is about, how it works, and what it plans to do in order to protect yourself from being scammed. This guide provides no sure proof method of keeping your investments safe but only aims to help inform and enlighten people on the main purpose of crypto white papers.

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Token Sales Drop 90 Percent

With a bear market and a change in sentiment around ICOs, the risk of using such a fundraising mechanism now constitutes a cheaper, more reliable way of hosting a crowdsale. A staggering collapse this year in ICO funding – from $2.5 billion in February to $181 million by September – means that it has become vital for startups to actively reduce their risk and costs.

This means trimming the fat where possible. An equitable way of achieving this is through one of the emerging ICO platforms wherein a token sale can be launched inexpensively in a matter of days.

While still a valuable way to raise funds, and potentially a lot if the project gains traction, it no longer reliably attracts the level of funding needed to justify a bespoke platform built from scratch. Essentially, startups can no longer throw money at contractors to build their ICO platform; they must explore cheaper options to help balance the books.

Moving Forward with Changing Times

The dizzy heights of what in retrospect looks like a crypto bubble, with Bitcoin grabbing international headlines for stopping just short of $20,000, appear to have gone. No commentator can say with complete confidence where the ceiling is, but this much is clear: speculation and fervor in cryptocurrency markets have seen a dramatic slowdown in recent times.

Startups need to be asking retail investors for their pocket change and not promising get-rich-quick schemes with x1000 growth, which Ethereum co-founder Vitalik Buterin aptly suggests is now highly unlikely at best.

“The next step will be getting people who are already interested in cryptocurrencies to be involved in a more in-depth way,” Buterin said. “Go from just people being interested to real applications of real economic activity.”

Token Sale Solutions to Help Ground your Project

Removing overinvestment into ICO launches is the smart money move right now. Larger projects who enjoy extensive media coverage and wider publicity may be the exception, but no smaller startup should be hedging their bets on developing a crowdsale platform in these conditions.

In fact, many companies have already moved to use token sale solutions. There are a host of options already on the market, so here are just a couple.

LexICO, an offshoot to LEXIT (LXT) – an online marketplace for the buying and selling of assets, intellectual property, and whole or parts of companies – is a full solution for launching ICOs, airdrop and bounty campaigns. It offers significant discounts for those who pay using the native platform token and aims to help startups customize their token sale and organize all KYC requirements.

An alternative solution exists in Das33 that aims to create a strongly structured process for ICOs whereby the platform retains control. It has a few interesting features; for example, when participants pledge funds to a project they receive a ‘premium token’ in exchange which yields rewards after targets are met.

Das33 certainly try to address recent bearish sentiment around ICOs by emphasizing the level of oversight it will have on applying projects. However, crypto-heads can tend towards skepticism over one entity holding all of the keys which could affect how many users are attracted to the platform.

The summer of 2018 will be remembered for failing to provide many startups with funding from token sales. Markets change, and few faster than in crypto, so as we enter into the next phase it is vital that fundraising tactics are adapted to current conditions. This strategy will begin with companies learning to launch more efficient ICOs.

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The International Remittance Market | Will Blockchain Take it Over?

Data shows that the international remittance market is huge. In 2016, migrants living in different parts of the world transferred more than $570 billion USD to their home countries. Even though several FinTech overseas money transfer companies have made their presence felt in recent times, the field is still dominated by three of the original players – MoneyGram, Western Union, and Ria. Between them, they account for around 25 percent of the total market share.

What Has FinTech Done?

Unlike the scenario a couple of decades ago, individuals no longer have to rely on banks or a limited number of high street forex brokers to send money overseas. This is because of the arrival of a number of FinTech companies such as OFX, TorFX, HiFX, Currencies Direct, WorldRemit, and TransferWise. Their growth is apparent too. For instance, TransferWise became the first FinTech unicorn – valued at over $1 billion USD – from this realm to achieve profitability. It achieved this within five years of beginning operations.

So far, FinTech companies have multiple factors working in their favor. While they have managed to reduce the cost of cross-border fund transfers, they have made the process quicker too. In addition, some of the FinTech companies give their customers different transfer and payment methods from which to choose.

What Has Blockchain Done?

Blockchain technology appears to be making slow but steady inroads into the international remittance market. In early 2018, MoneyGram became the first overseas money transfer company to announce the use of Ripple’s blockchain technology on a trial basis. Western Union followed suit soon after.

In mid-20188, Singapore-based InstaReM teamed up with Brazil-based BeeTech with the aim of making fund transfers between South America and Asia-Pacific faster and more affordable. This collaboration was made possible after both companies adopted the use the Ripple’s blockchain technology.

Banks from different parts of the world are waking up to what blockchain has to offer as well. Examples include French bank Crédit Agricol, India’s IndusInd Bank, and Itau Unibanco Holding SA from Brazil.

What Benefits Does Blockchain Have to Offer?

Although still in its nascent stages, blockchain holds the potential to change the way people send and receive money to and from foreign countries.

  • Reducing costs. World Bank’s data suggests that the average cost of sending money overseas stands at more than 7%. In addition, while the cost of using a bank averages at around 11%, using an online money transfer company costs an average of 5.3%. While the latter still depend on the former to function as intermediaries, blockchain-based transfers can do away with using banks completely. This, in effect, can help make cross-border transfers more cost effective.
  • Enhanced security. The centralized manner in which banks and most overseas money transfer companies function makes them vulnerable to different types of online threats. Blockchain, on the other hand, is completely decentralized in nature, which makes is rather hard to penetrate. Besides, unique entries corresponding to all transactions are marked in a digital ledger, and remain impossible to fudge.
  • Quicker turnaround times. Most banks still take days to process international money transfers. Their FinTech counterparts may take one to four or more business days, depending on where you and the recipient live. Cryptocurrency transfers do not rely on geographical boundaries and can go through almost immediately.
  • Wider reach. Inadequate access to conventional forms of banking remains a problem in several parts of Asia, Africa, and South America. This has an adverse effect on how people from these regions may send or receive international payments. However, mobile phone usage in these areas is fairly high. With an online blockchain-based cryptocurrency wallet, sending or receiving money can become fairly simple.

Is There Any Possible Downside?

Being exposed to currency conversion twice is a disadvantage that currently exists with cryptocurrency-based international transfers. For example, consider sending money from the U.S. to Canada. You will first need to purchase a cryptocurrency using U.S. dollars. The recipient will then need to sell the cryptocurrency to buy Canadian dollars.

Which Companies Offer Crypto-Based International Transfers?

While most of the older well-established players appear to be biding their time to see where blockchain technology goes, some startups have taken the bull by the horn. Some of the companies that rely on blockchain technology to carry out cross-border fund transfers include:

  • Ripple
  • Circle
  • Abra
  • MOIN
  • Coins.ph
  • BitPesa

Conclusion

With blockchain making its presence felt in various fields, from banking, to ecommerce, to even elections, it looks like it is all set to revolutionize the way people carry out overseas money transfers. Its growth, though, appears to depend on how quickly people start using cryptocurrencies in their everyday lives.

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